Findings Of Fact By Invitation to Bid for Lease NO. 590:1944, Respondent invited lease proposals for approximately 15,206 square feet of office space "located within the following boundaries: On the North, Aloma Avenue/Fairbanks Avenue the East, Semoran Boulevard the South, Colonial Drive, and on the West, Mills Avenue." The geographic area includes as many as 100 office buildings, although the invitation only generated three bids. The Invitation to Bid announced a Pre-Bid Conference on December 22, 1987. Interested parties were directed to contact Linda N. Treml, whose telephone number was provided, for "bid specifications and information regarding the space." The Invitation to Bid stated that "[a]ny questions concerning this project are to be directed to [Ms. Treml]" and "prospective bidders are encouraged to consult with [Ms. Treml] beforehand in an attempt to enable as correct a bid submittal as possible." The Invitation to Bid required that certain attachments accompany the bid proposal and referred the prospective bidder to paragraph 9 of the Bid submittal Form. The required attachments included a scaled floorplan "showing present configurations with measurements," net rentable square footage calculations using floorplan measurements, and a preliminary site layout. The Invitation to Bid stated that Respondent reserved the right to waive any minor informalities or technicality and seek clarification" of bids received, when such is in the best interest of the state. Responding to Respondent's newspaper advertisement and direct-mail solicitation for bids, James W. Boyle, who is a real estate broker active in leasing and property management, requested from Ms. Treml an Invitation to Bid and Bid Submittal Form. Mr. Boyle regularly reviews announcements of forthcoming leasing activity by state agencies. If he is aware of a building that appears to meet the agency's requirements, he contacts the building's owner or manager and informs him or her that he may have a prospective tenant. After receiving the bid materials for Lease No. 590:1944, Mr. Boyle contacted Kathryn Doyle, who is the leasing manager of Petitioner, and learned that Petitioner could accommodate Respondent's space needs for the term sought in the Lakeview 436 office building. Mr. Boyle assisted Ms. Doyle in the preparation of the Bid Submittal Form for Petitioner. In his first conversation with Ms. Doyle, Mr. Boyle ascertained that Petitioner's building carried a Semoran Boulevard street address and in fact had direct access to Semoran Boulevard. Petitioner's building lies on the east side of Semoran Boulevard, which serves as the eastern boundary of the geographic area described in the Invitation to Bid. Three bids were submitted in response to the subject Invitation to Bid. When they were opened, Ms. Treml and her supervisor, George A. Smith, determined that bids of Petitioner and a third party were nonresponsive because their office buildings were outside the geographic area specified in the Invitation to Bid. These bids were not considered further. Mr. Boyle had previously represented the owners of the FARE building several months earlier in a bid for Lease No. 590:1895. The Invitation to Bid in that case, which was issued by Respondent and named Ms. Treml as the contact person, provided that the proposed office space must be located within the following boundaries: Beginning at the intersection of US 17-92 and Colonial Drive, then west on Colonial Drive to the intersection of Edgewater Drive, then north on Edgewater Drive to the intersection of Kennedy Blvd. . ., then east on Kennedy Blvd. . . . to the intersection of US 17-92, then south on US 17- 92 to the point of beginning." Although Mr. Boyle's client was not awarded Lease NO. 590:1895 for reasons not relevant here, his client's bid, as well as the bid of another unsuccessful bidder owning a building on the east side of the highway serving as the east boundary of the geographic area, were considered responsive and thus within the specified geographic area. Ms. Treml interpreted the boundary description in Lease NO. 590:1944 differently from the boundary description in Lease NO. 590:1895. The description for Lease NO. 590:1895 defined the boundaries by "beginning" at a certain intersection, then proceeding "on" a highway, and so on. The description for Lease NO. 590:1944 defined the boundaries by identifying landmarks "on the north," then the "east," and so on. At the time of assisting in the preparation of Petitioner's bid, Mr. Boyle was also aware of an Invitation to Bid issued by Respondent for Lease NO. 590:1875. In this case, Respondent specified office space "in the following area of Brevard County, Florida: Beginning at the intersection of U.S. Highway 1 and State Road 50, then West on SR-50 to the intersection of 1-95, then North on 1-95 to the intersection of SR-406 . . . then East on SR-406 to the intersection of U.S. 1, then South on U.S. 1 to the point of beginning." In the case of Lease NO. 590:1875, the bid contact person, Lynn Mobley, issued a clarification letter stating that any building located on either side of the boundary road with an address on the boundary road would be considered to be within the boundary. Ms. Mobley and her supervisor, Ernest Wilson, who are Respondent's District 7 Facilities Services Assistant Manager and Manager, respectively, have consistently advised potential bidders that a building located on a boundary highway is included in the geographic area even though it would be outside the area if the dividing line were the centerline of the highway. Mary Goodman, Chief, Bureau of Property Management of the Department of General Services, testified that, in the course of her review of leasing activities by various state agencies, she has historically guided agencies that, if a building abuts a boundary highway but is not, strictly speaking, within it, the agency "could waive that as a minor technicality and consider it a responsive bid." Neither Mr. Boyle, Ms. Doyle, or any other representative of Petitioner spoke to Ms. Goodman prior to submitting the subject bid proposal. Ms. Treml customarily waives minor irregularities in bid submittals. However, she does not treat the location of a building outside the geographic area as a minor irregularity. To do so would be unfair to owners of other buildings outside the geographic area who took the geographic description at its face value and never submitted bids. Ms. Doyle received the bid materials from Mr. Boyle after the Pre-Bid Conference had taken place. However, Mr. Boyle elected not to attend the Pre- Bid Conference at which Ms. Treml explained, among other things, her interpretation of the specific geographic area. He chose not to attend because he felt that he would not learn anything relevant at the conference, which was attended by a representative of Intervenor. Neither Mr. Boyle, Ms. Doyle, or any other representative of Petitioner contacted Ms. Treml prior to submitting Petitioner's bid. Mr. Boyle, whose compensation in this case is entirely contingent upon a successful bid, estimates that he spent about 20 hours working on Petitioner's bid. Ms. Doyle estimates that she spent about 40 hours working on the bid. Petitioner also spent $800 in obtaining an "as-built" drawing of the space that accompanied its proposal. By letter dated February 22, 1988, Respondent notified the bidders of its decision to award the lease contract to Intervenor. Petitioner filed a notice of intent to protest the award by letter dated February 24, 1988. Ms. Treml met Mr. Boyle and Ms. Doyle on March 1, 1988, and cited the location of Petitioner's building as the only reason for the determination of nonresponsiveness. The attempt at mediation having failed, Petitioner filed a formal written protest of the award by letter dated March 3, 1988. Petitioner attached to its bid proposal an "as-built" drawing. Although drawn to scale, the drawing did not bear the measurements of the then- present interior tenant improvements, mostly walls, nor did it disclose on its face any calculations showing how the rentable area was computed from the gross area. These omissions were due to Mr. Boyle's advice to Ms. Doyle that such information would be unnecessary in this case. The omissions from Petitioner's "as-built" drawing were rendered less critical by the fact that Respondent would have the right under the lease to require the landlord, at its expense, to remove the present improvements and re- configure the space to Respondent's demands. However, one purpose of the floorplan is to show where the space is located within the building. Another purpose is to verify the rentable area calculation by showing the measurements of items, such as restrooms, that should not be included in the rentable area for which Respondent is charged rent. The drawing is supposed to show the rentable area computation. Additionally, even though Respondent could insist on a total renovation of the premises, Respondent might wish to evaluate whether it could use a portion of the existing space in order to reduce the possibility of construction delays. George A. Smith, the Senior Management Analyst for Respondent who reviewed Ms. Treml's determination of nonresponsiveness prior to the award of the subject lease, testified that the deficiencies in Petitioner's "as-built" drawing were not a "minor irregularity."
The Issue The issue in this case is whether the bid of Corporate Interiors, Inc. (Petitioner) is the lowest responsive bid which was received by the Pinellas County School Board (Petitioner) for stacking polypropylene and upholstered chairs for the New District Administration Building.
Findings Of Fact On or about February 27, 1990, the Respondent sought competitive bids for stacking polypropylene and upholstered chairs for the New District Administration Building. In response thereto, Respondent timely received four bids, two of which were determined to be responsive. The bid opening occurred on April 17, 1990, and Petitioner was determined to have submitted the lowest bid. However, the Petitioner's bid did not include an amount for sales tax, and on that basis alone, the Respondent indicated its intent to award this contract to another responsible bidders. There is no dispute that the Respondent does not pay sales tax on transactions involving the acquisition of furnishings for the Pinellas County School System. Nevertheless, Section 9.2.2 of the bid specifications erroneously stated that this contract would not be exempt from sales tax. The Respondent admitted at hearing that under Section 5.3.1 of its bid instructions, it should hake waived the Petitioner's failure to include sales tax in the bib amount since this is inapplicable to this acquisition. The Respondent, in effect, concedes error in its previous notice of intent to award this contract to another bidder, and does not contest the Petitioner's claim that it submitted the lowest responsive bid for stacking chairs.
Recommendation Based on the foregoing, it is recommended that the Respondent enter a Final Order awarding the contract for stacking chairs for the New District Administration Building to Petitioner. DONE AND ENTERED this 8th day of June, 1990, in Tallahassee, Leon County, Florida. DONALD D. CONN 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 8th day of June, 1990. APPENDIX DOAH CASE NO. 90-2982 BID Petitioner filed a letter, but no proposed findings of fact upon which a ruling could be made. Rulings on Respondent's Proposed Findings of Fact: Adopted in Finding 1. Adopted in Finding 3. Adopted in Finding 1. 4-6. Adopted in part in Finding 2, but otherwise Rejected as unnecessary. Adopted in Finding 3. Adopted in part in Finding 2, but otherwise Rejected as unnecessary. COPIES FURNISHED: Allen D. Zimmerman, President Corporate Interiors, Inc. 1090 Kapp Drive Clearwater, FL 34625 Bruce P. Taylor, Esquire P. O. Box 4688 Clearwater, FL 34618-4688 Dr. Scott N. Rose Superintendent P. O. Box 4688 Clearwater, FL 34618
The Issue Whether Respondent's rejection of all bids for Lease No. 540:0920 was improper.
Findings Of Fact The Respondent published an invitation to bid seeking to lease approximately 9,907 net square feet of office space in Broward County (the Lease). There was no evidence of any irregularities in the preparation or the issuance of the invitation. The Petitioner, whose responsive bid was rejected by Respondent, timely and properly brought its protest and has standing to protest the Respondent's rejection of all bids for the Lease. Lynn Mobley was the statewide lease manager of the Respondent and had the responsibility to generally oversee the preparation of the bid package and the bid opening procedures. Barbara Lollie was a staff member under the supervision of Ms. Mobley and was in charge of the preparation of the request for bid proposals. Ms. Mobley's supervisor was a Ms. Barron. Five bids in response to the invitation to bid were duly received by Respondent. An evaluation committee chaired by Don Walker, Respondent's area administrator, was appointed to inspect the proposed properties and to evaluate the bids. The evaluation committee ranked the bids in the following order of preference: 1/ 1. In-Rel ($499,141.80) 2. Taft ($519,090.30) 3. Donlon ($541,119.90) 4. Procacci ($618,373.30) 5. Stirlingwood ($761,906.30) Thereafter the responses to the invitation were forwarded to Ms. Mobley's office for evaluation. Ms. Mobley's staff determined that the top two bids, those of In-Rel and Taft, were non-responsive. 2/ Ms. Mobley, who did not actively participate in the evaluation of the proposals, then advised Mr. Walker of that determination and advised him of two alternatives: to award the bid to the lowest responsive bidder or to reject all bids and re-advertise. The evaluation committee chaired by Mr. Walker had wanted to lease the property to either In-Rel or Taft. Mr. Walker told Ms. Mobley that he wanted to reject all bids and to re-advertise. Pursuant to the request for bids promulgated by the Respondent and Rule 13M-1.015, Florida Administrative Code, the Respondent reserved the right to reject any and all bid proposals for the Lease. The request for proposal of bids specifically stated: The Department reserves the right to reject any and all bid proposals for reasons which shall include but not be limited to the agency's budgetary constraints; waive any minor informality or technicality in bids, to accept that bid deemed to be the lowest and in the best interest of the State, and if necessary, to reinstate procedures for soliciting competitive proposals. Following the telephone conversation between Mr. Walker and Ms. Mobley, Ms. Mobley sent a letter dated March 23, 1992, to all bidders which notified each bidder that all bids had been rejected. That letter did not state the reasons for the rejection of all bids. Mr. Walker sent a memo on March 20, 1992, to Ms. Lollie recommending the rejection of all bids. Although this memo predated the rejection letter and was subsequently made available to Ms. Mobley, the memo was received by Ms. Mobley's office after the rejection letter had been sent. The memo gave no explication of Mr. Walker's reasons for wanting to reject all bids. The Department of General Services (DGS) published lease rate guidelines for Broward County to inform the Respondent of maximum acceptable lease rates. The purpose of these DGS guidelines was to advise the Respondent that proposed lease rates above the guidelines would be summarily rejected. At the time of obtaining bid proposals, the DGS lease rate guidelines were the only established guidelines which could be consulted by the Respondent. At no time did the Respondent calculate a pre-bid estimate of what the Respondent felt was an acceptable range of lease rates in order to be used in determining whether lease rates were too high. The Petitioner's bid, along with the other responsive bidders, were within the DGS lease rate guidelines. Mr. Walker made the request for re-bid after he learned that the bids of Taft and In-Rel were non-responsive. Mr. Walker's decision to recommend the rejection of all bids was based only on the information that the two top choices of the evaluation committee had been found to be non-responsive and on his desire to reopen the bid process in the hope of attracting more bidders. 3/ Mr. Walker wanted to modify the specifications of the invitation to bid in two regards. First, he wanted to amend the specifications to permit the leased premises to be in more than one building. Second, he wanted the geographical boundaries in which the leased premises could be located to be expanded to hopefully attract additional bidders. Mr. Walker believed that a re-bid would provide a wider range of buildings at comparable prices from which to choose and would give him an opportunity to make changes to the bid specifications. His decision to recommend the rejection of all bids was not based on a lease bid analysis or on lease rate guidelines. The recommendation was not dictated by budgetary considerations, but by his desire to shop the bid. It was Mr. Walker's understanding that at the end of his telephone conversation with Ms. Mobley that the decision to reject all bids had been made and that all bids would be rejected. Ms. Mobley made the decision to reject all bids pursuant to the recommendation of Mr. Walker after obtaining input from Ms. Lollie and Ms. Barron. Although Ms. Mobley had Ms. Lollie's analysis of the five bids, that analysis made no comparison of the rates contained in the bids with existing lease rates or the DGS guidelines. Ms. Mobley did not consult the DGS lease rate guidelines, although she was generally familiar with those guidelines, and she was unaware of any budgetary constraints that would dictate the rejection of all bids. When Ms. Mobley decided to reject all bids, she did not compare the bid proposals to the existing lease rates paid by the Respondent for leased office space in Broward County. The decision to reject all bids was not made on the advice of an attorney. Although Ms. Mobley testified that all bids on the Lease were rejected solely for price considerations, the evidence presented established that the decision to reject all bids was not based on price, price guidelines, or the Respondent's budgeting constraints. The greater weight of the evidence establishes that Ms. Mobley rejected all bids because that was the action recommended by Mr. Walker. Respondent's invitation to bid did not contain any lease rate guidelines that would notify prospective bidders of a lease rate ceiling. There was no significant difference in the lease rates between the Taft and In-Rel bids that were favored but non-responsive and the third lowest bidder, the Donlon bid, which was responsive but rejected. Mr. Walker conceded that the Donlon bid was not rejected because of price considerations. Mr. Walker was of the opinion that the Donlon bid was at an acceptable price. He did not testify that the Petitioner's bid was at an unacceptable price and he did not testify as to what, other than the DGS guidelines, would be the maximum acceptable price. The DGS Lease Guidelines applicable to the bid for the Lease were as follows: A full service Lease (including electricity) -- $17.84 a square foot. 4/ Lease without electricity -- $15.18 a square foot. The present rate for the existing lease which was to be replaced by the Lease was $16.60 a square foot; this rate did not include electricity. If electricity was factored in at $2.50 a square foot, which was a factor regularly used by DGS, the present lease rate would be approximately $18.00 a square foot. The three responsive bids to the invitation were lower than the present lease after factoring in electricity. Ms. Goodman was of the opinion that Respondent's budget with respect to the Lease would be based on lease rates already in existence and consequently, that the responsive bids received and rejected were within the budget guidelines. Respondent offered no evidence to controvert that opinion. There was no evidence that the decision to reject all bids was based on economic considerations. All lease rates submitted by the rejected bidders were under the ceiling set by the DGS lease guidelines of $17.84. The Respondent acted arbitrarily when it rejected all bids.
Recommendation Based upon the foregoing findings of fact and conclusion of law, it is hereby recommended that the Respondent accept and evaluate the responsive bids submitted for the Lease and determine the proper recipient for an award of the Lease. RECOMMENDED this 29th day of June, 1992, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of June, 1992.
Findings Of Fact On February 28, 1990, Respondent issued an invitation to bid (ITB) on a construction project referred to as Florida Atlantic University Modulars. The ITB required a base bid and bids on five alternates to the base project. Each bidder was instructed that it must bid on the base project and on each alternate for its bid proposal to be considered responsive. On March 19, 1990, Addendum 1 to the ITB was issued to all prospective bidders. This was an informational addendum and advised the date, time, and location of the posting of the award recommendation. Addendum 1 was not required to be returned by the bidder as a part of the response to the ITB. On March 21, 1990, Addendum 2 to the ITB was issued to all prospective bidders. This was also an informational addendum and advised as to a non- mandatory, pre-bid conference to be held March 27, 1990. Addendum 2 was not required to be returned by the bidder as a part of the response to the ITB. On March 30, 1990, Addendum 3 to the ITB was issued to all prospective bidders. This addendum advised that the date and time for the bid opening had been changed to April 9, 1990, at 2:00 p.m. Addendum 3 also contained modifications, explanations and corrections to the original drawings and specifications which impacted the cost and scope of the project. Immediately above the signature line on the cover page of Addendum 3 was the following: This document must be returned in it's [sic] entirety with the bid. Please sign below to verify that you have read and understand all the changes. Item 2 on page ADD-1 of Addendum 3 required each bidder to submit its per unit price structure with its response to the ITB and provided, in pertinent part, as follows: ... The unit price shall not be included in Base Bid. Submit a separate sheet with bid package. The following instructions are given in Paragraph 1(c) of the Instructions to Bidder: NO ERASURES ARE PERMITTED. If a correction is necessary, draw a single line through the entered figure and enter the corrected figure above it. Corrections must be initialed by the person signing the bid. Any illegible entries, pencil bids or corrections not initialed will not be tabulated. The instructions are repeated in Paragraph 1 of the General Conditions of the ITB: EXECUTION OF BID: ... No erasures are permitted. If a correction is necessary, draw a single line through the entered figure and enter the corrected figure above it. Corrections must be initialed by the person signing the bid. Any illegible entries, pencil bids, or corrections not initialed will not be tabulated. The following is contained as part of the Instructions to Bidder: Failure to complete, sign, seal and return the required documents will result in rejection of your bid. Any questions should be directed to Susan Kuzenka, (305) 761-7460, Purchasing Department, Broward Community College. (Emphasis in the original.) Paragraph 8 of the General Conditions portion of the bid package provided, in pertinent part, as follows: 8. AWARDS. As the best interest of Broward Community College may require, the right is reserved to reject any and all bids and to waive any irregularity in bids received ... On April 9, 1990, Petitioner submitted a bid to Respondent in response to the ITB. Petitioner had received the complete bid package, including all instructions and addenda to the bid package. At the pre-bid conference held March 27, 1990, an employee of Respondent emphasized to the attendees that it was necessary for the bidders to return Addendum 3 in its entirety. Petitioner did not attend the non-mandatory, pre-bid conference. The base bid submitted by Petitioner was $1,085,790.00. The base bid of Double E Construction Co., the next low bidder and the bidder to whom Respondent intends to award the contract, was $1,113,300.00. Petitioner's bid for each of the alternates was lower than that of Double E Construction Co. Petitioner failed to return the entire Addendum 3 as instructed. On page four of the bid package Petitioner acknowledged that it had received Addendum 3, and it signed and returned the cover sheet to Addendum 3 under the language quoted in the foregoing Paragraph 4. Respondent considered this an important requirement because it wanted to prevent a bidder from later claiming that it had not received Addendum 3 or that it had received information different than that contained in Addendum 3. Petitioner made a correction to its bid for Alternate Number 3 found on page 5 of 13 of Petitioner's bid. Petitioner's bid for this alternate was $88,000. In the space for the written amount of the bid, Petitioner's president inserted by hand the words "Eighty-eight Thousand". In the space for the numerical insertion of the bid he initially wrote the sum $125,000 (which was the amount of Petitioner's bid for Alternate 4). He struck through the figure $125,000 and wrote above the stricken figure the figure $88,000. He did not initial his change. Respondent has never accepted changes to price quotations which were not initialed because it is concerned that uninitialed corrections on bids may result in challenges to the integrity of the bid process and may expose its staff to charges of collusion from a disgruntled bidder. Pioneer did not include a unit price structure in its bid as required by Addendum 3. The unit price structure is an informational item that is not separately considered by Respondent to determine the lowest bidder on this project. On April 6, 1990, Petitioner's estimator on this bid telephoned Susan Kuzenka regarding the unit price structure sheet to inquire as to the format that should be followed in submitting the unit price structure. Ms. Kuzenka is named in the Instructions to Bidder as the person in Respondent's purchasing department to whom questions about the bid process should be directed. Petitioner's estimator was told that the unit prices would be required to be submitted by the successful bidder at the pre-construction meeting after the bids were opened, but that the unit price structure need not be submitted with the bid. Petitioner's president verified this information on April 9, 1990, prior to the bid opening, during a telephone conference with the project engineer employed by Respondent for this project. In reliance on the information that was supplied by Respondent's agents, Petitioner did not submit its unit price structure sheet with its bid. Following its examination of all bids, the bid of Petitioner was disqualified on three grounds. The first reason cited by Respondent was that Petitioner failed to return the entire Addendum (3) as required. The second reason was that Petitioner did not initial a correction to a quoted price figure. The third reason was that Petitioner did not include the unit price structure as required in Addendum (3). Petitioner thereafter timely protested its disqualification and the intended award of the contract to Double E Construction Co. Petitioner contends that the reasons cited by Respondent for its disqualification are minor irregularities that should be waived by Respondent. Additionally, Petitioner contends that the third reason should not disqualify it because Petitioner acted in reliance upon the instructions of Respondent's agents in not submitting the unit price structure along with its bid package. This proceeding followed.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent, Broward Community College, enter a final order which denies the bid protest of Petitioner, Pioneer Contracting, Inc. DONE AND ENTERED this 29th day of June, 1990, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of June, 1990. APPENDIX TO THE RECOMMENDED ORDER The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioners. The proposed findings of fact in paragraphs 1, 2. 6 and 7 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 3 are rejected as being subordinate to the findings made in paragraph 10. The proposed findings of fact in paragraph 4 are adopted in part by the Recommended Order. The proposed findings in the last sentence of paragraph 4 are rejected as being unnecessary to the conclusions reached because of the clear instructions contained in Addendum 3. The proposed findings of fact in paragraph 5 are adopted in part by the Recommended Order. The proposed findings in the last two sentences of paragraph 5 are supported by the evidence, but are not adopted as findings of fact because they are unnecessary to the conclusions reached. All proposed findings of fact submitted on behalf of the Respondent are adopted in material part. Copies furnished: Eric L. Dauber, Esquire Beyer & Dauber Suite 5300 2101 W. Commercial Boulevard Ft. Lauderdale, Florida 33309 James D. Camp III, Counsel Broward Community College Fort Lauderdale Center 225 East Las Olas Blvd. Fort Lauderdale, Florida 33301 Janet Rickenbacker Director of Purchasing Broward Community College Fort Lauderdale Center 225 East Las Olas Blvd. Fort Lauderdale, Florida 33301
Findings Of Fact On or about June 3, 1987, DOT advertised that it would receive bids on State Project No. 97870-334, etc. in Dade, Broward and Palm Beach Counties to improve portions of the Florida Turnpike. On June 24, 1987, bids were received by DOT from Gilbert, State Paving and Archer Western Contractors. The apparent low bidder at bid opening on June 24, 1987, was Gilbert and State Paving was apparent second low bidder. DOT was informally advised by John Beck, an attorney representing State Paving, that Gilbert's bid was believed to be unbalanced and the appropriate officials referred the issue to the DOT Bureau of Estimates to look into the low bid to see if it was unbalanced to the detriment of the State. Review of the Gilbert bid began with an internal analysis of the bid prices in comparison to the DOT Estimate of the Work. All bid prices above or below a certain percent of the engineer's estimate of costs were prepared in a computer printout and those items were checked by the consultants on the project. Basically, the major items in the project, which comprises some 400 bid items, were broken down to 10 groupings and the bids for each item in these groups was prepared for the three bidders and tabulated in Exhibit 2. The DOT Technical Committee reviewed the bids and concluded there was no unbalancing in Gilbert's bid which was detrimental to the State. This recommendation was approved by the Awards Committee which had also been furnished the information in Exhibit 2 by the consulting engineer for the project. Based upon this information, the Awards Committee concluded that the awards should go to Gilbert as no unbalancing detrimental to the State was found. Specification made a part of all DOT bid proposals provide that DOT may reject an unbalanced bid. As a matter of policy, DOT only rejects unbalanced bids deemed contrary to the interests of the State. Bids may be unbalanced in numerous ways. One significant method is known as front loading where the bidder submits a high bid for the work to be done at the beginning of the project such as clearing and grubbing and low bids for the work done later in the project. If successful in getting the award, this bidder would have excess profits on the clearing and grubbing which could draw interest while the less profitable later work was being done. Another variant is to study the plans and specifications to see if the quantities listed in the bid proposal are accurately reflected in the plans and specifications. If not, those items for which the bid proposal shows more than the plans and specifications reasonably required can be bid low, and for those items by which the bid proposal shows less than actually will be required can be bid high. Since the contractor is paid by the units used, those excess units at a higher price would result in more profit for the contractor yet allow him to submit an overall lower bid. For example, if the bid proposal contains two similar items for which the request for proposal estimates 100 each will be required, and the bidder concludes that only 50 will be required at Site A and 150 at Site B, he submits a low bid for Site A and a high bid for Site B. If the fair price for these units is $10 each, and the bidder bids $5 per unit for Site A or $500, and $15 for Site B or $1500, the total bid price is $2000, but if the bidder only installs 50 at Site A he would be paid $250 and install $150 at Site B for which he would be paid $2250. His total compensation would be $2500. In competitively bid contracts, such as the instant project, contractors modify their prices by taking a calculated risk that certain items bid on will not need to be accomplished and submit a nominal bid of $1 or 1 cent for such an item. By definition, such a bid is unbalanced, but if the item so bid has to be provided, the contractor has to provide this service at the bid price. The only evidence submitted by Petitioner tending to show Gilbert's bid was unbalanced to the detriment of the State was testimony, objected to and sustained, that the plans and specifications showed more of certain units would be needed than the estimated quantities on the bid proposal, which constituted the basis for the bids submitted. Such evidence constitutes a challenge to the bid specifications and is untimely. Gilbert's witness who prepared the bid submitted by Gilbert adequately explained the basis for bids submitted by Gilbert on the challenged items. The document entitled "This is Not an Addendum," clearly states on its face that "an addendum may follow containing the following information." No bids are solicited thereby and for no item contained thereon is the State obligated to contract. This document was provided all bidders before bids were open and no unfair advantage to anyone or detriment to the State was shown. In a project containing some 400 bid items, many modifications of the contract during construction is required to cover unforeseen circumstances that arise. While it would be better to get competitive bids on every bit of work done on this project, in this imperfect world unforeseen items will appear. The document complained of attempts to alert the bidders to some anticipated work not foreseen when the bid proposal was prepared, but it is not a part of the bid solicitation.
Findings Of Fact This case concerns what is-called a "Turnkey Lease". The program was developed by the State of Florida in 1971. It encompasses a situation where by agencies seeking space for their operations may, after a specific need is determined that cannot be filled by existing adequate space, solicit competitive bids from developers for the provision of land and the construction of a building thereon sufficient to-meet the agency's needs, for lease specifically to the agency requesting it. The Bureau of Property Management within DGS was given the initial responsibility to develop the guidelines, promulgate the rules, and seek statutory authority for such a program. The Bureau's current role is to work with agencies requesting this program. The agency certifies the need to the Bureau in addition to the fact that there is no available existing space present. The Bureau then determines agency needs and gives the agency the authority to solicit the bids for the turnkey project. Once the bids are then received, evaluated, and a recommendation for an award is forwarded by the agency to DGS, DGS reviews the supporting documents required by the provision of the Florida Administrative Code and either concurs or does not concur in the recommendation. If DGS concurs, the submitting agency is notified and is permitted to then secure the lease. Once the lease has been entered into; it is then sent back to DGS for review and approval as to the conditions; and thereafter the plans and specifications for the building are also referred to DGS for review and approval as to the quality and adequacy as well as code compliance. Section 255.249 and Section 255.25, Florida Statutes, set forth the requirements for soliciting and awarding bids for lease space in an amount in excess of 2,500 square feet. This provision requires that an award of this nature be made to the lowest and best bidder, and DCS utilizes that standard in evaluating and determining whether or not it will concur with an agency's recommendation. In the instant case, DHRS advertised for bids for the construction of office space in Palatka, Florida for its District III facilities. Before seeking to solicit bids, the District III staff conducted a search for other possible existing space within a five mile radius of the downtown area and located no adequate facilities. Thereafter, a Certification of Need was processed for a solicitation of proposals and approval was granted by DGS to follow through with the solicitation. A preproposal conference was advertised and held on October 14, 1983, and after project review by those present at the conference, bid opening date was set for November 22, 1983. Thirty-two bid packages were distributed and twelve bidders submitted proposals. The public bid opening was held as scheduled at 2:00 p.m., on November 22, 1983, in Palatka, Florida by Robert E. Litza, Facilities Services Coordinator for DHRS District III. Of the bids submitted by the twelve bidders, the lowest hid was rejected because of the failure of the bidder to comply with the requirements of the bid package. Of the remaining eleven bids, the four lowest were evaluated with the understanding that additional higher bids would be evaluated if the four lowest bids were found to be unacceptable. Among the four bids considered were bids of Chuck Bundschu, Inc., Kenneth R. McGurn, one of the Intervenors (McGurn submitted five prices scheduled for his bid and of these, only one was considered); Elizabethan, Petitioner herein; and TSU. Only three bids are pertinent to the discussion here. They are #8-C (McGurn); #11 (Elizabethan); and #12 (TSU). In pertinent particulars, these bids provided as to rental costs: 8-C 11 12 1st yr $14.00/$220,808 $8.95/$ 61,916.10 S 7.16/$ 49,532.88 2nd yr 14.00/ 220,8088 8.95/ 141,159.40 7.35/ 115,924.20 3rd yr 14.00/ 220,808 8.95/ 141,159.40 7.62/ 120,182.64 4th yr 14.00/ 220,808 8.95/ 141,159.40 8.08/ 127,437.76 5th yr 14.00/ 220,808 8.95/ 141,159.40 8.33/ 131,380.76 6th vr 14.00/ 220,808 8.95/ 141,159.40 8.59/ 135,481.48 7th yr 14.00/ 220,808 8.95/ 141,159.40 8.86/ 139,739.92 8th yr 14.00/ 220,808 8.95/ 141,159.40 9.19/ 144,944.68 9th yr 14.00/ 220,808 8.95/ 141,159.40 9.58/ 151,095.76 10th yr 14.00/ 220,808 8.95/ 141,159.40 10.09/ 159,139.48 Renewal Option 1st yr3.00/47,316 9.93/ 156,615.96 10.51/ 165,763.72 2nd yr3.00/47.316 9.93/ 156,615.96 10.99/ 173,334.28 3rd yr3.00/47.316 9.93/ 156,615.96 11.48/ 181,062.56 4th yr3.00/47.316 9.93/ 156,615.96 11.99/ 189,106.28 5th yr3.00/47.316 9.93/ 156,615.96 12.51/ 197,307.72 Total Basic Overall Lease 1-15 yrs $1,971,500 $2,115,430.50 $2,181,434.12 Average Sq.Ft. for 15 yrs $8.60 $9.20 $9.58 A recommendation by the evaluation committee which met at DHRS District III, that McGurn's bid be selected, was forwarded to DGS in Tallahassee through the Director of DHRS's General Services in Tallahassee on December 22, 1983. The terms of the successful bid and the reasons for its being considered lowest and best are discussed below. The successful bid for the lease in question, lease number 590:8030, upon completion of the committee's evaluation was also evaluated by Ms. Goodman in the Bureau of Property Management of DGS. She also considered the McGurn bid to be the lowest and best of the eleven non-disqualified bids. In that regard, not only Mr. McGurn's bid but all of the twelve bids received were considered and reviewed not only at the local level but at DHRS and DGS headquarters as well. In her evaluation of the proposal and the bids, Ms. Goodman considered the documentation submitted by DHRS. This included a letter of recommendation supported by a synopsis of all proposals, the advertisement for bids, and any information pertinent to the site selection process. In determining the McGurn's bid was the lowest as to cost of all the bids, Ms. Goodman compared the average rate per square foot per year for each. This did not take into con- sideration pro-ration of costs per year, but strictly the average over the fifteen year probable term of the lease (ten years basic plus five year option). According to Ms. Goodman, this same method of calculating cost has been used in every lease involving a turnkey situation and in fact in every lease since 1958 - as long as she has been with DGS. This particular method, admittedly, is not set forth in any rule promulgated by DGS. However, the agencies are instructed by DGS to advertise and bidders to bid on an average square foot basis, the basis utilized by Ms. Goodman and her staff in analyzing the bids submitted. In that regard, the request for proposals does not, itself, indicate how the calculation of lowest cost would be made by DHRS and DGS but it does tell prospective bidders what information to submit. This procedure has been followed exclusively in situations like this for may years and many of the bidders here have bid before using this same system. All bidders are considered on the same footing in an evaluation. They are notified of what information will be considered along with that of all the other bidders. Further, anyone who inquires as to the basis for evaluation will be given a straight and complete answer as to the method to be used. Petitioner contends that McGurn's bid does not conform to either the normal bidding procedure followed by contractors in this type of procurement over the past years or to the normal bidding procedures adopted by Respondent, DHRS. It urges that the questioned bid is non-responsive and front-end loaded to the detriment of DHRS. With regard to the front-end loading objection, Mr. Taylor, testifying for Petitioner, attempted to indicate by graphic evidence that Elizabethan's bid, which he claims is not front-end loaded, is cheaper to the State than that of McGurn. Due to the large rental cost of the McGurn bid in the opening years of the lease, the State would have to borrow money to make the large rental payments; the interest cost of which, when added to the $3.00 cost in the option years, raises the cost considerably and makes the bid not the lowest. Though Mr. Taylor testified to this he failed to produce any independent evidence to support it. In addition, Taylor urges, under the McGurn schedule, McGurn would recoup his entire construction debt (approximately $423.00 plus interest) in the first four years of the lease: Comparing the two bids, it appears that the State would pay McGurn approximately $494,500.00 more than it would pay Elizabethan for the same period during the first seven years of the lease. Considering this, it is Taylor's belief that McGurn's profit after the fourth year is excessive. He contends also that when, after the tenth year, McGurn's rental rate drops to $3.00 per square foot for the remaining five years which constitutes the option period of the lease, the State could not afford to leave the low figure and as a result, the ten year lease is converted to a l5 year lease which is unresponsive. Further, the $3.00 figure for the last years, which would ostensibly show a loss to McGurn, is misleading in that there would be sufficient income from the advance profit garnered in years 5 to 10, when invested, to cover the soft costs and more in these later years. Admitting that because of its involvement in other turnkey projects in Florida, Elizabethan is aware of the State policy on cost evaluation, Taylor contends that while his bid does not violate State policy, McGurn's bid does because it would be fiscally irresponsible for the State to pay so much up front. This conclusion is his opinion, however, and not supported by any independent evidence. Both expert witnesses, Respondents Scott and Perry, who testified for the Intervenor, TSU, agree that the present value of money should be considered in evaluating rental costs. Their major point of difference is in the percentage of discount rate to be applied. Dr. Perry urges that use of the 10% rate mandated by the U. S. Government in its procurements of this nature. Dr. Scott, on the other hand, considers this to be too high and urges a rate in the area of 3% be used. The significance of this is that at the lower of the range spread, McGurn's bid is lowest. At the higher end, TSU's bid is lowest. From 5.7% up to below 6%, Petitioner's bid is lowest. Whichever would be appropriate, the State has not adopted the present value of money methodology and the policy followed by the State is not to consider that methodology in analyzing costs. State policy is to use only the average rental methodology. There is, in addition, no prohibition against front- end loaded bids encompassed within this policy. By the same token, there is nothing in the bid package issued to all prospective bidders that in any way stipulates the method of computing lease costs or prohibits from loaded bids. DGS zone rates, criteria stipulating the maximum agencies can send on rent without approval by DGS, are not part of the bid package and do not constitute a factor in determining whether a bid is conforming or not. These zone rates may be waived by DGS at the time the proposed award is submitted for DGS approval. In practice, within the memory of Joseph Lambert, HRS' Administrator of Facilities Services, who administers the Department's leasing program, he cannot recall DGS ever denying a DHRS request for waiver of the maximum zone rate in any case where it was pertinent. In this case, since the lease payments at-least in the second through tenth years-of the McGurn bid exceed the zone limits, the award would have to be approved by the Governor and Cabinet in addition to DGS. It has not yet been placed on the Cabinet agenda because of the protests filed. As was stated before, there are no rules governing the evaluation of bids for leases of this nature. Oral instructions given to each agency, when applied here, reveal that the McGurn bid, as was seen above, has an average cost of $8.86 per square foot per year. TSU's bid costs $9.58 per square foot per year, and Elizabethan's bid costs $9.29 per square foot per year. These same calculations are followed on all turnkey and non- turnkey leases in the State. The reason the State uses this process instead of the present value of money methodology is that it is easy. DGS statistics indicate that at least 50% of the landlords in the approximately $32,000,000 worth of leases presently existing with the State are "Mom and Pop" landlords. These people are not normally trained lease evaluators. By using the straight average rental rate method, there are no arbitrary variables. It has always worked because people can understand it and all agencies which lease property in the State follow this procedure. In the opinion of Ms. Goodman, the costs involved in utilizing the present value of money methodology would far outweigh the paper savings to be gained, notwithstanding the testimony of Dr. Perry to the contrary. With regard to the option issue, it was the position of DGS in reviewing the proposals that the very low $3.00 lease cost per square foot in the last five years (the option period) did not make the McGurn bid unresponsive. There were no limits imposed upon the bidders except that a five year option to a ten year lease be included. Were it not there, the bid would be unresponsive. DGS would issue approval for a ten year lease with a five year option but not a fifteen year lease. Ms. Goodman cannot recall a situation in which an option was not exercised by it if the need for the space continued though there have been some instances where option costs have been renegotiated.
Recommendation Based on the foregoing, it is, therefore; RECOMMENDED THAT DHRS License Number 590:8030 be awarded to Kenneth R. McGurn. RECOMMENDED this 5th day of September, 1984, in Tallahassee, Leon County, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkwav Tallahassee, Florida 32301 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1984. COPIES FURNISHED: David Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood 8Oulevard Tallahassee, Florida 32301 Morgan Staines, Esquire 2204 East Fourth Street Santa Ana, California 92705 Thomas D. Watry, Esquire 1200 Carnegie Building 133 Carnegie Way Atlanta, Georgia 30303 Steven W. Huss, Esquire Department of Health and Rehabilitative Services 1317 Winewood boulevard Tallahassee, Florida 32301 Ronald W. Thomas, Executive Director Department of General Services 115 Larson Building Tallahassee, Florida 32301 Steven W. Huss Assistant General Counsel Department of Health and Rehabilitative Services 1317 Winewood Blvd. Tallahassee, Florida 32301 Gary J. Anton, Esquire P.O. Box 1019 Tallahassee, Florida 32302 Harden King, Agency Clerk Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Suite 406 Tallahassee, Florida 32301
Findings Of Fact This case concerns what is called a "turnkey lease." The program was developed by the State of Florida in 1971. It encompasses a situation whereby agencies seeking space for their operation may, after a specific need is determined that cannot be filled by existing adequate space, solicit competitive bids from developers for the provision of land and the construction of a building there sufficient to meet the agency's needs, for lease specifically to the agency requesting it. The Bureau of Property Management within DGS was given the initial responsibility to develop the guidelines, promulgate the rules, and seek statutory authority for such a program. The Bureau's current role is to work with agencies requesting this program. The agency certifies the need to the Bureau, in addition to the fact that there is no available existing space present. The Bureau then determines agency needs and gives the agency the authority to solicit the bids for the turnkey project. Once the bids have been solicited and the preproposal conferences have been held, the bids are then received, evaluated, and a recommendation for an award is forwarded by the agency to the Department of General Services. DGS reviews the supporting documents required by the provisions of the Florida Administrative Code and either concurs or does not concur in the recommendation. If DGS concurs, the submitting agency is notified and is permitted to then secure the lease. Once the lease has been entered into, it is then sent back to DGS for review and approval, as to the conditions, and thereafter the plans and specifications for the building are also referred to DGS for review and approval as to the quality and adequacy of the plans and specifications and code compliance. Section 255.249 and Section 255.25, Florida Statutes, sets forth the requirement for soliciting and awarding bids for lease space in an amount in excess of 2500 square feet. This provision requires that an award of this nature be made to the lowest and best bidder, and DGS subscribes to that standard in evaluating and determining whether or not it will concur with an agency's recommendation. In the instant case, DHRS advertised for bids for the construction of office space in Palatka, Florida for its District III facilities. Before seeking to solicit bids, District III staff conducted a search for other possible existing space within a five mile radius of the downtown area and located no adequate facilities. Thereafter, a certification of need was processed for a solicitation of proposals and approval was granted by DGS to follow through with the solicitation. A preproposal conference was advertised and held on October 14, 1983 and after review by those present at the conference, bid opening date was set for November 22, 1983. Thirty-two bid packages were distributed and twelve bidders submitted proposals. The public bid opening was held as scheduled at 2:00 P.M. on November 22, 1983, in Palatka, Florida by Robert E. Litza, Facilities Service Coordinator for DHRS District III. Of the bids submitted by the twelve bidders, the lowest bid was rejected because of the failure of the bidder to comply with the requirements of the bid package. Of the remaining eleven bids, the four lowest were evaluated with the understanding that additional high bids would be evaluated if the four lowest were found to be unacceptable. Among the four bids considered were bids of Chuck Bundschu, Inc.; Kenneth McGunn, the Intervenor (Mr. McGunn submitted five price schedules for his bid and of these only one was considered); Elizabethan Development, Inc.; and TSU. A recommendation by the evaluation committee which met at DHRS District III that Intervenor's bid be selected was forwarded to DGS in Tallahassee through the Director of DHRS's General Services in Tallahassee on December 22, 1983. The terms of the successful bid and the reasons for its being considered lowest and best are discussed below. The successful bid for the lease in question, lease number 590:8030, was, upon completion of the committee's evaluation, also evaluated by Mrs. Goodman in the Bureau of Property Management of DGS. She also considered the McGunn bid as the lowest and best of the eleven non-disqualified bids. In that regard, not only Mr. McGunn's bid but all of the twelve bids received were considered and reviewed not only at the local level but at DHRS and DGS Headquarters as well. In her evaluation of the proposal and the bids, Mrs. Goodman considered the documentation submitted by DHRS. This included a letter of recommendation supported by a synopsis of all proposals, the advertisements for bids, and any information pertinent to the site selection process. The letter from DHRS dated December 22, 1983, which recommended award of the lease to Mr. McGunn, included Mr. Litza's December 21, 1983 analysis and recommendation letter which, itself, was attached to McGunn's primary bid documents. Her analysis did not include a prior award recommendation and analysis from Mr. Litza, dated December 8, 1983. It also did not include the site plan, the floor plan for the proposed building, or a survey of the site, but these areas are considered to be within the discretion of the leasing agency. Their absence is not considered to be particularly significant. In her analysis, Mrs. Goodman found that Petitioner's bid was also responsive. However, comparing it with Mr. McGunn's bid, she and her staff found that the latter was the lowest bid submitted. The determing factor in her decision was cost. In determining that McGunn's bid was the lowest as to cost of all bids, Mrs. Goodman compared the average rate per square foot per year for each. This did not take into consideration proration of costs per year, but strictly the average over the fifteen years of the term of the lease (10 year basic plus 5 year option) . According to Mrs. Goodman, this same method of calculating cost has been used in every lease involving a turnkey situation and in fact in every lease since 1958 - as long as she has been with DGS. This particular method, admittedly, is not set forth in any rule promulgated by DGS. However, the agencies are instructed by DGS to advertise and bidders to bid on an average square foot basis, the basis utilized by Mrs. Goodman and her staff in analyzing the bids submitted. In that regard, the request for proposals does not, itself, indicate how the calculation of lowest cost would be made by DHRS and DGS but it does tell prospective bidders what information to submit. This procedure has been followed exclusively in situations like this for many years and many of the bidders have bid before using this same system. While Mrs. Goodman is not certain whether TSU has ever bid before, using this system, she does not consider it to be unfair because all bidders are considered on the same footing in an evaluation. They are notified of what information to submit and if they do so, their information will be considered along with all other bidders. Further, anyone who inquires as to the basis for evaluation will be given a straight and complete answer as to the method to be used. In the instant case, DHRS followed procedure for solicitation and evaluation utilized in the past and DGS followed its own policy in evaluating the submissions. In short, the primary consideration for DGS is the price factor and all other factors are considered to be within the expertise of the requesting agency. In Mrs. Goodman's opinion, based on the fact that she worked with the Florida Legislature on the development of the controlling statute, and helped develop the existing rule within DGS, that was the intent of the Legislature. Consequently since the statute requires award to the lowest and best bidder, it can be said that in this case the term "lowest" falls within the purview of both DHRS and DGS but "best" is solely within the purview of DHRS. Therefore, utilizing the lowest and best criteria and accepting the fact that the lowest bid may not be the best bid, the determination of "non-best" should be based on the reasonable "end objective" of the agency and need not be based on a criterion which is set forth in the bid proposal. In other words, it is not necessary for the agency to set forth the manner of evaluation it will use or the factors it will consider, according to Mrs. Goodman. With regard to the bid and evaluation committee process, Mr. Litza, the facilities manager for DHRS in Gainesville, was involved in putting together the bid package along with Mr. George Smith from Tallahassee, Litza's predecessor in the job in Gainesville. He worked with Mr. Smith in order to take advantage of Smith's experience in evaluating bids for leases. So far as he knew, the bid package contained minimum standards for all parts of the bid, and the package was, in fact, approved by officials in Tallahassee before being released. While no particular factors were identified to prospective bidders as being significant, Mr. Litza did conduct a bid conference for them prior to the date the bid was due and was available to answer any questions that prospective bidders might have. He did not receive any questions regarding the significance of any particular factor from any bidder. The bids were advertised and when received, were opened and read properly in accordance with the terms of the solicitation. When the bids were received and opened, it was seen that Mr. McGunn had submitted five different bids for the same project. Litza had not been confronted with this situation before and asked Mr. Smith what to do about it. Mr. Smith's reply was to put all five McGunn bids in with the rest and extract the lowest five of all bids. When this was done, Mr. McGunn was shown to have submitted two of the lowest five bids. In determining which were the lowest five bids, Mr. Litza utilized the average cost per square foot formula utilizing therein the entire 15,772 square feet authorized for the project. Once the five lowest bids were determined, Mr. Litza selected an evaluation committee made up of local Palatka DHRS supervisors except for the fiscal member, Mr. Foust, Mrs. Shinholster, Litza's secretary and Litza himself. He gave each of the members a score sheet with point values for each area. Each member filled out the form independently. Though he gave very little briefing to the evaluation committee, he admits that he did, in advance, tell each member that Mr. McGunn was the lowest bidder and should be awarded the highest points for criteria number 1, which related to cost. There were several irregularities in Mr. Litza's processing of the evaluation committee's results. For example, on the evaluation of the file conducted by member Sheryl Dollar, regarding criteria number 2, which relates to the conformity of space offered to the specific requirements contained in the invitation to bid (with a weight of 25 points), Mr. Litza admitted he lowered Mrs. Dollar's point award in that area from 35 to 25 without first checking with her to insure that his action would meet with her approval. While this is irregular, it is of little or no consequence since - the maximum number of points that could be given for that particular item was 25 and Mr. Litza's actions did not reduce that member's award to less than the maximum allowable. He contends that his action was based on what he considered to be a mistake on her part. In another apparent irregularity, Mr. Litza prepared a recommendation letter based on his and the other committee members' evaluation of the files to DHRS Headquarters in Tallahassee on December 8, 1983. In that letter, be indicated that McGunn would provide gas heat for the proposed building for free. Though McGunn had not specifically stated this, he implied it from the energy features paragraph in the Intervenor's bid. On the other hand, the bid by TSU contained an express comment offering to pay the utility charges. This specific provision was overlooked and omitted from the evaluation and report to Tallahassee by Litza, who contends that this omission was merely an oversight. There are other discrepancies as well. In his testimony, Mr. Litza indicated Mr. McGunn proposed to build one building but his letter of December 8th and that of December 21, 1984, both reflect two buildings. Here again, Mr. Litza explains this as the result of his being confused. Nonetheless, this erroneous information was referred to Mrs. Goodman at DGS. This is significant in that at the evaluation committee meeting, when the forms were given out, several of the members expressed a preference for a two-building complex. After the award, Mr. Litza secured agreement from McGunn to build two buildings. Mr. Litza admits that much of this was done in an attempt to insure that McGunn, as the low bidder, got the award. Mr. Litza equated the lowest bid with the best and had Petitioner been the low bidder, he contends he would have done the same thing. In most areas, he would not, however, have given Petitioner's four-building concept a high score because of the increased heat and air requirements of four buildings. Mr. Litza also downgraded Petitioner on that bid criteria which relates to the proximity of offered space to the clients to be served because Petitioner's site, he contends, was too close to the clients to be served. In this case, a housing project for low income families which make up much of the clientele to be served by DHRS, was located across the street from the proposed site offered by the Petitioner. Mr. Litza contends that he was thinking of the potential damage to the building because of increased activity by virtue of the facility being so close. There were other questionable areas in Mr. Litza's testimony. For example, he testified that though Petitioner provided 15 more parking spaces than Intervenor, this would result in mud being tracked in from the adjacent dirt road 200 feet away in greater quantities than in Intervenor's proposal. He also considered positively that the Intervenor's proposed site was closer to a restaurant than that of the Petitioner. Though it was recommended by DHRS Headquarters in Tallahassee that only two of the committee members be from the Palatka office, Mr. Litza disregarded that advice because, he contends, there was a morale factor in that office and the people assigned there wanted to have a part in this decision. Because of this, he allowed Ms. Stouffenberg to put five extra members of her staff on the committee. Nonetheless, the evaluation committee serves only in an advisory capacity. Its recommendation is no more than an advisory opinion. The ultimate decision as to which of the bidders should be awarded the contract is made at DHRS Headquarters in Tallahassee. Ms. Shinholster, a Clerk IV in the DHRS Gainesville office, who works as a secretary to Mr. Litza and several others, was advised she would be on the committee for the evaluation at the same time she was given the bid file. She did not get an opportunity to meet with other committee members to talk about the standards to be used, nor was she given any standards by which to evaluate the files. All she was told by Mr. Litza was that McGunn was the lowest bidder. She cannot explain how she accorded points on her evaluation sheets except that she gave the low bidder the highest number of points. Mr. George Smith, a Senior Analyst with DHRS in Tallahassee, relied on Mr. Litza's input when he made his recommendation to his superiors that the award should be made to McGunn. He also formulated his own opinion, based on his own analysis of the bids. He resolved any dispute regarding cost in favor of Mr. McGunn on the basis of the average rental, and regarding space, in favor of McGunn on the basis of the number of buildings. Dr. Perry, an economist with the University of North Florida, testified to the Federal Government's policy regarding the desirability of using the present value of money methodology and the determination of an acceptable discount rate or index in calculating the actual cost of the bids. Both experts, Dr. Perry and Dr. Scott, who testified for DGS, agree that the present value methodology is valid and presents a more accurate analysis of cost than the average rental cost methodology which does not utilize this theory. The major difference between the two was primarily in the percentage to be utilized in applying the discount rate. Whereas Dr. Perry adopted the Federal policy and suggested a 10 percent discount rate, Dr. Scott testified that a more viable percentage rate in November, 1983, at the time the award was to be made, would have been 3.3 percent. If the 10 percent rate were used, then the Petitioner's bid would be the lowest of all submitted. On the other hand, if the 3.3 percent rate were used, Intervenor's bid would be the lowest. If a different discount rate, that of 5.7 percent were to he used, the bid of Elizabethan Development Corporation would be low. It is at about the 6 percent point and above that Petitioner's bid becomes the lowest. Nonetheless, the State has not adopted the present value of money theory and the policy followed by the State is not to consider that methodology in analyzing costs. State policy is to use only the average rental methodology. There are no written instructions (rules) on evaluating bids for leases of this nature. Oral instructions given by DGS to each agency are that the average rate per square foot is to be computed using, if the square footage is constant, for each year of the lease, the basic square footage requested, multiplied by the rental rate proposed for each year of the basic lease, divided by the number of years. If the square footage is not constant in every year of the lease, evaluators are directed to apply the rate per square foot proposed in each year to the square footage to be utilized in that year, total up the annual rentals, total up the square footage involved, and divide to arrive at the average rate per square foot per year. Utilizing one or the other of those two methods in evaluating both the McGunn and the TSU bids, it becomes clear that the McGunn bid results in an average of $8.86 cost per square foot per year and the TSU bid an average of $9.58 per square foot per year. Recalculation of DHRS' evaluation by DGS showed the DHRS' figures as stated above were correctly arrived at. This procedure is followed on all turnkey and non-turnkey leases in the State of Florida. The reason the State uses this process instead of the present value of money process is because it is easy. DGS statistics indicate that most landlords in the approximately $32,000,000 worth of leases presently existing with the State are "Mom and Pop" landlords. These people are not normally trained lease evaluators. By using the straight average rental rate method, there are no arbitrary variables. It has always worked because people can understand it and all agencies which lease property in the State of Florida follow this procedure. Also, this procedure does not require computer-based calculations, and it does not require economists to work with it. Both latter reasons are amplifications of the first. In Mrs. Goodman's estimation, if the present value of money system were to be adopted, her division would have to hire at least two $30,000 per year economists and buy an in-house computer to operate the system. This additional cost, she believes, would far outweigh the paper savings to be realized by utilizing the present value of money system. As of the hearing date, considering all the factors, in Mrs. Goodman's opinion, DGS would nonetheless still recommend Mr. McGunn's bid as the lowest and best bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore RECOMMENDED that DHRS lease Number 590:8030 be awarded to Kenneth R. McGunn. RECOMMENDED this 5th day of September, 1984, in Tallahassee, Leon County, Florida. ARNOLD H. POLLOCK 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 5th day of September, 1984. COPIES FURNISHED: Donald E. Holmes, Esquire William E. Townsend, Jr., Esquire Post Office Drawer D Palatka, Florida 32078-0019 James A. Sawyer, Jr., Esquire District III Legal Counsel Department of Health and Rehabilitative Services 1000 Northeast 16th Avenue Gainesville, Florida 32609 Stephen J. Kubik, Esquire Department of General Services Room 452, Larson Building Tallahassee, Florida 32301 H. Allen Poll, Esquire 112 South Main Street Gainesville, Florida 32601 Linda C. McGurn, Esquire 1717 Northeast 9th Avenue Gainesville, Florida 32301 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1321 Winewood Boulevard Tallahassee, Florida 32301 Ronald W. Thomas, Executive Director Department of General Services 115 Larson Building Tallahassee, Florida 32301
The Issue This is a bid challenge case in which the primary issue is whether the Petitioner's bid is responsive to the RFP.
Findings Of Fact Some basic background facts The Department issued Request for Proposals No. 700:0652, Office Space (the "RFP"). The RFP requested bidders to submit proposals to provide 7,750 square feet of office space (+/- 3 percent) in Broward County to be leased by the Department for a probation and parole office. Under the RFP terms the space had to be available by June 1, 1993. Proposals had to be filed with the Department by January 5, 1993. In-Rel Acquisitions, Inc., and Janc, Inc., submitted bids. Pursuant to an evaluation of the bids conducted by the Department, In- Rel Acquisitions, Inc., was given a contingent award of the lease on March 31, 1993, as the vendor with the lowest price and the overall highest evaluation score. The contingent award letter of March 31, 1993, read as follows in pertinent part: It is the intent of the Department of Corrections to award the above referenced bid to In-Rel Acquisitions, Inc., as the vendor with the lowest bid price and the overall highest evaluation score. The award to In-Rel Acquisitions, Inc., is contingent upon: (a) obtaining the necessary zoning approval to operate a probation and parole office at the bid premises by May 6, 1993, and (b) the Department obtaining sufficient assurances from the Resolution Trust Corporation that the bid premises will not be taken over by the RTC and the Department's leasehold interest will not be affected. On May 18, 1993, the Department issued a letter awarding the subject lease to Janc, Inc., because the Department was of the view that In-Rel Acquisitions, Inc., had not met the conditions of the contingent award of March 31, 1993. The award letter of May 18, 1993, read as follows, in pertinent part: This letter is to inform you that the Department of Corrections has determined that the award of the lease for the above referenced bid is hereby made to Janc, Inc. The bid from In-Rel Acquisitions, Inc. has been rejected because it has not met either of the conditions stipulated on the March 31st award letter, and the property has not been properly maintained under the existing lease agreement. Both the contingent award letter of March 31, 1993, and the award letter of May 18, 1993, contained "boiler-plate" language advising the addressee of the basic details of the written protest process. In-Rel Acquisitions, Inc., filed a timely protest of the award to Janc, Inc. Facts about the zoning situation The award of the lease to In-Rel Acquisitions, Inc., was made contingent because the property was not properly zoned to support a probation and parole office for the Department. At the time of soliciting bids on the subject project, the Department was currently leasing the space proposed by In-Rel Acquisitions, Inc., and had done so for almost five years. Shortly after the deadline for the submission of bids, the Department was notified that it was in violation of the Plantation City Code because the office was not properly zoned, and the Department was subject to fines if it did not obtain proper zoning or leave the premises by June 1. The fine was at the rate of $200.00 per day. In-Rel Acquisitions, Inc., did not obtain necessary zoning approval by May 6, 1993. First, the zoning approval passed by the City of Plantation limited the hours of operation of the probation office. As approved by the City of Plantation, the Department can only operate its probation office Monday through Friday from 8:00 a.m. to 5:30 p.m., plus one evening a week until 7:00 p.m. These time limits do not satisfy the contingency placed in the March 31, 1993, award because the Department cannot operate a probation and parole office within these limited hours. The Department has 14,000 probationers in Broward County under its supervision. The caseload puts a severe strain on the caseworkers making it essential that they have flexible hours to get their job done. The caseload also requires working evenings and weekends. For example, some probation officers must maintain evening hours to test offenders for drugs. Although the officers could make the offenders visit the Department's office during the day, this would jeopardize the employment status of many offenders. Therefore, the Department needs flexible evening hours to do the drug testing. One of the major functions of the probation officer is to help rehabilitate the offender. That means that the Department must do what it can to help the offender stay employed. In addition, the probation officers need evening and weekend hours to do their paperwork, including preparing weekly reporting schedules, and recording their contacts. The officers also need evening hours to receive monetary payments due from offenders, meet with offenders who must report in person into the office each month, and counsel offenders in the office. Under the prior lease with In-Rel Acquisitions, Inc., the Department had operated and held evening hours at a minimum of three nights per week. This included both probation officers and offenders appearing at the office during the evenings. The RFP specifically notified bidders that there would be evening hours. Section B(14) of the RFP states: Staff of both sexes will be required to work in this facility during both daylight and evening hours. An environment in which staff can expect to be safe is essential. Section D(11) of the General Provisions of the subject RFP reads as follows: Federal, state, county, and local laws, ordinances, rules, and regulations that in any manner affect the items covered herein apply. Lack of knowledge by the bidder will in no way be a cause for relief from responsibility. The records of the City of Plantation meetings show that the May 5, 1993, vote was not final. A mandatory second reading of the zoning change took place on May 12, 1993, and the minutes were approved on May 19, 1993, and June 2, 1993, with respect to the first and second reading. Even if the zoning change with its limited hours had been sufficient to meet the terms of the contingent award, the limited zoning approval was not received before May 6, 1993; and therefore, the mandatory second reading of May 12, 1993, caused the limited zoning approval to be untimely. Finally, the limited and untimely zoning change as approved on May 5, 1993, was itself contingent on satisfying all concerns of the Landscape Architect. Facts regarding the RTC assurances The second award contingency required In-Rel Acquisitions, Inc., to provide the Department with sufficient assurances from the Resolution Trust Corporation (RTC) that the bid premises would not be taken over by the RTC and that the Department's leasehold interest would not be affected. The property submitted by In-Rel Acquisitions, Inc., was in litigation; the RTC as successor mortgagee, had filed or secured a Notice of Lis Pendens, an Amended Complaint, a Summary Final Foreclosure Judgment, and a Notice of Sale. The RTC has an interest in the property offered by In-Rel Acquisitions, Inc. Paragraph 1(E) of the Summary Final Foreclosure Judgment provides that the Summary Final Foreclosure Judgment shall eliminate the interest of anyone that has acquired an interest since the filing of the Lis Pendens, including the Department's leasehold interest if it were to enter into a lease on the property. The property bid by In-Rel Acquisitions, Inc., was subject to a second mortgage. The record does not reflect that the first mortgagee and the second mortgagee entered into any type of written agreement not to disturb the leasehold interest of the Department. By letter dated May 11, 1993, an attorney for the RTC responded to the Department's request for assurances. The May 11, 1993, letter included the following: Pursuant to your request of yesterday, I am writing to belatedly confirm the April 19, 1993 telephone conference had you, Robert Gellman of Real Estate Recovery, Inc., and I. This telephone conversation was had to provide the Department of Corrections (the "Department") with the assurances requested from the RTC in the Department's March 31, 1993 letter of intent to award the subject least [sic] to In Rel Acquisitions, Inc. During this discussion you expressed the concern of the Department that the RTC intended to take title to the property and would then utilize special powers and privileges to dispossess the Department. If that were to be the case, you indicated that the Department would want an assurance that it would receive 90-days' notice before it could be dispossessed. (You indicated that 90-days is how long it would take to complete the bid process that would have to precede the Department's move.) Robert Gellman indicated that he was pursing [sic] numerous resolutions to the pending litigation, some of which might involve the RTC's taking title to the property and others which might not. Mr. Gellman assured you, however, that the RTC perceived it to be in its own best interest, and in the interest of any subsequent landlord, that the Department be kept happy and its tenancy undisturbed. Mr. Gellman also explained that he could not agree to anything at the time, as the appropriate committee approval had to be secured, but that he anticipated no problem in obtaining the necessary approvals of any writing consistent with our discussions once those writings were prepared. (I believe at the time we contemplated a written lease and a written assurance letter from the appropriate RTC official.) You indicated that your concerns had been satisfied and that these assurances were sufficient to satisfy the Department. The three of us discussed that it would not make sense to begin drafting anything at that time as the issues regarding the property's zoning still had to be cleared up and our efforts might otherwise "be all for not." Accordingly, it was mutually decided that we would wait to see the outcome of the May 5, 1993 hearing on the zoning issue before proceeding further. In the interim you indicated that you would be providing us with a list of the specific items of tenant improvements that your local officials expected to have made to the property. (We received this list on May 3, 1993.) On May 5, 1993 the Plantation City Council approved In-Rel Acquisition Inc.'s, request for a rezoning of its property and for a "special use" condition by a 4-0 vote, thus effectively resolving the zoning issue. Yesterday you and I spoke on this issue and discussed the situation. I indicated that the RTC is now in a position to provide you with written assurance that it has no intention of dispossessing the Department or interfering with its lease tenancy (either under the old or the new lease), and that the Department's leasehold interest would not be affected by the RTC taking title to the property (if it ever does). I asked and you indicated that this would give you what you needed and everything would be fine. In addition, I indicated that once the lease by and between the Department and In Rel is finalized, the RTC, if it still owns the note and mortgage, would be able to approve same. In light of the foregoing your call to me this morning, indicating that the Department had decided to withdraw its award to In Rel Acquisitions, Inc. and make the award to "Viloci" (phonetic(?), the next ranked bidder. During this discussion you indicated that Viloci's legal counsel had stated that the RTC would never be able to provide the Department with the requisite assurances. It is unfair for you to make decisions based in whole or in part on any statements made by Viloci's counsel regarding what the RTC can and cannot do without giving us an opportunity to respond -- especially in light of your indications on April 19th and again yesterday that the Department was satisfied with the RTC. The record reflects that the "Notice of Sale" failed to contain language providing that the property would be sold subject to any leasehold interest, either previously or subsequently acquired.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that a Final Order be issued in this case dismissing the Petition of In-Rel Acquisitions, Inc., and awarding the subject lease to the Intervenor, Janc, Inc. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 17th day of September 1993. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of September 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3438BID The following are the Hearing Officer's specific rulings on all proposed findings of fact submitted by all parties. Proposed Findings of Fact submitted by Petitioner Paragraph 1: First three sentences accepted in substance. Fourth sentence rejected as constituting primarily irrelevant or subordinate details. Last sentence reject as contrary to the greater weight of the evidence to the extent it is intended to imply that the zoning change obtained was sufficient. Paragraph 2 and 3: Rejected as contrary to the greater weight of the evidence. Paragraphs 4 and 5: Accepted in substance. Paragraph 6: The first two sentences are rejected as irrelevant or as subordinate and unnecessary details. Last sentence rejected as irrelevant and also as contrary to the greater weight of the evidence and as suggesting implications not warranted by the evidence. Paragraph 7: Rejected because it goes further than the evidence and suggests inferences not warranted by the evidence. Messrs. Gellman and Guerra told Mr. Ferst that they did not expect that the Department would have any problems with RTC, but the statements of Messrs. Gellman and Guerra stopped short of making any guarantees or of binding the RTC. Paragraph 8: Rejected as contrary to the greater weight of the evidence. Paragraph 9: Accepted in substance, with the deletion of the words "in ignoring the foregoing." Paragraph 10: Rejected as constituting a summary of a party's argument or statement of position, rather than a proposed finding of fact. Paragraph 11: First sentence is accepted in substance. Second sentence is accepted as literally true, but as also substantially irrelevant because during most of the original five-year lease there was no issue about hours of operation because there was no effort at restriction of hours of operation. The last sentence is rejected as not supported by persuasive competent substantial evidence. Paragraph 12: The first two sentences are rejected as constituting a summary of a party's argument or statement of position, rather than a proposed finding of fact. The third and fourth sentences are rejected because they go further than the evidence and suggest inferences not warranted by the evidence. As noted above, Messrs. Gellman and Guerra told Mr. Ferst that they did not expect that the Department would have any problems with RTC, but the statements of Messrs. Gellman and Guerra stopped short of making any guarantees or of binding the RTC. Paragraph 13: Rejected as constituting argument or proposed conclusions of law, rather than proposed findings of fact. Paragraph 14: First two sentences accepted in substance. Last sentence rejected as constituting argument or proposed conclusions of law, rather than proposed findings of fact. Paragraph 15: Rejected as constituting argument or proposed conclusions of law, rather than proposed findings of fact. Paragraph 16: It is accepted that Messrs. Gellman and Guerra made statements as to what they expected the RTC's position to be, but, as noted several times above, the statements of Messrs. Gellman and Guerra stopped short of making any guarantees or of binding the RTC. Proposed findings submitted by Respondent Paragraphs 1, 2, 3, 4, 5, 6, 7, 8 and 9: Accepted. Paragraph 10: Rejected as constituting subordinate and unnecessary restatement of a party's position. Paragraphs 11, 12 and 13: Accepted in substance. Paragraph 14: Rejected as repetitious. Paragraphs 15, 16 and 17: Accepted. Paragraph 18: First sentence is accepted. The second sentence is rejected as constituting argument, rather than proposed findings of fact. Paragraphs 19, 20, 21, 22, 23, 24, 25, 26, 27 and 28: Accepted in substance. Paragraph 29: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraph 30: Accepted. Paragraph 31 and 32: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraphs 33 and 34: Accepted in substance. Paragraphs 35 and 36: Rejected as irrelevant or as subordinate and unnecessary details. Paragraph 37: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraphs 38, 39, 40 and 41: Rejected as irrelevant or as subordinate and unnecessary details. Paragraphs 42, 43, 44 and 45: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraphs 46, 47, 48 and 49: Accepted in substance. Paragraph 50: Accepted. Paragraph 51: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraph 52: First sentence rejected as subordinate and unnecessary details. Second sentence rejected as repetitious. Paragraphs 53, 54 and 55: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraph 56: First sentence accepted in substance. Second sentence rejected as constituting argument, rather than proposed findings of fact. Paragraph 57: Accepted in substance. Paragraph 58: Rejected as irrelevant or as subordinate and unnecessary details. Paragraphs 59, 60, 61, 62, 63 and 64: Rejected as primarily constituting argument or proposed legal conclusion, rather than proposed findings of fact. Proposed findings submitted by Intervenor Although there are some differences in the numerical sequence, the vast majority of the proposed findings of fact submitted by the Intervenor are identical to those submitted by the Respondent. It would serve no useful purpose to repeat the rulings on all of those findings. The following rulings address the few proposed findings submitted by the Intervenor that are different from the ones submitted by the Respondent. Paragraph 11: Rejected as constituting subordinate and unnecessary restatement of a party's position. Paragraph 30: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraph 37: Rejected as irrelevant or as subordinate and unnecessary details. Paragraph 44: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraph 54: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraphs 55, 56, 57, 58, 59 and 60: Accepted in substance. Paragraph 61: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. Paragraphs 62, 63 and 64: Accepted in substance. Paragraphs 65, 66 and 67: Rejected as constituting argument or proposed legal conclusion, rather than proposed findings of fact. COPIES FURNISHED: Michael S. Riley, Esquire 200 East Las Olas Boulevard, Suite 1400 Fort Lauderdale, Florida 33301 Steven S. Ferst, Esquire Assistant General Counsel Department of Corrections 2601 Blair Stone Road Tallahassee, Florida 32399-2500 Joseph J. Villacci, Esquire 315 Northeast Third Avenue, Suite 200 Fort Lauderdale, Florida 33301 Harry K. Singletary, Jr., Secretary Department of Corrections 2601 Blair Stone Road Tallahassee, Florida 32399-2500 Louis A. Vargas, General Counsel Department of Corrections 2601 Blair Stone Road Tallahassee, Florida 32399-2500
Findings Of Fact The Department issued an invitation to bid (ITB) and solicited bids for district-wide miscellaneous property management maintenance services pursuant to ITB-DOT-94-95-4004. Kemp Services, Inc. (Kemp), submitted the lowest bid for the subject ITB. Petitioner, Urban Group, Inc., submitted the second lowest bid for the subject ITB. Section 1.1 of the ITB provided: Invitation The State of Florida Department of Transport- ation requests written bids from qualified firms to MAINTAIN RIGHT-OF-WAY STRUCTURES AND VACANT LOTS BY PROVIDING CLEAN-UP SERVICES, LAWN SERVICES, LANDSCAPE SERVICES, SECURING OF BUILDINGS, AND OTHER MISCELLANEOUS HANDYMAN AND SKILLED LABOR SERVICES. ALSO PROVIDE SERVICES FOR SIGN REMOVAL FOR STRUCTURES ILLEGALLY ON THE DEPARTMENT'S RIGHT-OF-WAY OR ILLEGALLY ON PRIVATE PROPERTY IN THE FOLLOWING FIVE COUNTY AREA: BROWARD, MARTIN, PALM BEACH, ST. LUCIE AND INDIAN RIVER COUNTIES. For the purpose of this document, the term "bidder" means the prime Consultant acting for itself and those individuals, partnerships, firms, or corporations comprising the bidder's team by joint venture or subcontract. The term "bid package" means the complete response of the bidder to the Invitation To Bid, including properly completed forms and supporting documentation. [Emphasis in text.] The services were to be provided on an as-needed basis for the term of the agreement, two years. Section 1.7.1 of the ITB provided: Qualifications 1.7.1 Bidders must meet the following minimum qualifications: BIDDERS MUST HAVE AT LEAST TWO YEARS EXPERIENCE PROVIDING AT LEAST TWO (2) OF THE SIX SERVICES OUTLINED IN THE SCOPE OF SERVICES IN EXHIBIT "A". BIDDERS MUST HAVE BEEN IN CONTINUOUS BUSINESS FOR THE PAST TWO (2) YEARS AND COMPLETE FORM "F" WITH THE INFORMATION REQUESTED REGARDING WORK EXPERIENCE AND REFERENCES. ALL REFERENCES WILL BE CHECKED. FAILURE TO PROVIDE FORM "F" AND THE WORK EXPERIENCE REQUESTED WILL CONSTITUTE A NON- RESPONSIVE BID. [Emphasis in text.] Section 1.7.4 of the ITB provided: Qualifications of Key Personnel Those individuals who will be directly involved in the project must have demonstrated experience in the areas delineated in the scope of work. Individuals whose qualifications are presented will be committed to the project for its duration unless otherwise accepted by the Department's Contract Manager. Where State of Florida registration or certification is deemed appropriate, a copy of the registration or certificate should be included in the bid package. Section 1.7.5 of the ITB provided: Authorizations and Licenses The Consultant must be authorized to do business in the State of Florida. Such authorization and/or licenses should be obtained by the bid due date and time, but in any case, will be required prior to award of the contract. For corporate authorization, contact: Florida Department of State Division of Corporations The Capitol Building Tallahassee, Florida 32399 (904)487-6052 Other than the provisions above, no other licensure or authorization to do business was required by the ITB. Section 1.8.2 of the ITB provided: Responsiveness of Bids All bids must be in writing. A responsive bid is an offer to perform the scope of services called for in this Invitation to Bid. Bids found to be non-responsive shall not be considered. Bids may be rejected if found to be irregular or not in conformance with the requirements and instructions herein contained. A bid may be found to be irregular or non-responsive by reasons, including, but not limited to, failure to utilize or complete prescribed forms, conditional bids, incomplete bids, indefinite or ambiguous bids, improper undated or unsealed signatures (where applicable). Section 1.8.4 of the ITB provided: Other Conditions Other conditions which may cause rejection of bids include evidence of collusion among bidders, obvious lack of experience or expertise to perform the required work, or failure to perform or meet financial obligations on previous contracts, or in the event an individual, firm, partnership, or corporation is on the United States Comptroller General's List of Ineligible Contractors for Federally Financed or Assisted Projects. Bids will be rejected if not delivered or received on or before the date and time specified as the due date for submission. Section 1.8.5 of the ITB provided: Waivers The Department may waive minor informalities or irregularities in bids received where such is merely a matter of form and not substance, and the correction or waiver of which is not prejudicial to other bidders. Minor irregular- ities are defined as those that will not have an adverse effect on the Department's interest and will not affect the price of the Bids by giving a bidder an advantage or benefit not enjoyed by other bidders. Section 1.18.1 of the ITB provided: Award of the Contract The Department intends to award a contract to the responsible and responsive bidder who bids the lowest cost as identified in Form "C", Bid Blank, attached hereto and made a part hereof. The ITB did not specify a minimum number of employees, vehicles or hours of service for a bidder to be deemed responsible or responsive. At all times material to this case, Kemp has been in continuous business for the past two (2) years, and completed form "F" with the information requested regarding work experience and references. The Department's agent, Mr. Gentile, checked with two of the references listed by Kemp to verify information relative to this bid requirement. At all times material to this case, Kemp had at least two years experience providing at least two (2) of the six services outlined in the scope of services. The Department's agent, Mr. Gentile, checked with two of the references listed by Kemp to verify information relative to this bid requirement. While Mr. Gentile was authorized to check with all references listed by Kemp, the failure to do so does not discount the information obtained from the sources that were checked. Kemp had an appropriate occupational license to perform work in the tricounty area, but did not have occupational licenses with the City of Hollywood or Broward County. At all times material to this case, Kemp maintained a warehouse to secure the equipment to be used such as lawnmowers, trimmers, and cleaning supplies/equipment. After the bid protest was filed, the Department verified that Kemp had used the warehouse as it claimed. No evidence to the contrary was presented. The mailing address Kemp listed on the first page of its bid response was 8637 S. Sutton Drive, Miramar, Florida. Mr. Faluade resides at that address. He listed that address for mail purposes. The business address for Kemp listed on the bid response was 6200 Johnson Street, Miramar, Florida. This address is a store-front facility with limited office equipment and furniture. Kemp maintains an office at this location but stores its equipment elsewhere as noted above. Kemp was the lowest responsive, responsible bid for ITB-DOT-94-95- 4004.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Transportation enter a final order dismissing Petitioner's challenge to the award of ITB-DOT-94-95-4004 to Kemp Services, Inc. DONE AND RECOMMENDED this 14th day of February, 1995, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of February, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-5967 Rulings on the proposed findings of fact submitted by the Petitioner: Paragraphs 1 through 4, 6, and 8 are accepted. With regard to paragraphs 5, 7, and 16 noting that the additional emphasis is not in the text and that the citations are incomplete (and perhaps misleading), they are accepted. Paragraph 9 is rejected as contrary to the weight of credible evidence. Paragraph 10 is rejected as contrary to the weight of credible evidence. Paragraph 11 is rejected as incomplete, and therefore, misleading. Corporate documents may have been filed on that date, however, the weight of the credible evidence established that Kemp had been in business the requisite amount of time. Paragraph 12 is rejected as incomplete, and therefore, misleading. The business conducted by the Kemp personnel continued regardless of the business entity structure that was used. Paragraph 13 is rejected as contrary to the weight of credible evidence. Paragraph 14 is rejected as contrary to the weight of credible evidence or irrelevant. Paragraph 15 is rejected as contrary to the weight of credible evidence. Paragraph 16 is rejected as contrary to the weight of credible evidence. Moreover, no credible evidence was presented to establish that Kemp did not provide services as described in the ITB or that it was not in business the requisite time. Paragraph 17 is rejected as incomplete, and therefore, misleading. The mailing address listed by Kemp was a residential address. Paragraph 18 is rejected as irrelevant. Paragraph 19 is rejected as contrary to the weight of credible evidence. Paragraph 20 is rejected as irrelevant. Kemp probably does not have a Leon County occupational license either. It did have an appropriate occupational license at all times material to this case. Rulings on the proposed findings of fact submitted by the Respondent: 1. Paragraphs 1 through 29 are accepted. COPIES FURNISHED: Thomas H. Duffy Assistant General Counsel Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0450 Mitchell B. Polay Mark H. Klein 750 S.E. Third Avenue Suite 205 Fort Lauderdale, Florida 33316 Thornton J. Williams General Counsel Department of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450
Findings Of Fact On or about December 29, 1981, the College solicited sealed bids for construction of alterations and additions to the Technical and Gymnasium Buildings located on its campus in Madison, Florida. In response, seven general contractors submitted bids. (P-1, P-2, P-3.) Bids were publicly opened on February 9, 1982. Griffin Construction, with a bid of $536,575, was the apparent low bidder; the second lowest bidder was Long Contractors, with a bid of $539,512. (Testimony of Griffin, Sims, Rutherford; P-3, P-4, P-5.) After the low bid was identified, Tom McClanahan, representing Long Contractors, asked that the subcontractor list accompanying the low bid be opened. Griffin Construction's subcontractor list was then opened. McClanahan asked if the license and charter numbers of the subcontractors were listed. 2/ Upon learning that these numbers were not included on Griffin Construction's subcontractor list, McClanahan protested. (Testimony of Sims, Rutherford, Griffin.) At its February 15, 1982, meeting, the College District Board of Trustees ("Board") rejected the low bid of Griffin Construction on the sole ground that the omission of subcontractor license and charter numbers constituted a failure to comply with the conditions of the bid documents. 3/ The Board then voted to award the contract to Long Contractors, the second lowest bidder, on the ground that it was the lowest bid conforming to the bid documents. In so doing, the Board followed the College president's recommendation--a recommendation based on his belief that the non-complying bid must be rejected, that it did not involve a matter of Board discretion. (Testimony of Sims, Rutherford, Griffin; Stipulation of Parties; P-41.) The bid specifications contain instructions to bidders requiring "each Bidder . . . [to] submit with his proposal a list of the subcontractors who will perform the work . . . as indicated by the `List of Subcontractors' form." (P-1, P-2.) The instructions further provide: The applicable subcontractor license registration or certification number must be noted on the bid opposite his name, and in the event that the subcontractor is a corporation, his State Corporate Charter number shall also be noted. If the subcontractor is an out of state firm, their Charter number with the Secretary of State to do business in the State of Florida should also be noted. The "Listing of Subcontractors" form provided with the specifications contains column headings for the names and addresses of the subcontractors but does not contain a separate heading for the requested license or corporate charter numbers. 4/ The form states that the subcontractor list "is an integral part of the bid." (P-1, P-2.) The bid instructions further require bidders to evaluate and determine the qualifications of their listed subcontractors. The bidder shall have determined to his own complete satisfaction that a listed subcontractor has been successfully engaged in this particular type of business for a reasonable length of time, has successfully completed installations comparable to that which is required by this agreement and is qualified both technically and financially to perform that pertinent phase of the work for which he is listed. (P-1, P-2.) The bid documents expressly reserve to the College the right "to reject any or all bids, and to waive informalities." (P-1 P-2.) No bidder correctly listed the required license and corporate charter numbers on its "Listing of Subcontractors" form. Griffin Construction. Griffin failed to include any license or corporate charter numbers. However, by subsequent letters dated February 9 and February 18, 1982, and at hearing, it supplied the required subcontractor license and charter numbers. Long Contractors. Long listed for its roofing subcontractor a sheet metal registration number, not the required roofing license number. [A sheet metal registration does not qualify a contractor for roofing work. See, 489.105, 489.113, Fla. Stat. (1981).] For its electrical subcontractor, Long omitted the prefix, "ER" from the listed number. For its plumbing subcontractor, Long listed a mechanical registration number instead of the required plumbing certification or registration number. [A mechanical registration does not qualify a contractor to perform plumbing work. See, 489.105, 489.113, supra.] Of the four areas requiring state licenses--roofing, heating and air conditioning, electrical, and plumbing--Long listed correctly only the registration number for its heating and air conditioning subcontractor. Long incorrectly listed No. FO6962 as the corporate number of Gandy Enterprises, its painting subcontractor. This is the number of a related corporation, Industrial Coatings, Inc. Remaining Bidders. Of the five other general contractors submitting bids, two-- Richard Walker Construction Company and GRC Contracting, Inc.--omitted all subcontractor license and charter numbers. The other three bidders failed to completely list all the required numbers. (Testimony of Rutherford; P-11, P-12, P-13, P-14, P-15, P-16, P-17, P-34, P-37, R-1, R-5.) The project architect testified that the submittal of incorrect or incomplete subcontractor license and charter numbers was a deficiency which a bidder should be allowed to cure after bid opening. But the failure to submit any required "number" was a deficiency which, in his opinion, could not be similarly corrected. He failed, however, to supply a reasonable basis for drawing such a distinction. Therefore, his opinion on this question is given little weight. 5/ (Testimony of Rutherford.) Subcontractor license and charter numbers are readily obtainable and can be verified by contacting the pertinent state agency--the Florida Department of Professional Regulation, Construction Industry Licensing Board, or the Florida Department of State. (Testimony of Griffin, Rutherford; P-32, P-33, P- 34, P-35, P-36, P-37.) The project architect, William Rutherford, routinely requires the listing of subcontractor license and charter numbers on bids for public construction projects. The main purpose it serves is that it would enable him to identify the listed contractor, since sometimes subcontractors have similar business names. Although if he was uncertain about the qualifications of a subcontractor, he would ordinarily question the general contractor. (Testimony of Rutherford.) Although Mr. Rutherford has customarily required the listing of subcontractor "numbers" on public projects, he has never made any use of those numbers in the past. (Testimony of Rutherford.) The general contractor who is awarded the contract is responsible to Mr. Rutherford and the College for construction of the project in accordance with the bid specifications. If, after bid opening, a listed subcontractor is unable to perform, Mr. Rutherford would ordinarily arrange for substitution of a new subcontractor acceptable to the general contractor and owner. (Testimony of Rutherford.) Griffin Construction's failure to list the license and charter numbers of its listed subcontractors, and its subsequent curing of that failure, did not affect the amount of its bid 6/ by giving it an advantage or benefit not enjoyed by other bidders. The bid omission did not allow Griffin Construction the opportunity to change any material element of its bid after bid opening. The inclusion or exclusion of subcontractor "numbers" at bid opening does not affect the ability of a contractors to obtain the required bond, the quality of bidding general contractors, the quality of listed subcontractors, the quality of work performed, or any material feature of the competitive bidding process. (Testimony of Griffin, Rutherford.)
Recommendation Based on the foregoing, it is RECOMMENDED: That the construction contract in question be awarded to Vick Griffin Construction Company, the lowest responsible bidder. DONE AND RECOMMENDED this 29th day of April, 1982, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of April, 1982.
