The Issue The issues to be considered in the course of this Recommended Order concern the question of whether Baxter's Asphalt & Concrete, Inc. or White Construction Company, Inc. should be accepted as a successful bidder on State Project No. 53050-3514, Jackson County, Florida, as advertised by the State of Florida, Department of Transportation.
Findings Of Fact The State of Florida, Department of Transportation, (DOT), advertised for bids on State Project No. 53050-3514, Jackson County, Florida. This was a project in which DOT had determined that 10 percent of the funding within the State Department of Transportation Trust Fund, as allotted for the project, would be devoted to economically disadvantaged individuals, also referred to as Disadvantaged Business Enterprises (DBE). This decision was in keeping with Section 339.081, Florida Statutes. Consequently, interested bidders were called upon to submit bids reflecting a DBE participation of a minimum of 10 percent of the bid submitted. Baxter's Asphalt & Concrete, Inc. (Baxter) and White Construction Company, Inc. (White) responded to the bid opportunity. The bids were opened on July 25, 1984, and Baxter's bid was the apparent low bid. The bid amount was $882,641.25. White was the second low bidder offering a bid of $928,353. Both bids were within the DOT estimate of construction costs. When the bids were reviewed, Baxter's bid was rejected by DOT based upon the belief that the bid failed to meet the DBE 10 percent requirement or to offer explanation of good faith attempts by Baxter to comply with the DBE contract requirement amount. See Section 14-78.03(2)(b)4., Florida Administrative Code. No other claim of error was made by DOT on the subject of the acceptability of the Baxter bid. The White bid is conforming. In preparing the bid, bidders are required to use DBE Utilization Form No. 1 to reflect the amount of DBE participation as a percentage of the overall bid estimate. In submitting its form as part of its bid blank, Baxter indicated that the total project cost was $884,000, and indicated that Ozark Striping, a DBE subcontractor, would be given $20,000 of that work or 3 percent, and that Glenn Powell, DBE subcontractor, would be afforded 7 percent of the total contract in the amount of $55,000. The total percentage according to Baxter is 10 percent, thus meeting the required DBE participation. This form is found as part of the joint Exhibit No. 1 offered by the parties. In fact, the Ozark Striping participation was 2.26 percent, and the Glenn Powell participation was 6.22 percent, for a total of 8.48 percent of the estimate reflected in the Form No. 1. Contrasted against the actual estimate of $882,641.25, these projections constitute 8.49 percent of that estimate. Thus, they are less than the 10 percent required. Given the fact that this DBE projection is less than the 10 percent, and in the absence of any attempt to offer a good faith explanation why Baxter failed to comply with the requirement, the bid was rejected for this irregularity. The Contract Awards Committee of DOT, when confronted with the irregularity of the Baxter bid, then determined to recommend the rejection of all bids. This was in keeping with the fact that the difference between the unsuccessful apparent low bid, with irregularities, and the second low bid exceeded 1 percent of the contract amount. At the time of this decision to reject all bids, DOT felt that the difference would justify re-advertising the bids. That policy position had been abandoned at the point of final hearing in this cause, wherein DOT expressed the opinion that it would be better served to accept the bid of White, and not re-advertise, again for cost reasons. In the face of the initial action to reject all bids and in accordance with Section 120.53, Florida Statutes, Baxter and White appealed that decision and by that appeal requested recognition as a successful bidder. This led to the present Section 120.57(1), Florida Statutes hearing. Baxter has never attempted to offer a good faith explanation of its non-compliance. It chooses to proceed on the theory that the mistake in computation can be rectified by allowing Baxter to submit a supplemental Form No. 1, bringing its total above the DBE requirement. In its contention, Baxter indicates that Glenn Powell could have provided $126,000 of the DBE goal, which is in excess of the 10 percent requirement. Baxter also alludes to the fact that it had contacted other DBE enterprises, such as Oglesby and Hogg, Michael Grassing, and J.E. Hill. All told, Baxter indicates that if given the opportunity, it would allow $146,000 of DBE participation to include $126,000 by Glenn Powell, and $20,000 by Ozark. This comment is suspect, given the lack of compliance in the initial bid response, and the realization that within that bid response on the item related to Glenn Powell, the original amount of work attributed to Glenn Powell was $100,000, and was struck through in favor of the $55,000, leaving a fair inference that Baxter was attempting to meet the DBE goal with a projection as close to the 10 percent as could be achieved. They fell short because in adding the $20,000 for Ozark, and the $55,000 for Glenn Powell, the addition in the Form No. 1 showed $85,000, which is more than 10 percent of the $884,000 shown on the form, when in fact the two amounts were $75,000, and less than the 10 percent required. Baxter characterizes its mistake in computation as a technical error, which can be remedied without harm to the bid process. The Baxter position must be examined in the context of action by DOT relating to compliance with DBE requirements. Prior to June 1984, a time before the subject July 25, 1984 bid opening, bidders had been allowed to amend the Form No. 1 to show compliance with the DBE requirements or demonstrate good faith efforts of compliance. That amendment as to compliance through listing of the DBE subcontractors or submission of good faith effort documentation had to be offered within 10 days per former Section 14-78.03, Florida Administrative Code. Beginning with the June 1984 bid-lettings, all documentation had to be submitted with the bid, reflecting compliance or describing good faith efforts at compliance per Section 14-78.03(2)(b), Florida Administrative Code, effective May 1984. This change was brought about to prevent the apparent low bidder, as indicated at the point of bid-letting, from shopping the quotations by the DBE's found in its original quote against other quotes from DBE's not listed in the bid documents initially submitted, and by amendment to the DBE statement prejudicing the former DBE group. The change was also made to avoid the possibility that the apparent low bidder could evade his bid by rendering it non-conforming, in the sense of refusing to submit the required documentation of compliance with DBE requirements or to the offer of a good faith explanation of non-compliance after the bid-letting. The change of May 1984, removed the possibility of bid shopping and bid avoidance. Both versions of Section 14-78.03, Florida Administrative Code, pre and post May 1984, indicate that failure to satisfy the DBE requirements or offer a showing of a good faith attempt at compliance, would result in the contractor's bid being deemed non-responsive, and cause its rejection. Baxter has been able to comply with the DBE goals of DOT in its bidding prior to the present controversy.
Findings Of Fact DOT issued a request for proposals (RFP) entitled Business Area Analysis in the Functional Area of Production Management, with proposals due on November 15, 1991. Eight proposals were timely filed. The RFP contains criteria for evaluating the proposals, including factors to be considered and available points to be awarded. Evaluation of the proposals was broken down into two parts, a technical review and a price review. The technical part was further broken down into evaluation of the Management Plan, worth up to 30 points, and of the Technical Plan, also worth 30 points. The price or cost review was worth 40 points. The technical review was also broken down into sub-parts based on the criteria contained in the RFP. The technical portion of the proposals was performed by a five-member committee, comprised of William Conner, James Dolson, Jr., Rebecca Clemens, Mavis Georgalis, and Paul Benner. All eight proposals were accepted by DOT as responsive and were furnished to each committee member for independent review and evaluation as required by the RFP. Following the independent evaluations, the committee met and discussed the proposals. While there was no requirement to do so, some committee members changed scores based on considerations raised in this discussion. However the changes were minor and did not alter the final result of the committee's ranking and award of points to the various proposals. The committee ranked the Price Waterhouse proposal highest on the technical portion, giving it a total of 48.2 points out of a possible 60. It ranked Jorgensen second, giving it a total of 43.8 points out of that possible 60. The cost or price portion of the proposals was reviewed separately by Charles Johnson of the Contractual Services Office of DOT. Jorgensen was the lowest bidder and received the maximum available points of 40. Price bid the third highest price and received 29.50 points. When the points from the separate evaluations were totaled, Jorgensen received a total of 83.6 points and Price received a total of 77.7. Jorgensen was first and Price was second. On November 22, 1991, DOT posted the bid tabulations and indicated its intent to award the contract to Jorgensen. Price timely filed its initial protest and its formal protest. Read as a whole, the RFP requires that the proposed team members from each bidder have qualifications and substantial experience in the functional area of production management and also in the development of information systems. There is no requirement that all proposed team members have experience in both areas. A team which contains different members with expertise in each of the required areas is sufficient to be responsive to the RFP. The committee used solely the criteria in the RFP to evaluate the proposals. Petitioner singles out various sentences from the RFP to support its argument that each member of the team must have significant experience in development of business information systems, however in doing so it overlooks other requirements and it fails to read the RFP as a whole. Hence, all of Petitioner's proposed facts relating to this argument are rejected as irrelevant. Price also argues that the fact that Jorgensen's proposed team does not have a full-time member makes Jorgensen's proposal unresponsive, unworkable, and fatally flawed. This argument is also rejected along with those facts alleged in support of the argument. The RFP nowhere requires that one or more members of the proposed team be full-time. While the committee had some concerns about the lack of a full-time member on Jorgensen's proposed team, the points awarded reflect the extent of that concern. At no time did the committee intend that the points awarded on the proposals be contingent on Jorgensen changing its staffing pattern to include a full-time person. It was assumed by the committee, DOT, and both Price and Jorgensen that the actual staffing would be subject to adjustment after the contract was awarded and during the performance of the contract to reflect needs as they arose. Any negotiation of staffing patterns would occur after the bid award and the bid award would not be contingent on such negotiations. At no time prior to the posting of the bid tabulations and intent to award to Jorgensen did anyone from DOT contact Jorgensen to solicit a change in its proposed personnel allocation. Hence no unfair advantage was afforded to Jorgensen over Price.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Transportation enter a Final Order awarding the contract in RFP-DOT-91/92-9005 to Roy Jorgensen and Associates, Inc., and denying the protest filed by Price Waterhouse. DONE and ENTERED this 27th day of January, 1992, in Tallahassee, Florida. DIANE K. KIESLING 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 27th day of January, 1992. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 91-7998BID The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Price Waterhouse Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(1), 3(11), 4(8), and 13(13). Proposed findings of fact 2, 5-8, 11, 12, 14-18, 56, 57, and 59 are subordinate to the facts actually found in this Recommended Order. Proposed findings of fact 9, 10, 28-31, and 37-55 are unsupported by the competent and substantial evidence. For most of these proposals, the only record support is found in isolated words and statements which have been taken out of context or distorted. The greater weight of the credible evidence does not support these proposals. Proposed findings of fact 19-27, 32-36, and 58 are irrelevant. See Findings of Fact 16 and 17. Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of Transportation 1. Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1-3(1-3), 4(3), 5(4), 4(5&6), 5(6), 6&7(8), 8-12(9-13), 13(15), 14&15(14), 16(18), and 17(21). [Note: there are two paragraphs 4 and 5.] COPIES FURNISHED: Ben G. Watts, Secretary Department of Transportation 605 Suwannee Street Tallahassee, FL 32399-0458 Susan P. Stephens Assistant General Counsel Department of Transportation 605 Suwannee Street, MS-58 Tallahassee, FL 32399-0458 Steven W. Huss Attorney at Law 1017-C Thomasville Road Tallahassee, FL 32303 William C. Grenke Vice President Roy Jorgensen & Associates, Inc. 3735 Buckeystown Pike Buckeystown, MD 21717
The Issue Whether Petitioner is eligible for certification as a "minority business enterprise" in the area of landscape contracting?
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: Petitioner is a Florida corporation that was formed and incorporated by Margaret Gordon, who is the corporation's sole shareholder and its lone officer and director. Gordon is an American woman. Before forming Petitioner, Gordon held various jobs. Among her former employers are Florida Maintenance Contractors and Scenico, Inc. She worked for the former from 1984 to 1991, and for the latter from 1984 to 1990. As an employee of Florida Maintenance Contractors and Scenico, Inc., Gordon supervised landscaping projects. As a result of this work experience, Gordon has the managerial and technical knowledge and capability to run a landscape contracting business. Petitioner is such a landscape contracting business, although it has not undertaken any landscaping projects recently. Its last project was completed two years prior to the final hearing in this case. Since that time, the business has been inactive. Gordon's two sons, working as subcontractors under Gordon's general supervision, have performed the physical labor and the actual landscaping involved in the previous jobs Petitioner has performed. Gordon herself has never done such work and she has no intention to do so in the future. Instead, she will, on behalf of Petitioner, as she has done in the past, use subcontractors (albeit not her sons inasmuch as they are no longer available to perform such work.) Petitioner filed its application for "minority business enterprise" certification in the area of landscape contracting in March of 1994.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Respondent issue a final order denying Petitioner's application for certification as a "minority business enterprise" in the area of landscape contracting. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of October, 1995. STUART M. LERNER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of October, 1995.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: The Department of Transportation (D0T) advertised for bids on State Project Number 97879-3336 in July of 1986. The project involves new roadway construction with specified materials, drainage installation, curbs, gutters and sidewalks adjacent to the Orange Bowl in Dade County. The D0T set a disadvantaged business enterprise (DBE) participation goal for this project of fifteen percent. In order to comply with this goal, a bidder must state its intention to subcontract with a D0T certified DBE an amount of work equal to or greater than fifteen percent of the total dollar value of its bid. The D0T opened the nine bids received for this project on July 30, 1986. The intervenor Capeletti Brothers, Inc. (Capeletti), submitted the apparent low bid in the amount of $2,044,000.18, and the petitioner Russell, Inc. (Russell), submitted the apparent second low bid of $2,047,503.00 The remaining bids ranged between $2,124,527.32 and $2,851,657.26. Bidders indicate compliance with the minority participation goals established for a project through the submittal of "DBE/WBE Utilization Form No. 1," which is submitted with the bid. In this case, Capeletti provided information on Form No. 1 that it would subcontract with Ivory Modernized Services to do "trucking" and "aggregates" at a dollar amount of $307,622.00, or 15.05 percent of the total contract amount. Russell indicated on Form No. 1 that it would subcontract with Community Asphalt Corporation to do "asphalt paving" at a dollar amount of $352,151.00, or 17 percent of the total contract amount. During the bid letting process, it is the practice of the DOT to conduct a facial review of the "DBE/WBE Utilization Form No. 1" submitted with the bid to determine whether the named subcontractor is a certified DBE or WBE and whether the participation goal set for that project has been met. Prior to awarding the contract, the DOT does not make a separate investigation to determine whether a listed DBE subcontractor is actually capable of performing the work for which the bidder has indicated. Any such investigation is made at or after the time a contractor actually submits to the DOT a request for authorization to sublet, which occurs after the DOT has awarded the contract to the bidder. The DOT considers the successful bidder to be bound to pay a DBE at least the amount listed on Form No. 1 submitted with its bid. If, for some reason, the DBE listed cannot perform the work for which it has subcontracted to perform, the DOT will require the prime contractor to either pay that amount to the listed DBE or subcontract with another DBE for that work. Ivory Modernized Services, Inc. (Ivory), is a DOT certified DBE. In its application to the DOT for certification, it listed "trucking (hauling of aggregates)" as the nature of its business. The DOT requests such information on the application because it publishes a directory of certified DBEs for the use of bidders on state contracts. Prior to submitting its bid, Capeletti and Ivory agreed that if Capeletti were the successful low bidder on this project, Ivory would furnish and deliver aggregates to the job site. It was agreed that the responsibility for obtaining and delivering the aggregates to the project site would rest with Ivory. The sum of $307,622.00 was derived by estimating the quantities of the various types of aggregates needed for the project, the material cost per ton, the hauling cost per ton and the amount and charge for on-site hauling. In the past, Capeletti has directly purchased rock from mining pits in the area. While Capeletti has never before purchased fill from Ivory, Ivory has performed one D0T job where it was responsible for both the buying and hauling of aggregates. Ivory does not own any fill land, pits or fill material, does not do any active pit excavation and does not plan to stockpile aggregate materials for this project. Ivory intends to negotiate with the rock pit owner for the required amounts, types and purchase prices of the aggregates needed, pick up those aggregates from the pits and transport them to the job site. The precise methods of payment for the aggregates has not yet been determined. In order to avoid any potential markups in the price of limerock and aggregates, Russell deals directly with the rock pits in purchasing its materials. Truckers are hired separately to deliver the materials to the job site, and they do not purchase the fill. In its bid, Russell did not list a DBE trucker or hauler because the fifteen percent participation goal could not be reached with amounts expended for trucking alone. It has been the past practice and policy of the DOT to allow all material costs to be included in meeting the DBE participation goal where the DBE subcontractor assumed the actual and contractual responsibility for the provision of the materials and supplies. For example, where a DBE grasser or concrete finisher also assumes responsibility for purchasing and obtaining the sod or concrete and responsibility for supplying those materials to the project site, the costs of the sod or concrete are included in meeting the DBE participation goal. The prime purpose of limiting payments which can be included in the case of "suppliers" who perform some commercially useful function is to prevent mere brokerage or pass-through services as qualifying for full participation in meeting DBE goals. "Commercially useful functions" performed by a "supplier" can include the stockpiling and transporting of materials.
The Issue The primary issue in this proceeding is whether Gulf Coast is entitled to certification as a disadvantaged business enterprise under DOT rule 14-78.05 Florida Administrative Code. Ancillary issues include 1) the sufficiency of proof of Bernard Crooke's membership in a designated group, (i.e. "Hispanic Americans"); and 2) the criteria, if any, that DOT may utilize, other than an individual's membership in a designated group, to determine eligibility of that individual's firm for certification.
Findings Of Fact Gulf Coast and Traffic Engineers, Inc. is a Florida corporation with its principal place of business in Escambia County, Florida. Its address is 8203 Kipling Street, Pensacola, Florida, 32513. (Stipulation of the parties: Petitioner's Exhibit #la, tab 2) Gulf Coast is a "small business concern" as required by Rule 14-78.05, Florida Administrative Code. (Stipulation of the parties). The Florida Department of Transportation receives federal highway funds and administers the program for certification of disadvantaged business enterprises. (T-6,92) Bernard E. Crooke is President of Gulf Coast and sixty- percent owner. He directs the management policies and operations of Gulf Coast. (Stipulation of the parties; Petitioner's Exhibit la, tab 2) Cameron Villar is a remote blood relative of Bernard E. Crooke. He and a cousin did some genealogical research on the Villar family history. He obtained a list of names of genealogical societies in Spain from the American embassy in Madrid. After contacting all the societies on the list, he retained one, and obtained from it a picture of the Villar family crest and a brief history of the family name. The Villars originated in Galicia, Spain. Cameron Villar also prepared a genealogical chart tracing his family (and Bernard Crooke's) back to one of two brothers who came from Spain to the United States. The brothers, Augustus and Emmanuel, were sons of Don Jose de Villar, who is mentioned in the family history provided by the genealogical society. (T-22-24, 30-35; Petitioner's Exhibits #2-#5) Paula Margaret Davidson is related to Bernard Crooke through a common great grandmother. She has known Bernard and his family all her life. She also conducted genealogical research and prepared a chart tracing the family back to Spain. (T-45, 6, Petitioner's Exhibit #6) Joseph Davidson (known as "Buddy" Davidson) was raised by Bernard Crooke's aunt, whom "Buddy's" father married after his first wife died. It was common knowledge in the family and in the Pensacola community that the Villars, including the branch in which "Buddy" and Bernard were raised, were of Spanish heritage. There was a community of Spanish harbor pilots in the Old Warrington Woolsey area. Later the city of Warrington was displaced and was moved to New Warrington. (T-71, 74-75) Bernard's grandfather was one of the bar and harbor pilots. (T-56). The Villar family and its various branches celebrated the Bicentennial with their first family reunion. Seven hundred and fifty members participated, including Bernard Crooke. The family was recognized as playing a significant part in the founding of Pensacola, as the two Villar brothers sailed into Pensacola with General Galvez and received land there as a reward from the King of Spain and as an incentive to create a Spanish colony in Pensacola. A booklet was published for the Bicentennial celebration, "Your Heritage," based upon the research of the family members. (T-64, 83, Petitioner's Exhibit #11). Until the Bicentennial in 1975-76, and the resultant public recognition of the family, being Spanish was not a subject of pride and there was concern about discrimination in the community. ( T- 6 9, 77, 82). Neither Bernard Crooke, nor any of the family members who testified on his behalf, could say for certain whether, as an individual, Bernard Crooke was the subject of bias or discrimination by virtue of his Hispanic cultural heritage. (T- 50, 53, 69, 73, 83). Bernard Crooke was one of nine children in a poor family. He started his construction business approximately twenty years ago with five hundred dollars and two partners. He helped support his business in the early days by delivering papers to rack stands. He put himself through Pensacola Junior College and obtained no further formal education. He eventually bought out the two partners who had other interests and were just helping him get started. (T-80-85). The business has gradually grown to one with gross annual receipts (year ending 9/30/84) of $1,761,117.37. (Petitioner's Exhibits #la, tab 2).
Recommendation Based upon the foregoing, it is hereby RECOMMENDED: That a Final Order be issued finding Petitioner, Gulf Coast, eligible for certification as a Disadvantaged Business Enterprise (DBE). DONE and RECOMMENDED this 3rd day of June, 1986, in Tallahassee, Florida. MARY CLARK 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 3rd day of June, 1986. APPENDIX The following constitute my specific rulings pursuant to section 120.59(2), Florida Statutes on all of the Proposed Findings of Fact submitted by the parties to this case. Rulings on Petitioner's Proposed Findings of Fact Adopted in Paragraphs #1 and #3. Addressed in Background; otherwise rejected as unnecessary. Adopted in substance in Paragraph #11. Adopted in Paragraphs #3-6. Adopted in substance in Paragraphs #3-7. Rejected as unnecessary. Discussion of criteria for certification is found in the Conclusions of Law. Adopted in Conclusions of Law, Paragraph #10. Adopted in Conclusions of Law, Paragraph #10. Rejected as unnecessary. Rulings on Respondent's Proposed Findings of Fact Rejected as unnecessary. Adopted in Paragraph #1. Addressed in Background. Rejected as summary of evidence rather than a finding of fact. Adopted in part in Paragraph #4. The statement that Mr. Villar is not a genealogist is rejected as unsupported by the record. Adopted in part in Paragraph #4; otherwise rejected as immaterial. Rejected as immaterial, except that the Villar Spanish origins are addressed in paragraphs #4 and #7. Adopted in part in Paragraph #5, otherwise rejected as immaterial. Rejected as contrary to the weight of evidence. Adopted in Paragraph #10. Rejected as being immaterial since Petitioner has also been denied loans. See Conclusion of Law, Paragraph #9. Rejected as unnecessary and while an accurate restatement of an isolated portion of testimony, the out-of-context testimony does not reflect the substantial weight of the evidence. See Conclusion of Law, Paragraph #9. COPIES FURNISHED: Charles C. Sherrill, Esquire 435 East Government Street Post Office Box 12316 Pensacola, Florida 32581 Brant Hargrove, Esquire Department of Transportation Haydon Burns Building, M.S. 58 605 Suwannee Street Tallahassee, Florida 32301
Findings Of Fact The Florida Department of Transportation is the state agency charged with the responsibility to develop and adopt criteria for a DBE program, and administer the DBE program. Burkett is a Florida corporation whose sole stockholder is a white female American. She meets the criteria of a socially and economically disadvantaged individual. Burkett applied for certification as a DBE on July 12, 1991, and on October 1, 1991, the Department denied Burkett certification. Burkett submitted additional information and made changes in its internal organization to better conform to the Department's requirements; however, the Department has denied Burkett the designation based upon the owner's lack of expertise in the critical areas of the firm's operation, to wit; she does not possess education or experience in engineering. The parties stipulate that Burkett is substantially effected by the rules being challenged, and possesses standing to bring this rule challenge. In determining the qualifications of an applicant for DBE status, the Department utilizes Sections 334.044(2), 337.137, 339.05, and 339.0805, Florida Statutes; 49 CFR Part 23; the United States Department of Transportation administrative decisions; guidelines and training manuals from USDOT or the Federal Highway Administration (FHWA); and its own rules. At the recommendation of a representative from FHWA, the Department amended the rules being challenged regarding qualifications for DBE certification to explicate the requirement for ownership control, as required by Section 339.0805(1),(c), supra, and 49 CFR Part 23.53, to include the concept of "expertise in critical areas of operation of the business" which is required by the USDOT. The terms "expertise" and "critical areas of operation" are not defined in the Florida Statutes or DOT's rules. The DOT interprets "critical areas of operation" to mean the technical area in which the DBE certification is being sought. Management limited to the day-to-day normal business operations is not considered to be a "critical area of operation." The DOT's evaluation of "expertise" changes from business to business based upon the applicant's type of work. The department expects to see education and experience on the part of the disadvantaged owner in the technical area of operations of the business. The Department denied the Petitioner DBE certification because the disadvantaged owner did not possess engineering experience or education.
Findings Of Fact On September 21, 1987, petitioner, Terrell Oil Company (TOC), filed an application for renewal of its certification as a disadvantaged business enterprise (DBE) with respondent, Department of Transportation (DOT). TOC had been previously certified as a DBE for a two-year period commencing in January 1986. After reviewing the application, DOT advised TOC by letter dated January 20, 1988, that its application had been denied on the grounds the firm "(did) not appear to be performing a commercially useful function nor (was) it an independent business entity as required by D. O. T. Rule 14-78.05, Florida Administrative Code." 2/ The letter of denial precipitated this proceeding. Later correspondence from DOT on February 8, 1988, advised TOC that its existing certification would remain in effect until this proceeding was concluded. According to its original application dated September 21, 1987, TOC was established on February 5, 1986, and engaged in the business of "oil-gas- petroleum products." Its offices were then located at 1908 West Cass Street, Tampa, Florida. The application identified Grady F. Terrell, Jr., a black man, as being the sole stockholder in the firm, its president and chairman of the board. Other directors included Richard W. Gilliam, a white man, and Walter Scott, a black man. The application represented that Terrell served as president and treasurer of TOC while Gilliam held the positions of vice president and secretary. The application reflected also that Terrell and Gilliam shared the power in the areas of policy making, financial decisions, job estimating, bidding and supervising field operations and that Terrell alone had the power to dismiss employees and sign checks. Finally, the application represented that the corporation owned no equipment, it had earned $14,000 in calendar year 1986, Terrell had invested $6,000 of his own money in the firm, and it had two full-time and two cart-time employees. After receiving the original application, two DOT employees made an on- site investigation of the business and conducted an interview with Terrell on October 20, 1987. They found no sign on the building at 1908 West Cass Street indicating that TOC occupied the premises, but they were directed by the landlord to a small 8' x 10' rear corner office. During the interview, Terrell was asked for copies of TOC business contracts but had none. Also, he did not have any cancelled checks, insurance coverage or bonding at that time. Terrell stated he had no employees so no insurance was needed. He represented further that he was "self-employed" by TOC and devoted 100% of his time to that endeavor. When the parties reviewed the application item by item and found several discrepancies or incorrect responses, Terrell agreed to amend his application in the presence of the DOT representatives. As amended, the application reflected that Terrell, Gilliam and J. Anthony Belcher, a white man, were the current directors, the firm had one full-time (Terrell) and no part- time employees, Terrell, Gilliam and Belcher served as president, vice-president and treasurer, respectively, while William V. Gruman, a white man and attorney, served as secretary, and there were no written, oral or tacit agreements concerning the operation of the firm between any persons associated with the firm. Terrell denied that Belcher worked for Belcher Oil Company (BOC), a large oil concern, and described him as a retired individual serving as an independent consultant for TOC. As to Gilliam, Terrell described him as an independent contractor who worked on a 100% commission basis and solicited business for the firm. During the same interview, Terrell represented that the $6,000 investment in capital was actually a loan from a local bank and denied that TOC owned or leased any equipment. Terrell could offer no proof that the firm had earned $14,000 in 1986 and indicated the firm had no projects underway. He described his business as being a broker of gasoline, diesel fuel and motor oil and that other persons supplied and delivered the fuel. According to Terrell, business transactions were conducted in the following manner. He first determined the market price of fuel from BOC, his principal supplier, and based upon that price, submitted a bid on a job. If TOC was successful, Terrell made a telephone call to BOC requesting that the fuel be delivered to the buyer. Through BOC, Terrell was able to purchase fuel two percent below the "rack" rate. TOC then added a percentage of profit to its sales price. In actuality, TOC never had physical possession of the fuel and, accordingly, needed no equipment to engage in this activity. At the same inspection, the DOT personnel confirmed through reading the firm's bylaws that each of three directors had one full vote, regardless of the number of shares held. Thus, the two white directors could outvote Terrell on any TOC decision. Also, a quorum of the directors could convene a meeting and theoretically conduct business without Terrell's knowledge. On November 23, 1987, or a little over a month after the DOT visit was made, TOC adopted a corporate resolution authorizing any one of the three directors to execute binding contracts on behalf of TOC. Thus, either of the two white directors had the authority to enter into contracts without Terrell's approval. A copy of the resolution has been received in evidence as respondent's exhibit 12. Shortly after the above resolution was approved, Gilliam and Belcher were given the opportunity to each purchase 19% of TOC's stock while Gruman was allowed to purchase the remaining 2%. This meant the three white officers now owned 40% of the stock while Terrell owned the remaining 60%. On December 1, 1987, TOC and BOC entered into an agreement whereby TOC agreed to buy fuel and petroleum products from BOC for resale to customers, and in return, BOC extended TOC a $200,000 line of credit. The agreement has been received in evidence as respondent's exhibit 1. Under the agreement, TOC's invoices to customers had to be approved by BOC, and the customers were required to remit moneys due for fuel to a special bank account controlled by BOC. That firm then sent its invoices to the bank and was paid out of the proceeds. The remainder in the account was for the use of TOC. This agreement was negotiated on behalf of TOC by Belcher, whose family once owned BOC, and until 1987 served as a consultant to that oil company. Because of numerous concerns raised during the October 10 visit, DOT continued its investigation of TOC. Besides learning about the above resolution, stock sale and agreement, DOT obtained various corporate records of T0C, including tax returns, cancelled checks, records of fuel sales and applications for minority certification with other governmental entities. Through its investigation, DOT uncovered the fact that Terrell did not devote 100% of his time to TOC as he had earlier claimed but had been employed as a car salesman by Crown Pontiac in St. Petersburg, Florida, on a full-time basis since July 1987. Indeed, Terrell worked there more than fifty hours per week. Contrary to Terrell's representation, authority to sign TOC checks had been delegated to Gilliam who had done so on numerous occasions prior to and after the application was submitted. As to Terrell's contention that TOC owned no equipment, the firm's corporate income tax return indicated it purchased a small tank truck in 1986 and carried the same on its books. The claim that Terrell alone controlled the business was refuted by the firm's corporate records which reflected that the two white board members could effectively control all management decisions and run the business on a day-to-day basis. DOT learned also that, although TOC had five customer accounts in 1988, of which four came from the private sector, the fifth account was with Hillsborough County, a governmental entity, and comprised more than 99% of its total business. In addition to the DOT application, TOC has sought minority business status from the City of St. Petersburg, the City of Orlando, Hillsborough County, Broward County and the federal government. A review of these applications revealed a maze of conflicting information submitted to the respective agencies. For example, Terrell represented to Hillsborough County that one Noble Sissel (a black man) was TOC's vice-president, secretary, treasurer and board member when in fact Sissel never held any of those positions. Terrell represented to Hillsborough and Broward Counties that TOC had two full-time employees while the amended DOT application reflected that TOC had only one. Further, Terrell gave conflicting answers to the various agencies as to the equipment owned by TOC and the purported gross receipts of the firm. In order to perform a commercially useful function, a DBE must manage and perform at least 51% of its work. In other words, the firm cannot subcontract out more than 49% of its business. Also, there is a requirement that a DBE's principal customers be entities other than governmental agencies in order to perform a commercially useful function. Through testimony and admissions of its officers, TOC acknowledged that it was merely acting as a broker. In industry parlance, this means that TOC did all its work by telephone, obtained a seller and buyer and then obtained a common carrier to deliver the product. As such, TOC never took physical possession of the product on its own equipment since it owned none, and it was not responsible for the movement of the product from the terminal to the customer. Further, since TOC purchased virtually all of its fuel from BOC, and under an agreement customer checks went directly to that firm, TOC was, in essence, conducting a broker operation for BOC. Therefore, TOC was not performing a commercially useful function. At hearing, Gilliam was TOC's only witness, and he attempted to establish TOC's entitlement to certification. Besides pointing out that Terrell was a black man and the majority shareholder in the firm, Gilliam attempted to show that Terrell actually controlled and ran the business. Also, he attempted to demonstrate the commercially useful function of the firm by the fact that 80% (4 out of 5) of TOC's five accounts are nongovernmental customers. Although not reflected on the amended or original applications, Gilliam acknowledged that TOC owns one 1200 gallon truck capable of making fuel deliveries. Gilliam contended further that Terrell had made an initial contribution to the corporation of $120,000 of his own funds. However, no proof of this claim was submitted. Given the overwhelming contradictory evidence of record, and the numerous inconsistencies in the testimony of TOC representatives, Gilliam's testimony is not accepted as being credible.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered denying the application of Terrell Oil Company for certification as a Disadvantaged Business Enterprise. ENTERED this 9th day of November, 1988, in Tallahassee, Florida. DONALD R. ALEXANDER 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 9th day of November 1988.
Findings Of Fact On November 30, 1982 the Chancellor of the State University System approved Amendment 567, as revised, to the Capital Outlay Implementation Plan. This Amendment budgeted $6,350,000 for the construction and equipment of a teaching gymnasium at Florida International University on the Tamiami Campus. Included within that figure were $350,000 of planning expenses appropriated by the 1981 Florida Legislature and $6,000,000 appropriated by the Legislature in 1982 for the expenses of construction, art work and contingencies. In the early part of 1983 the State University System advertised for bids from contractors to construct the gymnasium. The bids were open on May 17, 1983 at 2:00 PM. on the Florida International University Tamiami Campus. Petitioner's base bid of $5,998,000 was the lowest of the 17 received, nevertheless it was $350,000 above the estimate in Amendment 567. The next lowest bid was for $6,045,000. The bid specifications required that six alternatives in addition to the base cost be bid on, but through an oversight Sanmar's bids on these alternatives did not conform to the bid specifications. Sanmar's alternative bids failed to indicate that the amount reflected was in addition to the base cost bid. However, because the issues in this case concern the base bid amount, Sanmar's error with respect to the alternatives is not material. At the May 17, 1983 bid opening Respondent's agent, the architectural firm of Greenleaf-Telesca, announced that it would recommend to the Board of Regents that all bids be rejected as being in excess of the funds available through legislative appropriations. Respondent intends to make design changes in the project to make it less expensive and to then rebid it. On May 18, 1983 Sanmar timely filed a protest to the rejection of its bid. Subsequent to May 17, 1983 and Respondent's decision to reject all bids, the Florida Legislature through Section 2(2)(y), Chapter 83-333, Laws of Florida (1983), appropriated an additional $500,000 for the construction of the gymnasium. This appropriation became effective on July 1, 1983. After its receipt of Sanmar's bid protest Respondent provided in a letter dated June 3, 1983 the figures on which the Respondent based its decision to reject all bids including Sanmar's. These figures follow: Architects fee including additional services $ 379,240.00 **Architects construction observation (included in architects estimate as part of the fee and contingencies) $ 90,000.00 Sanmar Base Bid $5,998,000.00 Equipment $ 200,000.00 Contingency (3 percent of construction cost) $ 179,940.00 Based on Sanmar's bid $6,847,420.00 Artwork $ 28,240.00 $6,875,420.00 **Estimated based on 18-month construction time. Petitioner has taken issue with the 3 percent contingency amount included in the above figures, however, the evidence shows that 3 percent is a reasonable amount based upon the State University System's experience with previous construction and is a fair estimate to insure that projects once begun can be adequately funded by the amount appropriated for their construction.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Board of Regents enter a Final Order rejecting all bids for the construction of a teaching gymnasium at the Tamiami Campus of the Florida International University. DONE and RECOMMENDED this 15th day of December, 1983, in Tallahassee, Florida. MICHAEL PEARCE DODSON Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of December, 1983.
The Issue Whether Respondent, Department of Education's ("Respondent"), Notice of Intent to Award the contract for Request for Proposal No. 2005-01 ("RFP"), for Administration of the Florida Comprehensive Assessment Test ("FCAT"), is contrary to Respondent's governing statutes, rules or policies, or the bid or proposal specifications. Whether Respondent's proposed action was clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact On the evidence, it is found and determined that: I. The RFP and Stage I, II and III Evaluation Respondent issued the RFP on August 19, 2004, seeking competitive proposals for a contract for administration of the FCAT. Respondent's intent in this procurement is to contract with a qualified vendor who will be capable of performing the contract at the lowest possible cost to the State. This contract impacts all Florida public schools. The RFP included the following provisions regarding the general scope of the requirements and bidder responsibilities. 1.0 . . . A contract, if awarded, will be awarded by written notice to the qualified and responsive bidder whose proposal is determined to be most advantageous to the state, while taking into consideration price and other criteria specified by the RFP. 1.3 . . . This RFP defines the requirements for implementing the FCAT assessment program. The RFP and the selected contractor's proposal, together with clarifying documents, define the work to be conducted under contract. These documents will be incorporated into the contracts resulting from the FCAT project award. Because the FCAT assessment program is technical and complex, it is possible that a responsive proposal may not totally or clearly reflect RFP requirements in all details. If the proposal of a contractor selected as a result of the bidding process is inconsistent with the RFP, the requirements of the RFP prevail; the selected contractor will be expected to perform all RFP requirements without an increase in cost above the proposed cost. * * * 5.18 Acceptance of a Proposal The Department reserves the right, in its sole discretion, to waive minor irregularities in a proposal. A minor irregularity is a variation from the RFP that does not affect the price of the proposal, or give one bidder an advantage or benefit not enjoyed by other bidders, or adversely impact the interest of the Department. Waivers, when granted, shall in no way modify the RFP requirements or excuse the bidder from full compliance with the RFP specifications and other contract requirements if the bidder is awarded the contract. Rejection of Proposals Proposals that do not conform to the requirements of this RFP may be rejected by the Department. Proposals may be rejected for reasons that include, but are not limited to, the following: The proposal contains unauthorized amendments, either additions or deletions, to the requirements of the RFP. The proposal is conditional or contains irregularities that make the proposal indefinite or ambiguous. The proposal is received late. The proposal is not signed by an authorized representative of the bidder. The bidder is not authorized to conduct business in the State of Florida or has not included a statement that such authorization will be secured prior to the award of a contract. A bid bond is not submitted with the proposal. The proposal contains false or misleading statements or provides references that do not support an attribute, capability, assertion, or condition claimed by the bidder. The proposal does not offer to provide all services required by this RFP. Department Reservations and Responsiveness of Proposals The Department reserves the right to accept or reject any or all proposals received. 5.22 . . . In the event of conflict between the language of a proposal and the language of the RFP, the language of the RFP shall prevail. * * * 7.1 Stage I: Evaluation of Mandatory Requirements (Part I) During the Stage I evaluation, the Office of Agency Procurement and Contracting Services will determine if a proposal is sufficiently responsive to the requirements of this RFP to permit a complete evaluation. In making this determination, the Office of Agency Procurement and Contracting Services will evaluate each proposal according to the process described in this section. The RFP required prospective vendors to submit sealed proposals in two parts, a technical proposal and a price proposal. The technical proposals were reviewed and scored by an evaluation committee prior to opening of the sealed cost proposals. Failure of a bidder to meet every item on the Stage I list would not necessarily result in elimination of the proposal from consideration. A proposal would be eliminated only if it contained a material irregularity. "Stage I" of the process was identified in the RFP and is basically a check list of documents and commitments that are to be included with proposals. In accordance with Section 7.1, the purpose of the Stage I review is to determine whether the proposals are sufficiently responsive to be considered by the evaluation committee. Two of Respondent's employees opened the technical proposals and checked the proposals against the Stage I list to make certain "Mandatory Documents and Statements" required by Section 7.1 of the RFP were present. They did not make any substantive judgments about the extent of compliance. In performing this Stage I review, Respondent's employees followed the department's standard operating procedures. No scoring points were associated with the Stage I check list review. The technical portions of the RFP were categorized into two parts: Part II titled, "Bidder Qualification and Experience"; and Part III titled, "Technical Proposal for Administration." Bidders could receive a maximum of 50 points for Part II and a maximum of 50 points for Part III, a total maximum possible points of 100 for the technical proposals. The RFP is designed to ensure that only qualified, responsible bidders will be eligible for award of the contract. In order to be considered eligible, a bidder was required to receive a minimum of 70 cumulative points for the technical proposals. Each of the two parts of the technical proposals was broken down into ten categories or criteria. The RFP provided that an evaluation committee would assign scores from one to five, with five being the highest possible score, for each of the criteria. The RFP consists of approximately 200 pages of technical specifications, instructions, and guidelines including appendices and addenda issued after the original release date. Each of the bidders submitted technical proposals in excess of 400 pages. The RFP provided that evaluation of proposals would be based on a holistic approach so that the proposals could be scored based on consideration of the whole package proposed by the bidders without artificial limitations on the evaluators' ability to evaluate the entire proposal and score it accordingly. The evaluation process was designed to be as objective as possible, but a degree of subjective judgment is involved in the scoring of the proposals. The 20 scoring criteria for Parts II and III were designed to cover broad categories of qualifications against which the proposals were judged. Because of the holistic evaluation approach, there was no intent to evaluate proposals on the basis of an item-by-item determination. The committee evaluating the proposals was selected to include representatives familiar with various aspects of the FCAT, which were covered in the proposals. It also included a person not employed by Respondent as required by new procurement guidelines and also included a parent representative. The evaluation committee was selected so that each member brought a different expertise or perspective to the process. The evaluation committee was instructed on how the evaluation process was to be accomplished. The evaluators took their responsibility seriously and did a thorough job. For Part II, the rating scale ranged from five (excellent) to one (unsatisfactory). A score of five means the evaluator found that the bidder demonstrated superior qualifications and experience to perform the required tasks. A score of one meant the bidder demonstrated insufficient experience and capability to perform the required tasks or did not establish its qualifications and experience. The RFP stressed in bold typeface that "[t]he evaluation of Overall Bidder Qualifications and Experience will be completed by the proposal evaluation committee using 'holistic' ratings. Each proposal evaluation committee member, acting independently, will assign a single rating for each criterion identified in Appendix M." The "holistic" approach referenced in the RFP means that Respondent looks at the proposal as a whole. The RFP and the administration of the FCAT is very complex and the evaluators are not required to look at each component of the proposal, but are to judge the whole proposal. For Part III, the rating scale also ranged from five to one. The criteria for what merited a five or a one changed, however, from Part II. A score of five means that the bidder proposed superior solutions to the requirement of the RFP and has proposed products and services that are desirable for use in the FCAT administration program and are likely to create a high quality assessment program that meets sound psychometric standards that are clearly feasible to implement. A score of one under Part III means that the bidder proposed inferior or incomplete solutions to the requirements of the RFP or has proposed products and services that would be technically indefensible, would create a flawed assessment program not meeting psychometric standards, or would not be feasible to implement. Again, the RFP stressed in bold typeface that "[t]he evaluation of the Technical Proposal will be completed by the proposal evaluation committee using 'holistic' ratings. Each proposal evaluation committee member, acting independently, will assign a single rating for each criterion identified in Appendix N." The proposals were scored independently based upon the proposal's compliance with applicable RFP criteria; the proposals were not scored based upon how they compared to each other. Indeed, the evaluators were instructed not to discuss their scores so that each evaluator would establish their own internal criteria that was consistent across proposals. Although none of the proposals were deemed non- responsive in this stage, there are indications that failure to meet certain RFP requirements were noticed by the evaluation committed and scored accordingly. Stages II and III of the evaluation process took four days. Representatives of the bidders, including its attorney, attended all of the Stage II and III evaluation sessions. Documentation of Subcontractor Information. The RFP included the following specifications relating to documentation of subcontractors and printers. 4.6.1 Subcontractors The test administration contractor may choose to employ subcontractors for the completion of one or more tasks. If the bidder proposes to employ a subcontractor(s), the qualifications and experience of the subcontractor(s) will be documented in the proposal at the same level of detail as those of the bidder. A separate chart in the proposal will identify all of the subcontractors proposed to be involved in the project and the services they are expected to provide. All subcontractors must be approved by the Department. It is assumed that the contractor will use outside printers for some materials. Printers will be documented as subcontractors, and the management plan will identify the proportion of materials to be printed by the contractor and by outside vendors. Procedures for quality control and security during printing are to be described. Destruction of secure materials is addressed in Section 3.7.4. The contractor will assume responsibility for all services offered in the proposal whether or not they are performed or produced by the contractor or by subcontractors. The Department will consider the selected contractor to be the sole point of contact for contractual matters, including payment of any and all charges resulting from the contract. Other specifications in the RFP contained similar or identical language. The RFP also provided the following in Section 5.31 with respect to subcontractors: Any change of subcontractors must be approved in advance by the Department. In the event of poor performance by a subcontractor, the Department reserves the right to direct the contractor to replace that subcontractor. While Item 10 on Page 77 of the RFP required a representation from the vendors that they had identified all subcontractors and the amount of work to be performed directly by each subcontractor, the only investigation that Respondent undertook to confirm the accuracy of these statements was the Stage I evaluation. The Stage II and Stage III evaluators did not check to ensure that all of the subcontractors had been documented as required by the RFP. The RFP specifically required that all printers be identified and documented as subcontractors. Section 6.3 of the RFP requires the management plan to specifically identify the proportion of materials to be printed by outside vendors. Section 4.6.1 of the RFP on Page 53 states that if a bidder proposes to employ a subcontractor, the qualifications and experience of the subcontractors will be documented in their proposal at the same level of detail as the bidder. That section also provides that "printers will be documented as subcontractors." The timeliness, accuracy, and security of the printing operations are very important to the FCAT program; and the qualifications and experience of the printers, who would actually print the materials, is an important component of this procurement. As it relates to the "back-end" printing of the student and parent reports, there are privacy concerns that are particularly sensitive. The RFP provisions were included to ensure that, if a vendor was going to use outside printers for some of the activities, Respondent would be able to tell from the response who all of those printers were and what services they were going to perform. The RFP was drafted to ensure that Respondent was dealing with vendors who were qualified and experienced and able to deliver the products requested in the RFP. There were specific requirements in the RFP as to how the bidders were supposed to identify prior contracts, provide contact information, and document the printers who were going to do any of the actual printing. Section 6.2 on Page 74 of the RFP required that all vendors were to document contracted services for previous assessment projects similar to the one described in the RFP. For each of those projects, the documentation was supposed to include a description of the services and products delivered, the contract period, the name, address, and telephone of the contract person for each of the contracting agencies. This provision was applicable to all of the printers who were involved in this contract. The printers were also supposed to document how they were going to monitor security and provide quality control during the printing process itself. The intent of the RFP was to have bidders document who was going to do the printing, whether it was subcontractors, sub-subcontractors, or sub-sub-subcontractors. Section 5.27 on Page 65 of the RFP states that "if a bidder proposes to employ a subcontractor, the subcontractor's qualifications and experience will be documented in the proposal at the same level of detail as that of the bidder. Procedures for quality control and security of the work tasks performed by the subcontractors are to be described." These provisions are not discretionary. They are mandatory and require all vendors to provide a description of the quality control and security measures to be employed by all subcontractors, including the printers who must be documented as subcontractors. CTB's proposal identified The Grow Network as the entity that would be responsible for printing requirements. The Grow Network is an affiliate of CTB. CTB's proposal included documentation regarding The Grow Network's qualifications to perform the printing. In its response to the RFP, CTB provided extensive documentation and met all of the requirements of the RFP with respect to its front-end printers. Indeed each of those printers was identified in paragraph 10 of the transmittal letter that accompanied the CTB proposal. The Grow Network was also responsible for providing the back-end printing for the reports to be sent to the parents and students. The Grow Network was identified as doing 20 percent of the printing. However, the Grow Network does not actually do any printing themselves. At the hearing, the Grow Network claimed that it was the "print publisher" of the back-end reports. It stated that the Grow Network utilizes a "distributed printing approach." This, in fact, meant that the printing was going to be subcontracted out. The services that would be subcontracted out by the Grow Network include digital printing, collating, packing, distribution, and tracking. CTB's proposal states that GDS, a digital imaging company, will be the print facility utilized by the Grow Network to perform these aspects of the FCAT report printing requirements. CTB's proposal describes the corporate capabilities and experience of GDS, including descriptions of the California and New Jersey projects where GDS was utilized by the Grow Network as its print facility. The RFP also required bidders to provide examples of materials to demonstrate the quality of the work done on similar projects. Accordingly, CTB included sample reports printed by the Grow Network in conjunction with GDS, for the California and New Jersey projects. Notwithstanding the foregoing detailed documentation of both the Grow Network and GDS, Petitioner asserts that CTB failed to comply with the RFP because the CTB proposal indicates that much of the printing work will be out-sourced without disclosing who is actually going to be providing these services. However, CTB's proposal identifies only one printing facility, GDS, that will be utilized as the print facility under its distributed printing approach. CTB's proposal specifically states that "Grow currently uses GDS to support their California and New Jersey projects, and they will employ GDS' services for the Florida reporting project." CTB's proposal identifies other printing facilities, Delzer, R.R. Donnelley, and Bowne, that Grow could utilize on the FCAT with Respondent's approval. These other companies were potential "backup" printers, which were identified in case Respondent preferred using another printing facility. Otherwise, the Grow Network intended to utilize GDS as the sole printing facility on the FCAT and has a commitment from GDS to perform the tasks required. The RFP does not require commitment letters from subcontractors. The RFP required only the identification of the proposed printers, which could be changed with Respondent's approval. CTB has also indicated in its response that it will utilize 180 employees of Kelly Services, at three different locations, to supervise approximately 3,000 scorers. However, nowhere in the proposal has CTB documented Kelly Services as a subcontractor, nor provided information regarding their experience and qualifications to perform this work. CTB uses Kelly Services as a recruiting service provider. CTB is responsible for the hiring, training, and directing of the Kelly Services personnel and ultimately for the deliverables received from those employees. Kelly Services is not a subcontractor as contemplated in the RFP, because they are not held accountable for their deliverables. Accordingly, CTB's proposal is not deficient for failing to document Kelly Services as a subcontractor. Even if the failure to so document Kelly Services were a deficiency in CTB's proposal, the lack of detail would only lower CTB's score, not make it non-responsive. The Post-submittal Clarification Process. The RFP provided at Section 7.0 that each bidder would be required to make a presentation to the evaluation committee after the technical proposals were opened and that information presented or issues clarified during the presentation might affect the number of points an evaluation committee member assigned to a given proposal. On the first day of the evaluation process, the bidders were required to make separate oral presentations to the evaluation committee. Following those oral presentations, the evaluation committee was to begin the process of scoring the proposals based on the various RFP criteria. This was to be a "closed session" during which the vendors were not permitted to interact with the evaluation committee members; likewise, the evaluation committee members were not permitted to direct any questions to the vendors. RFP Section 7.0 spells out the rules and processes for conducting the oral presentations of the vendors. This includes the imposition of time limits on the presentations and questions from evaluators, which were to be strictly followed. Section 7.0 states, in pertinent part: The purpose of the presentation will be for the bidder to describe its offering of products and services and make any statements that will enhance understanding of its offering. The proposal evaluation committee will NOT evaluate the presentations or otherwise award points for the quality of the of the presentation. Information presented or issues clarified during the presentation MAY affect the number of points a proposal evaluation committee member assigns to a given proposal. . . . The presentation shall not exceed 30 minutes with an additional 15 minutes reserved for proposal evaluation committee member questions. These meetings will be open to the public; however, only members of the proposal evaluation committee may ask questions of the bidder. The above-quoted language in the RFP does not contemplate written submissions by vendors following the oral presentations. Nothing else in the RFP specifically authorizes vendors to clarify information in their proposals after the presentations have concluded. Thus, the oral presentation part of the evaluation process is the only RFP-authorized mechanism available to evaluators for seeking clarification of the proposals. Because clarifications are permissible during the vendor presentations, the RFP expressly states that such clarifications may affect scoring of the proposals. By contrast, nothing in the RFP authorizes the evaluators to seek or consider in scoring the proposals any vendor clarification made in any other form or at any other point, whether before or after the oral presentations. In fact, considering any information received from the vendors outside of the oral presentations would be inconsistent with RFP Section 5.3, which restricts communications by bidders with Respondent's staff. In short, to the extent a clarification of a proposal was needed, under the RFP, it should have been provided orally during the vendor presentations. Each of the bidders made a presentation to the evaluation committee. During the presentations, members of the evaluation committee asked bidders various questions relating to their respective responses to the RFP. One of the members sought clarification regarding the total number of full time equivalent ("FTE") hours for the persons identified in the proposals. Although the evaluation team was not given any specific standards or base lines to utilize in scoring the staffing and personnel commitments submitted by the parties, a bidders' commitment of personnel resources was an important factor for several of the criteria in the RFP. The bidder representatives for CTB and Petitioner were not able to provide the requested FTE information at the time of the presentation. Harcourt's representatives, who had had the benefit of hearing the presentations made by Petitioner and CTB, were able to answer the FTE question at the presentation. Because the evaluators had lingering questions on staffing, Respondent made a decision to send out questions to two of the three vendors following completion of the oral presentations. No scoring was done on any of the proposals prior to the time Petitioner's and CTB's responses were presented to the evaluators. At least some of the evaluation committee members felt that the staffing information was critical. The questions were not based on the presentations by the vendors, but were based on the evaluation committee members' concerns that had not been resolved by the oral presentations. The questions reflected areas that the evaluators were not able to understand from the initial proposals submitted. After the presentations, Respondent delivered letters dated August 30, 2004, to Petitioner and CTB, but not to Harcourt, asking them to provide the requested FTE information by the following day. CTB and Petitioner both promptly provided the information requested. CTB's August 31, 2004, written response to the FTE question included a chart that identified all personnel and the associated FTEs that would be assigned to the project. This FTE chart was prepared by Diane Driessen, CTB's senior program manager who was one of two CTB employees primarily responsible for preparing CTB's response to the RFP. As a format for its written response, CTB utilized the existing chart for Professional Personnel Responsible for Major Contract Activity (Figure 9), which was in its proposal. CTB added to this chart the additional personnel to reflect the total FTEs for the project as a whole. CTB took the material in the proposal and presented it in a consolidated format. CTB combined the monthly activities by program chart, which was Table 9, with the key personnel chart, which was Figure 9, and handscoring resources presented in the proposal. The additional named personnel in its response were not named in the original figure of key personnel because they were not considered responsible for major contract activities. It was an oversight that the chart still retained the heading, "Time Task Chart for Key Project Personnel" when it actually reflected the 330 total FTEs for the whole project team as requested by Respondent. The cover letter to Respondent explained that CTB was listing all personnel, not just "key personnel." All of the unnamed persons added to the chart are identified by position in the original proposal. As part of its written response to Respondent's written requests for additional information, CTB also included a written recap of the questions and answers from its oral presentation. The evidence demonstrated that the information provided by CTB after receiving Respondent's staff's questions included corrections of errors contained in CTB's initial response to the RFP. This information was presented to the evaluators for them to review and consider in the scoring process. No one from Respondent made an analysis to determine whether the information in the supplement was contained in the original proposal before it was presented to the evaluators. The RFP also required the vendors to provide all required information by the deadline that the proposals were to be received. Respondent was obligated to follow these provisions and not accept any information in a manner inconsistent with them. In addition, bidders were required to commit to complying with all requirements of the RFP if awarded the contract: I certify that this Proposal is made without prior understanding, agreement, or connection with any corporation firm, or person submitting a proposal for the same materials, supplies or equipment, and is in all respects fair and without collusion or fraud. I agree to abide by all conditions of this Proposal and certify that I am authorized to sign this Proposal for the Proposer and that the Proposer is in compliance with all requirements of the Request for Proposal including but not limited to, certification requirements. . . . The supplemental information submitted by CTB should have been included in CTB's initial submittal. The fifth bullet point of Section 4.6.2 of the RFP on Page 54 required bidders to indicate by name the professional personnel to be responsible for major contract activities with an estimation of the amount of time and full-time equivalencies each person was going to devote to the tasks under the contract. The proposal was also supposed to include a vitae for all such professional personnel. This bullet point was not limited to only those who had a supervisory role. It was the intention of the bullet point that the individuals should be identified by name, including software development staff. Much of CTB's software development staff was not identified by name in its initial response, but they were identified in the supplement. The RFP required vendors to provide the total time commitment for key personnel in the initial submission and required that the bidders identify by name the professional personnel to be responsible for major contract activities. The time commitment for some of the key project personnel that CTB identified in its initial proposal were significantly "revised" in its supplement. These "revisions" purportedly correct "errors" in the initial response and include changes to the time commitment for "key project personnel," including the project manager for manufacturing, senior research scientists and the scoring director for one of the major scoring sites. There are six new names that appear in CTB's supplement, as well as numerous revisions to the time commitment of key personnel. In its written questions to the vendors, Respondent did not request any revisions or corrections of error with respect to any of these key personnel. The evidence is clear that there are "revisions," corrections of errors and significant reformatting that were tailored to address lingering concerns of the evaluators. CTB's supplemental proposal also included a new chart broken down with many different allocations of days that did not appear anywhere in the original proposal. This submittal also included a number of different "to be assigned" categories that were not specifically included on the chart in the initial submittal and a re-categorization of some of the positions. The evaluation committee members would not have had enough time to make an assessment as to whether that information was in the original proposal. Had CTB not provided its supplemental information, the evaluation team would have had a significantly different view point on CTB's staffing. After the oral presentations, Petitioner also received a written question regarding staffing from Respondent. Petitioner's response was a listing of the FTEs taken from the charts already contained in the original proposal. Petitioner was concerned with the procedure that was being implemented, but after seeking advice of counsel, submitted the response nonetheless. Harcourt was not given this opportunity. RFP Section 5.16 does not address proposal clarifications, but it does impose limitations on the consideration of proposal "amendments." Section 5.16 states that, absent a specific request by Respondent, any "amendments, revisions, or alterations to proposals will not be accepted after the deadline for the receipt of proposals." In addition, Section 5.16 does not address when, during the evaluation process, Respondent may request a vendor to amend a proposal. This timing issue is only addressed by statute in Subsection 120.57(3)(f), Florida Statutes (2004), which states that "no submissions made after the bid or proposal opening which amend or supplement the bid or proposal shall be considered." However, the timing of when Respondent could request a proposal amendment under Section 5.16 is not at issue in this case. Respondent acknowledges that it made no such request in this case. Absent a specific request, Section 5.16 precluded Respondent from considering any amendment to a proposal offered by any vendor. CTB's written responses to Respondent's written questions amount to a clarification of their bid proposal, since then were submitted only after Respondent requested the information. The responses do not constitute an amendment or supplement to the proposal. The Evaluation Process Immediately following the bidders' oral presentations and receipt of the bidders' responses to the evaluators' questions, the evaluation committee met as a body and reviewed each of the proposals. Dr. Orr and Dr. Melvin were co-chairpersons of the committee and facilitated the evaluation committee review of the technical proposals. They did not participate in the actual scoring of proposals. The evaluation committee reviewed the three proposals consecutively, evaluating them against the criteria in the RFP. Open discussion about the criteria and the locations within the proposals where criteria were addressed was encouraged and took place. Whether one bidder was slightly better than another bidder was not the basis for determining the contract award. The RFP provided a balanced formula that sought to ensure the competency of the awarded by requiring a minimum technical score of 70 while rewarding the competent bidder that submitted the lowest price. In accordance with the RFP, the evaluation committee assigned holistic ratings to the technical proposals, judging them based on the quality of the proposals as a whole. Each evaluator independently scored the proposals by assigning a score from one to five for each of the 20 criterion in the RFP. The evaluation committee did not compare the proposals to each other. The evaluation committee completed the evaluation of the first proposal before considering the second proposal and completed the evaluation of the second proposal before completing the evaluation of the third proposal. Alternative Proposals. The RFP permitted bidders to propose alternative approaches for meeting Respondent's objectives, but provided that no cost savings or increases for alternative proposals could be referenced in the technical proposal. Any cost savings or increases for alternative proposals were required to be submitted in a separately sealed package and clearly labeled. None of the bidders included any reference to cost savings or increases in their technical proposals. Petitioner's proposal clearly marked its alternatives. CTB sometimes identified its alternatives with a special marker and sometimes simply described them within the text of the RFP. Harcourt generally did not clearly designate its alternatives. During the Stage II and III evaluation process, a committee member raised a question regarding assigning points for alternative proposals. Because the RFP did not provide a mechanism for evaluating the alternatives, an internal decision was made by Respondent not to consider the alternatives at all in connection with scoring the proposals. The members of the evaluation team were told to disregard the references to alternative proposals submitted by each of the bidders. There was no provision in the RFP that was relied upon in making that determination. The evaluators were given no guidance as to which provisions of the various proposals should not be considered. This led to inconsistencies in what was treated as an alternative and not scored, versus what was treated as part of the base proposal and scored. It is clear that the decision not to consider alternatives resulted in confusion and inconsistency in the evaluation process. For example, one evaluator, Clarence Reed, indicated that if a proposal went beyond the requirements of the RFP and offered something that was not required, but was an enhancement, he viewed that as an alternative and would not have considered it. Similarly, the chairperson of the evaluation committee and one of the facilitators for the evaluation process, Dr. Orr, testified that "enhancements" should not have been considered. By contrast, most of the evaluators viewed offerings by vendors that went beyond the requirements of the RFP and did not include a cost to Respondent as "enhancements" that could be considered in their evaluation of the proposals. Likewise, Dr. Melvin, one of Respondent's facilitators for the evaluation team, believed that an "augmentation" was not the same as an "alternative." Thus, in many instances, when a vendor offered something beyond the requirements of the RFP, at no cost to Respondent, and did not identify it as an "option" or "alternative," it was considered in the scoring by at least some of the evaluators. The evidence is clear that there are portions of the proposals submitted by Harcourt and CTB that was essentially the equivalent of no cost "alternatives" that were considered by the evaluators while Petitioner's clearly identified "alternatives" were not. In sum, whether a particular proposal was an "augmentation," "option," "alternative" or an additional clarification created confusion among the evaluators. As a result, there was no consistency in terms of what the evaluators could consider in the proposals and what they could not consider. While it is impossible to quantify the exact impact of the decision not to consider alternatives, it is clear that Petitioner's bid received a disproportionate negative impact because many of its important enhancements, which were being offered to Respondent at no cost were listed as "alternatives" and never factored into the evaluation process. There were several alternatives proposed by Petitioner that would have been enhancements to the current program and would have been made available at no cost to Respondent. Thus, Petitioner's score was artificially influenced in a negative way. By contrast, the evidence is clear that CTB and Harcourt, in many instances presented different ways to accomplish tasks without specifically utilizing the term "alternative" or "option" and such matters were factored into the evaluation. The claim by Respondent and CTB that the decision not to consider alternatives was applied even-handedly is not supported by the evidence. Because there was not a consistent manner in which the various companies presented their "enhancements," "augmentations," "options" or "alternatives," Respondent's determination to exclude consideration of "alternatives" precluded the evaluators from fairly determining what each of the vendors could actually provide to the program. It also meant that the vendors were not evaluated on an equal footing. Thus, the decision was contrary to the bid specifications. In spite of these concerns, the preponderance of the evidence does not demonstrate that Respondent's instruction to evaluators not to consider alternatives rendered the proposed agency action clearly erroneous, contrary to competition, and/or arbitrary and capricious because Respondent was not obligated to accept any of the alternatives offered by a bidder. The Price Proposals. Respondent's evaluation of the three bidders' proposals established that each of the bidders was capable and qualified to perform the work under the contract. The bidders' price proposals remained sealed until after the evaluation committee completed its scoring of the technical proposals. The price proposals were evaluated based on a formula that awarded 50 points to the bidder with the lowest price. The remaining bidders received points based on a proportion or ratio that compared their price to the low bidder's price. The RFP provided at Section 7.4, Page 82, in pertinent part: A total of 50 points will be awarded to the lowest acceptable Cost Proposal. Proposals with higher costs will receive the fraction of 50 points proportional to the ratio of the lowest proposal cost to the higher cost proposal. The fractional value of points to be assigned will be rounded to one decimal place. For example, if the lowest responsive cost were $50,000.00, the bid would receive 50 points. If the next lowest responsive cost proposal were $75,000.00, it would receive 33.3 points. If the highest responsive cost proposal were $100,000.00, it would receive 25 points. Upon opening the three bidders price proposals, it was determined that Petitioner's bid for the base and renewal period was $224,969,699; Harcourt's bid was $167,055,970; and CTB's bid was $140,107,439. On September 23, 2004, Respondent posted a Notice of Intent to Award the contract for the FCAT administration to CTB. The posting showed the final scores of the three vendors as follows: Proposers Mandatory Bidders Technical Total Cost Total Requirement Qualifications/ Quality Points Proposal Points Met Experience Stage III (Stages Stage IV Stage Stage II II&III) V Pearson Yes Educational Assessment 44.6 44.3 88.9 31.4 120.3 Harcourt Yes 42.7 42.2 84.9 42.4 127.3 CTB/McGraw Yes Hill 43.8 44.9 88.8 50 138.8 CTB's price for performing the contract over a five-year period is approximately $85 million less than the price proposed by Petitioner and approximately $27 million less than the price proposed by Harcourt. Over a three year contract period, CTB's price for performing is approximately $53 million less than the price proposed by Petitioner and approximately $14 million less than the price proposed by Harcourt.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commissioner of the Department of Education adopt this Recommended Order and enter an final order awarding the contract for RFP No. 2005-01 to the low bidder, CTB/McGraw-Hill, LLC. DONE AND ENTERED this 8th day of February, 2005, in Tallahassee, Leon County, Florida. S DANIEL M. KILBRIDE 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 8th day of February, 2005. COPIES FURNISHED: J. Stephen Menton, Esquire Rutledge, Ecenia, Purnell & Hoffman, P.A. 215 South Monroe Street, Suite 420 Post Office Box 551 Tallahassee, Florida 32301 Cynthia S. Tunnicliff, Esquire Pennington, Moore, Wilkinson, Bell & Dunbar, P.A. 215 South Monroe Street, Second Floor Post Office Box 10095 Tallahassee, Florida 32302-2095 Donna E. Blanton, Esquire Radey, Thomas, Yon & Clark, P.A. 313 North Monroe Street, Suite 200 Post Office Box 10967 Tallahassee, Florida 32302 Jason K. Fudge, Esquire Florida Department of Education 1244 Turlington Building 325 West Gaines Street Tallahassee, Florida 32399-0400 W. Robert Vezina, III, Esquire Vezina, Lawrence & Piscitelli, P.A. 318 North Calhoun Street Tallahassee, Florida 32301-7606 Daniel J. Woodring, General Counsel Department of Education 1244 Turlington Building 325 West Gaines Street Tallahassee, Florida 32399-0400 Lynn Abbott, Agency Clerk Department of Education Turlington Building 325 West Gaines Street, Suite 1514 Tallahassee, Florida 32399-0400
Findings Of Fact Petitioner, E. J. Strickland Construction, Inc. (Petitioner), submitted to Respondent, Department of Transportation (Department), a bid on State Project No. 75030- 3518. Petitioner's was the lowest bid received by the Department. Petitioner's bid failed to meet the D.B.E. goals on State Project No. 75030-3518. The D.B.E. goal was 12 percent; under Petitioner's bid, only .04 percent of the contract would be performed by economically disadvantaged business enterprises. The only effort Petitioner made to secure bids of certified D.B.E. contractors to incorporate in its bid to the Department was to run a legal advertisement in the Orlando Sentinel on January 18, 19 and 20, 1986. The Department was scheduled to open all bids on January 22, 1986. Petitioner documented only the advertisements and the fact that it incorporated the only response to the advertisements in its bid in an effort to demonstrate good faith effort to meet the D.B.E. goals. 2/ There is no evidence that Petitioner acted with specific discriminatory intent in preparing its bid on State Project No. 75030-3518. Petitioner proved that it acted in this case precisely as it acted in the only other Department job on which it bid. In that case, Petitioner ordered from the Department plans and specifications and was sent plans, specifications and a bid package and was placed on the Department's list of prospective bidders. In accordance with the custom in the industry, the Florida Transportation Builders Association (FTBA) obtained from the Department the list of prospective bidders as of ten days before the bid letting date and distributed the list to its members. In accordance with the custom in the industry, several DBE and WBE contractors contacted Petitioner, verified that Petitioner was bidding on the project and submitted proposals for inclusion in Petitioner's bid. In that way, Petitioner received enough response from certified DBE and WBE contractors to meet the DBE and WBE goals on the job. In this case, in accordance with the Department's normal practice, the Department only sent Petitioner plans and specifications in response to Petitioner's December 30, 1985 request for plans and specifications. Also, since Petitioner did not specifically request a bid package, the Department did not include Petitioner on its list of prospective bidders. For that reason, no FTBA members, including the certified DBE contractor who bid on Petitioner's previous job with the Department, received notice that Petitioner was a prospective bidder on State Project No. 75030-3518. Had Petitioner been included on the FTBA list, Petitioner probably would have received enough response from certified DBE contractors to meet the DBE goals on this job, too. All four of the other bidders on State Project No. 75030-3518 met the DBE goals. One of them relied entirely on the FTBA list to notify prospective certified DBE contractors. One of them -- including the next lowest bidder, Cone Constructors, Inc. -- also sent a written request for a proposal to Pary, Inc., the same certified DBE contractor who previously had contracted with Petitioner on a Department job that was still ongoing. Another of the bidders on State Project No. 75030-3518 telephoned Pary, Inc., and asked for a proposal. Petitioner is not a member of the FTBA and did not inquire whether it was listed as a prospective bidder on the FTBA list. Petitioner did not make any effort to use the Department's DBE directory to directly contact certified DBE contractors concerning the job. Petitioner did not even contact Pary, Inc., to request a bid although Pary, Inc., was working for Petitioner at the time and had not responded to Petitioner concerning State Project No. 75030-3518. Petitioner's small effort to meet the DBE goals on State Project No. 75030-3518 did not rise to the level of good faith efforts. The evidence that Petitioner acted in this case precisely as it acted in the only other Department job on which it bid does not prove that Petitioner made a good faith effort in this case. To the contrary, it proved only that Petitioner was lucky to meet the DBE goals on the prior contract.
Recommendation Based upon the foregoing Findings Of Fact and Conclusions Of Law, it is RECOMMENDED that Respondent, Department of Transportation, dismiss the bid protest of Petitioner, E. J. Strickland Construction, Inc., and award the contract in State Project No. 75030-3518 to the lowest responsive bidder, Cone Constructors, Inc. RECOMMENDED this 25th day of April, 1986, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 25th day of April, 1986.
