The Issue Whether the Palm Beach County School Board (hereinafter referred to as the "School Board") should sustain Petitioner's challenge to the preliminary determination made with respect to School Board Project No. 349661 to reject all bids submitted and to readvertise.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: In March of 1993, the School Board issued an Advertisement for Bid (hereinafter referred to as the "Advertisement") through which it solicited the submission of bids on a construction project (School Board Project No. 349661, which is hereinafter referred to as the "Project") involving HVAC replacement, reroofing and other renovation work at Jupiter High School's Building No. 2. The School Board indicated in the Advertisement, among other things, that it "reserv[ed] the right to waive informalities in the Bids, or to reject all Bids." The Advertisement, along with the other bid documents issued in conjunction with the Advertisement, including, but not limited to, the Instructions to Bidders (hereinafter referred to as the "Instructions") and the Proposal Form, were compiled in a Project Manual that was made available for public inspection. Section 00100 of the Project Manual contained the Instructions, which provided, in pertinent part, as follows: Definitions Bidding Documents include the Advertisement for Bid, Notice to Prospective Bidders, Policies of the School Board, Instructions to Bidders, Contract, General Conditions, Supplementary General Conditions, Special Conditions, Bid Bond, Performance and Payment Bond, Proposal Form, and the proposed Contract Documents including all drawings, specifications and addenda issued prior to bid opening. Addenda are written or graphic instruments issued prior to the execution of the Contract which modify or interpret the Bidding Documents, including Drawings and Specifications, by additions, deletions, clarifications or corrections. Addenda will become part of the Contract Documents when the Construction Contract is executed. Bidding Procedures All Bids must be prepared using the forms contained in these specifications and submitted in accordance with the Instructions to Bidders. A Bid is invalid if it has not been deposited at the designated location prior to the time and date for receipt of Bids indicated in the Advertisement for Bid, or prior to any extension thereof issued to the Bidders. Unless otherwise provided in any supplement to these Instructions to Bidders, no Bidder shall modify, withdraw or cancel his Bid or any part thereof for sixty (60) days after the time designated for receipt of Bids in the "Advertisement for Bid." Preparation and Submission of Bid Proposal Form: Each Bidder shall use Proposal Form contained in these specifications, indicate his Bid prices thereon in proper spaces, for the entire work and for the alternates, if applicable. Any erasures or other corrections in the proposal must be explained or noted over the signature of the Bidder. Proposals containing any conditions, omissions, unexplained erasures, alternates, items not called for or irregularities of any kind may be rejected by the Owner. Each proposal shall specify a price written in ink in both words and figures for each of the separate items, as called for, except when the Bid is called for on a lump sum basis. Lump sum Bids shall be shown in both words and figures; where there is a variation between the written amount and figures, the lower amount will be taken as the Bid price. Bid Modification: Bid Modification will be accepted from Bidders if addressed to the Owners, at the place where Bids are to be received, and if received prior to the opening of Bids. Modifications must be in writing and must be signed. . . . Modifications will be read by Owner or Architect prior to opening formal Bids. Withdrawal of Bids: Bids may be withdrawn on written request received from Bidders prior to the time fixed for opening. . . . Negligence on the part of the Bidder in preparing the Bid confers no right for withdrawal of the Bid after it has been opened. 4. Examination of Bidding Documents: 4.01 Each Bidder shall examine the Bidding Documents carefully and, not later than eight (8) days prior to the receipt of Bids, shall make written request to the Architect for interpretation or correction of any ambiguity, inconsistency or error therein which he may discover. Any interpretation or correction will be issued as an Addendum by the Architect. Only a written interpretation or correction by Addendum shall be binding. No Bidder shall rely upon any interpretation or correction given by any other method. . . . 6. Rejection of Bids 6.01 The Bidder acknowledges the right of the Owner to reject any or all Bids and to waive any informality or irregularity in any Bid received. In addition, the Bidder recognizes the right of the Owner to reject a Bid if the Bidder failed to furnish any required Bid security, or to submit the data required by the Bidding Documents, or if the Bid is in any way incomplete or irregular; to reject the Bid of a Bidder who is not in a position to perform the Contract; and to readvertise for other or further Bid Proposals. Award of Contract The Contract, if awarded by the Owner, will be awarded to the lowest bona fide responsible Bidder; provided the Bid is reasonable and it is in the interest of the Owner to accept the Bid. The method of determining the lowest bona fide Bid from Bidders shall be the Base Bid price plus or minus Alternate Prices listed on the Bid Proposal Form which are accepted by the Owner. Alternates will be considered for acceptance by the Owner as set forth in the Alternate section of the Specifications, Division One-General Requirements, Section 101030-Alternates. Section 101030 of the Project Manual, which addressed the subject of "Alternates," provided, in pertinent part, as follows: 1.3 Related Work Described Elsewhere: Pertinent sections of these specifications describe materials and methods required under the various alternates. . . . The method for stating the proposed Contract Amount is described on the Proposal Form, Section 00310. Base Bid: A. Shall include all HVAC replacement, construction of the building roofing and all items shown on drawings and included in these specifications other than as specifically listed alternates. Alternate Number One: Provide an Architect/Owner on-site construction trailer of size and features stipulated below in lieu of such being provided by the Owner. Section 00310 of the Project Manual contained the Proposal Form that all bidders were required to use. It provided, in pertinent part, as follows: DATE SUBMITTED: TO: The School Board of Palm Beach County, Florida 3326 Forest Hill Boulevard West Palm Beach Florida 33406 PROPOSAL FOR: JUPITER HIGH SCHOOL BUILDING NO.2- HVAC REPLACEMENT/REFOOF/RENOVATIONS 500 NORTH MILITARY TRAIL JUPITER, FLORIDA 33458 PROJECT NO. 349661 Having become familiar with conditions at the Project Site and having carefully examined the Bidding Documents, including the Advertisement, Instructions to Bidders, and the Contract Documents, including but not limited to the General Conditions, Supplementary Conditions, Specifications, Details, Schedules, Addenda and Drawings, the Undersigned proposes to furnish all materials, labor equipment and anything else required for the entire Project in accordance with the Documents for the following sum: BASE BID: STATE PRICE IN WORDS AND FIGURES: ($ ) (PRICE IN WORDS) (FIGURES) ALL ALTERNATES MUST BE BID FOR BID TO BE RESPONSIVE. State price in words and figures. ADDITIVE ALTERNATE NO. 1: (Owner/Architect On-Site Construction Trailer) ($ ) (PRICE IN WORDS) (FIGURES) * * * If he is notified of the acceptance of this Bid within sixty (60) days of the time set for the opening of Bids, the Undersigned agrees to execute a Contract for the above Work within eight (8) Owner business days after notice that his Bid has been accepted for the above stated compensation minus or plus any accepted Alternates in the form of a contract presented by the Owner. . . . On March 30, 1993, the School Board issued Addendum No. 1, which added a fire protection system to the Project's scope of work and provided as follows: RE: Jupiter Community High School Building No. 2 HVAC Replacement, Reroof, Renovations The School Board of Palm Beach County, Florida School Project No. 349661 OEF Project No. 50-005625 P&L Project No. 92-061 To all bidders on the above project: Please note contents hereon and insert into the bidding documents that were issued to you on the above entitled project. The following supersede and supplant corresponding items in the specifications, drawings and details. It will be required that each Contractor- Builder/Developer, upon submitting his proposal for this project, indicate on the proposal form in the space provided that all addenda are included in his proposal. Failure to do so may cause rejection of a company's bid or proposal. The School Board of Palm Beach County, Peacock & Lewis Architects and Planners, Inc. and their consultants assume no liability or responsibility for the information on printed materials for this project that were not distributed from the office of Peacock & Lewis Architects and Planners, Inc. GENERAL: AD1-1: FIRE PROTECTION SYSTEM Contractor shall include within his bid and itemize on the proposal form the cost for a complete and functioning fire protection system as described by the attached specification Section 15500- Fire Protection dated 3/30/93, Addendum No. 1. Paragraph 1.2 A.6 of Section 15500, which was attached to Addendum No. 1, provided as follows: Contractor shall identify the cost associated with this scope of work on the proposal form as an itemized price which shall be included within the total bid price. Refer to proposal form. On April 5, 1993, the School Board issued Addendum No. 2, which revised the Proposal Form to reflect the additional pricing requirements imposed by Addendum No. 1. Addendum No. 2 added to the Proposal Form, immediately under the space provided for "Additive Alternative No. 1," the following: UNIT PRICE NO. 1: (Fire Protection System) Contractor shall include within his bid and itemize on the proposal form the cost for a complete and functioning fire protection system as described by the attached specification Section 15500- Fire Protection dated 3/30/93, Addendum No. 1. ($ ) (PRICE IN WORDS) (FIGURES) No other changes material to the instant case were made to the Proposal Form or to any of the other bid documents. It was the intention of those who were responsible for the preparation and issuance of Addenda Nos. 1 and 2 to require bidders to include the price of the fire protection system in their "Base Bid;" 1/ however, they failed to clearly and unambiguously express their intention in these addenda or any of the other bid documents. No other bid document aside from the revised Proposal Form made any reference to a "unit price." Unit prices are typically used in the construction industry to price work added to the initial scope of work, as was the fire protection system in the instant case. In interpreting the bid documents, Joseph Pirrotta, Petitioner's chief executive officer, relied upon his many years of experience in the construction industry. Based upon his reading of these documents, he reasonably believed that the "Unit Price No. 1 (Fire Protection System)" was a separate and distinct component of the "total bid price" and that, although it was to be included in the "bid" he submitted, it was not to be a part of the "Base Bid." While the bid documents were also susceptible to a contrary construction, Pirrotta's was the more reasonable of the two interpretations. Pirrotta completed the revised Proposal Form accordingly. Petitioner was one of three bidders to submit bids in response to the Advertisement. The other two bidders were Intervenor and Janus & Hill Corporation (hereinafter referred to as "Janus"). Petitioner quoted the following prices on the completed revised Proposal Form it submitted: "Base Bid"- $1,672,000.00; "Additive Alternate No.1"- $3,400.00; and "Unit Price No. 1"- $80,000.00. As noted above, Petitioner's "Base Bid" did not include the price of the fire protection system. Intervenor quoted the following prices on the completed revised Proposal Form it submitted: "Base Bid"- $1,947,000.00; "Additive Alternate No.1"- $6,000.00; and "Unit Price No. 1"- $36,484.00. Unlike Petitioner, Intervenor included in its "Base Bid" the price of the fire protection system; however, even if it had not done so, its "total bid price" would still have been substantially higher than Petitioner's. Janus quoted the following prices on the completed revised Proposal Form it submitted: "Base Bid"- $1,970,000.00; "Additive Alternate No.1"- $2,020.00; and "Unit Price No. 1"- $90,000.00. 2/ After bid opening, the School Board's contract administrator for the Project, Albert Paglia, correctly determined that Petitioner was the lowest responsive bidder. Thereafter, he telephoned Pirrotta to congratulate him on his company's successful bid. Before his telephone conversation with Pirrotta, Paglia assumed that Petitioner's "Base Bid" included the price of the fire protection system. He learned otherwise, however, after speaking with Pirrotta, who informed him that Petitioner's "total bid price," excluding "Additive Alternate No. 1," was its "Base Bid" of $1,672,000.00, plus the $80,000.00 for the fire protection system reflected as "Unit Price No. 1" on its completed revised Proposal Form. Paglia and others with whom he was working on the Project perceived this as a problem. They therefore brought the matter to the attention of Lawrence Zabik, the School Board's assistant superintendent for support services. Zabik's initial reaction was to award the contract for the Project, including the fire protection system, to Petitioner for $1,672,00.00, Petitioner's "Base Bid." Pirrotta was unwilling to undertake the Project for that amount. By letter to Zabik dated May 5, 1993, Intervenor gave notice to the School Board of its intent to protest any award made to Petitioner. The letter provided as follows: Based on our review of the Bid Documents submitted by J.D. Pirrotta on April 20, 1992, we are notifying you of our intent to protest the award of the above referenced project to any firm other than Milne & Nicholls, Inc. We will base our protest on the non- responsiveness of J.D. Pirrotta's bid. As you are aware, Mr. Pirrotta requested an additional $80,000 to compensate him for his misinterpretation of Unit Price #1 as an additive alternate. It is now apparent that his bid is incomplete and therefore non- responsive. Please advise us of the Owner's intention with regard to the Award on this project. Zabik referred the letter to the School Board's Office of the General Counsel. By letter dated May 13, 1993, authored by one of the School Board's attorneys, the School Board announced that it intended to reject all bids and readvertise, giving the following explanation: In the instant case, since the bid is susceptible to two interpretations, one of which would be that the Fire Protection System was included in the base bid, and the other that it was not leads to an unfair economic advantage by one bidder over others. The example would be that the low bidder in the instant case is permitted to add the Fire Protection System on as an alternate when it was not intended. Given the ambiguity, the bid should be rejected and the specifications rewritten and readvertised. [Citations omitted.] In the instant case, rejection of all bids is the only reasonable solution so that all parties are given a fair playing field. The School Board has not acted arbitrarily or capriciously in arriving at this decision to readvertise, given the parties place a different interpretation on the bid proposal form. The concerns expressed in the letter that Pirrotta obtained an "unfair economic advantage" over the other bidders as a result of the "ambiguity" in the bid documents are unwarranted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Palm Beach County School Board enter a final order sustaining the instant bid protest and awarding to Petitioner, as the lowest and best responsive bidder, the contract for School Board Project No. 349661 for $1,752,000.00, plus the price for "Additive Alternate No. 1" should the School Board choose to include this alternate within the Project's scope of work. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 7th day of July, 1993. STUART M. LERNER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 7th day of July, 1993.
The Issue The issue for consideration in this matter is whether Respondent's intended award of a lease for office space to Intervenor, Anthony Abraham Enterprise, is arbitrary and capricious and whether the proposal of the Petitioner, Adlee Developers, the current lessor, is responsive.
Findings Of Fact The parties agreed that on April 7, 1991, the Department issued an Invitation to Bid entitled, "Invitation To Bid For Existing Facilities State Of Florida Lease Number 590:2286, Dade County" This procurement was for the provision of 30,086 net rentable square feet to be used for office space in Dade County. A 3% variance was permitted. The facility was to house the District's Aging and Adult Services office which has been a tenant in Petitioner's building for several years and remained there during the pendancy of this protest process. According to the published advertisement, a pre-proposal conference was to be held on April 22, 1991, with all bids due by the bid opening to be held at 10:00 AM on May 30, 1991. The pre-bid conference was conducted by Philip A. Davis, then the District's facilities service manager and included not only a written agenda but also a review of the evaluation process by which each responsive bid would be examined. Petitioner asserts that the potential bidders were told, at that conference, that annual rental increases for the ten year lease period could not exceed five per cent (5%) and claims that Abraham's bid exceeded those guidelines. Thorough examination of the documentary evidence presented and the transcript of the proceedings, including a search for the reference thereto in Petitioner's counsel's Proposed Findings of Fact, fails to reveal any support for that assertion as to an increase limitation. The ITB for this procurement, in the section related to the evaluation of bids, indicated that pursuant to the provisions of Sections 5-3 and 5-11 of HRSM 70-1, dealing with the procurement of leased space, the responsive bids would be reviewed by an evaluation committee which would visit each proposed facility and apply the evaluation criteria to it in order to determine the lowest and best bidder. The evaluation criteria award factors listed in the ITB defined a successful bid as that one determined to be the lowest and best. That listing of evaluation criteria outlined among its categories associated fiscal costs, location, and facility. As to the first, the committee was to look at rental rates for both the basic term of the lease and the optional renewal period. The rates were to be evaluated using present value methodology applying the present value discount rate of 8.08% and rates proposed were to be within projected budgeting restraints of the Department. The total weight for the rental rate category was to be no more than 40 points with 35 points being the maximum for the basic term and 5 points for the option. Evaluation of the location was to be based on the effect of environmental factors including the physical characteristics of the building and the area surrounding it on the efficient and economical conduct of the operations planned therefor. This included the proximity of the facility to a preferred area such as a co-location, a courthouse, or main traffic areas. This item carried a maximum weight of 10 points. Also included in location were the frequency and availability of public transportation, (5 points); the proximity of the facility to the clients to be served, (5 points); the aesthetics of not only the building but the surrounding neighborhood, (10 points); and security issues, (10 points). The third major factor for evaluation was the facility itself and here the committee was to examine the susceptibility of the offered space to efficient layout and good utilization, (15 points), and the susceptibility of the building, parking area and property as a whole to possible future expansion, (5 points). In that regard, the Bid Submittal Form attached to the ITB called for the successful bidder whose property did not have appropriate zoning at the time of award to promptly seek zoning appropriate to the use classification of the property so that it might be used for the purposes contemplated by the department within 30 days. In the event that could not be done, the award could be rescinded by the department without liability. The committee could award up to 100 points. The basic philosophy of this procurement was found in paragraph 1 of the Bid Award section of the ITB which provided: The department agrees to enter into a lease agreement based on submission and acceptance of the bid in the best interest of the department and the state. After the bid opening, three of the four bids received, excluding Petitioner's which was initially determined to be non-responsive, were evaluated by the Department's bid evaluation committee according to the above point system which allowed no discretion or deviation from the formula in comparing rental rates between bidders. Once Petitioner's bid was thereafter determined to be responsive, it, too was evaluated by the committee. At this second evaluation session, relating to Adlee's bid only, the committee scored the bid and added its scores to the original score sheets upon which the other three bidders' scores had been placed. Abraham had the lowest rental rates for the basic term of the lease and received the maximum award of 35 points for that category while Adlee received points. Abraham received an additional 2.29 points for the optional period rates while Adlee got 0. In the other categories, "location" and "facility", which comprised 60% of the points, Adlee's facility was routinely rated superior to Abraham's except for the area related to susceptibility for future expansion in which Abraham was rated higher by a small amount. Overall, however, Adlee was awarded 620.41 points and Abraham 571.03 points and as a result, Adlee was rated by the committee to be the lowest and best bidder. RCL, another bidder, was rated second, with Abraham third and DCIC fourth. Thereafter, the committee chairman, Mr. VanWerne, forwarded the new (and complete) evaluation results to the District Administrator on June 14, 1991 by an addendum dated June 27, 1991 which recommended award of the bid to Petitioner, Adlee Developers. No award was made at the time. Several factors not pertinent to the issues here caused that delay. Among the major of these was pending legislation which would have transferred the operation needing this space to another agency. This transfer was never consummated, however. On or before March 20, 1992, the new District Administrator, Mr. Towey, who had been appointed to his office in December, 1991, and who was made aware that this procurement had not been finalized, requested all available material on it so that he could study it and make his decision based on his own review of the submission. As a part of his determination process, he visited and inspected both the Adlee and the Abraham sites. One of the factors he considered was what appeared to be the significant monetary discrepancy between the two pertinent bids. Initial calculations indicated that Abraham's bid was approximately $835,000.00 lower than Adlee's over the ten year basic term of the lease. This amount was subsequently determined to be somewhat lower but the discrepancy is still significant. Nonetheless, because of that difference, Mr. Towey called a meeting with the members of the evaluation committee which had evaluated the bidders and had recommended Adlee. His stated reason for calling that meeting was to allow him to hear their reasons for rating the submissions as they had done and to take that information into consideration when he made his final decision. None of the committee members who testified at the hearing at Petitioner's behest indicated any feelings of pressure or intimidation by Mr. Towey. During his meeting with the committee members, Mr. Towey went over several of the evaluation criteria award factors to determine the committee's rationale. Of major importance was the issue of cost, of the availability of the facility to transportation to and from the building, employee security and the ability to control access to the facility, and the availability of on-site parking without cost to both employees and clients. It appears the Adlee facility is a multistory building with some parking available on site and would be easier to control. In addition, it is closer to public transportation access points. There is, however, some indication that on-site parking for clients would not be free and the closest free parking is some distance away. According to Adlee's representative, this matter would not be a problem, however, as adequate, free on site parking, which apparently was not initially identified as a problem, could be provided in any new lease. The Abraham facility is a one story building surrounded by on-site parking. In that regard, however, at hearing, Petitioner raised the claim that the Abraham site did not, in actuality, provide adequate parking because the zoning requirements of the City of South Miami, the municipality in which the facility is located, did not permit the required number of parking spaces to accommodate the prospective need. Petitioner sought and received permission to depose the Building and Zoning Director for the city, Sonia Lama, who ultimately indicated that the Abraham site was grandfathered in under the old zoning rule and, thereby, had adequate parking available. In any case, had this not been true, under the terms of the ITB, any zoning deficiencies could have been corrected after award, or the award rescinded without penalty to the Department. After the meeting with the committee, Mr. Towey indicated he would probably go against the committee's recommendation. One of his reasons for doing so, as he indicated to them, was the appearance certain amenities in the facility would give. In the period between the time the committee met and Mr. Towey was ready to decide, there were several newspaper articles published in the Miami area which were negative in their approach to Department leasing policies and this publicity had an effect on him. In his response to a reporter's question, in fact, Mr. Towey indicated he would not permit the lease of any property which contained such amenities while he was District Director. There is some evidence that the wet bar referred to here was a sink and counter used by agency employees to make coffee. However, before making his decision, Mr. Towey also met with Herbert Adler of Adlee. Mr. Towey advised him he was concerned about the fact that the Adlee property provided a wet bar, a private bathroom and some other amenities in that suite of offices occupied by the Department. Mr. Towey was adamant in his public and private pronouncements on the subject that there would be no such amenities in HRS offices in his District while he was in charge. At the meeting in issue, Mr. Adler made it very clear he was willing to remove all the offending amenities to bring the space into conformity with Mr. Towey's standards. Mr. Towey obviously took Adler at his word as he did not consider this matter to be an issue when he evaluated the bids. Based on his independent evaluation of the proposals, and considering all the pertinent factors, Mr. Towey decided not to concur with the committee's recommendation and instead recommended to the Department's Office of General Services that the bid be awarded to Abraham. Because his recommendation differed from that of the evaluation committee, under the provisions of Section 5-13, HRS Manual 70-1, he was required to forward additional justification for his position. In his forwarding memorandum dated March 20, 1992 to Mr. King Davis of the Department's Office of General Services, Mr. Towey listed as his reasons for disagreement with the committee's recommendation, (1) the lower term cost of Abraham's bid, (2) his opinion that the one story floor plan of Abraham was more convenient and accessible to clients, and (3) the provision for ample free parking at the Abraham site as opposed to the limited parking at the Adlee building. Petitioner claims that Mr. Towey's justification for disagreement was improper because, (a) the rental difference he cited was not based on the ITB formula and did not consider the difference in square footage offered; (b) the rental rate comparison compared a proposed lease with an existing lease, not with a proposal; and (c) the reference to on-site parking referred to the situation under the existing lease with Adlee and not to what could occur under a new lease. The major factor in Mr. Towey's decision was the price differential between the two offerings. While the difference may not have been as great as presented initially by the department staff, even taken in its most conservative light of about half that amount, and considering the appropriate figures, the difference was still considerable and significant. In the continuing period of budgetary austerity under which state operations have been and must continue to be conducted, the financial consideration loomed large in his thinking. As for the parking situation, no change for the better was provided for in Adlee's proposal and even if it were, it was but one of several factors. When Mr. Towey's March 20, 1992 memorandum in justification of his disagreement was evaluated at the Office of General services, it was determined that his decision was rational and objectively justified. Thereafter, by letter dated April 2, 1992, the Office of General Services authorized District 11 to award the lease to Abraham and this decision was transmitted to all responsive bidders by letter dated April 7, 1992. It was this action which prompted Petitioner's protest.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be entered dismissing the protest by Adlee Developers, Inc., of the award of procurement No. 590:2286 to Anthony Abraham Enterprises. RECOMMENDED this 10th day of July, 1992, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 10th day of July, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-2798 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of Fact submitted by the parties to this case. FOR THE PETITIONER: - 4. Accepted and incorporated herein. Accepted. Accepted that the pre-bid conference was held but reject the finding that a 5% limit was mentioned. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. & 11. Accepted and incorporated herein. 12. - 14. Accepted and incorporated herein. 15. - 19. Accepted and incorporated herein. Accepted and incorporated herein. Accepted. Accepted except for the next to last sentence which is rejected. Accepted. Accepted and incorporated herein. Accepted but not probative of any material issue. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. & 30. Rejected. - 33. Accepted and incorporated herein. FOR THE RESPONDENT AND INTERVENOR: & 2. Accepted and incorporated herein. 3. - 5. Accepted. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. - 16. Accepted and incorporated herein. 17. - 19. Accepted and incorporated herein. 20. & 21. Accepted and incorporated herein. Accepted and incorporated herein. - 25. Accepted. COPIES FURNISHED: Melinda S. Gentile, Esquire Ruden, Barnett, McClosky, Smith, Schuster & Russell 200 East Broward Blvd. P.O. Box 1900 Fort Lauderdale, Florida 33302 Paul J. Martin, Esquire Department of Legal Affairs The Capitol - Suite 1501 Tallahassee, Florida 32399-1050 Peter W. Homer, Esquire Greer, Homer & Bonner, P.A. 3400 International Place 100 S.E. 2nd Street Miami, Florida 33131 John Slye General Counsel Department of Health and Rehabilitative Services 1323 Winewood Blvd. Tallahassee, Florida 32399-0700 Sam Power Agency Clerk DHRS 1323 Winewood Blvd. Tallahassee, Florida 32399-0700
The Issue The issue in this case is whether the proposed award of contracts by the Agency for Health Care Administration (AHCA) to Caremark, Inc. (Caremark), and Lynnfield Drugs, Inc., d/b/a Hemophilia of the Sunshine State (Lynnfield), pursuant to AHCA's Request For Proposal (RFP) 0507, was contrary to AHCA's governing statutes, AHCA's rules or policies, or the solicitation specifications.
Findings Of Fact AHCA is the state agency authorized to make payments for medical assistance and related services under Title XIX of the Social Security Act (the "Medicaid" program). There are approximately 250 Medicaid-eligible individuals ("beneficiaries") in Florida who have hemophilia. Hemophilia is a bleeding disorder caused by a deficiency in one of numerous clotting proteins or "factors" that contribute to the ability of a person's blood to clot. The disease is treated by administration of the deficient clotting factor to a person. The costs for hemophilia medicines ("factor products") and treatment for this relatively small group of beneficiaries are extremely high, estimated to be $46 million in 2005. Half of these costs are paid by Florida, half by the federal government. Section 287.057, Florida Statutes (2004),2/ requires an agency to make a written determination that an Invitation to Bid is not practicable for procurement of commodities or services prior to issuance of an RFP. On August 24, 2004, AHCA made the written determination that an Invitation to Bid was not practicable for procurement of the services called for in the MCHM program. Pursuant to Subsection 120.57(3)(b), Florida Statutes, a challenge to the terms and specifications of an RFP must be filed within 72 hours of notice of the posting of the RFP. There were no challenges filed to the terms and specifications of RFP 0507. RFP 0507 contemplates a statewide hemophilia management program that combines pharmaceutical management and disease management. Section 5.0 of the RFP identifies the two fundamental requirements for vendors responding to the RFP: The vendor must demonstrate that it has the capability to design, implement, monitor and evaluate a comprehensive hemophilia management program. The vendor must demonstrate that it has the experience in designing and implementing projects similar to the one prescribed in this RFP. Under the terms of the RFP, AHCA was to contract with up to three experienced vendors for a period of two years, with an option to extend the contract for an additional two-year period. Beneficiaries of the hemophilia services will be notified and instructed to choose one of the winning vendors or, for beneficiaries who do not make a choice, AHCA will assign a winning vendor on an equal, rotational basis. The RFP provides that the successful vendors will be paid on the basis of the factor products dispensed to eligible Medicaid beneficiaries. All other services required by the RFP must be delivered within the revenue provided by AHCA's reimbursement of factor product costs. Originally, RFP 0507 called for the submission of a technical proposal and a separate cost proposal. The cost to the State for the services provided was not to exceed the total cost of the factor products dispensed, discounted to the Average Wholesale Price (AWP) of the factor product, minus 39 percent. Cost proposals would have been scored separately from technical proposals, and then the two scores were to be combined to determine the ranking of the competing vendors. On January 21, 2005, prior to the deadline for responses to RFP 0507, AHCA issued Addendum 5 to the RFP, which eliminated the requirement for a separate cost proposal. All vendors were required to provide the technical services for the revenue they would receive under a reimbursement methodology set forth in Addendum 5. The reimbursement methodology makes AWP, minus 39 percent one of several measures of cost, the lowest of which determines the maximum reimbursement that Florida will pay the vendor. The change to RFP 0507 brought about by Addendum 5 did not change the fundamental nature of the RFP. Both the original RFP and the revised RFP created a competition among vendors to provide the best hemophilia management services to the State for a maximum cost. Addendum 5 changed the maximum cost from AWP, minus 39 percent, for factor products to a cost determined by the reimbursement formula. Under both the original RFP 0507 and the RFP as modified by Addendum 5, vendors could propose to provide factor products at a cost to the State lower than AWP, minus 39 percent. However, greater weight or importance would have been given to a proposal to provide factor products at a lower cost under the original RFP, because it called for cost proposals to be separately presented, evaluated, and scored. Based on the maximum scores attainable for the technical and cost proposals (1000 and 500, respectively), the cost proposal would have accounted for a third of a vendor's total score under the original RFP. Under the revised RFP, cost-saving measures offered by a vendor were relevant to only a few of the technical items in the RFP, such as those related to the management and dispensing of factor products. Even in the aggregate, these evaluation criteria allowed for the award of relatively few points for cost-saving measures contained in a proposal. AHCA received eight proposals in response to RFP 0507. One proposal was rejected by AHCA because it was determined to be non-responsive. The seven remaining proposals were made a part of the case record. Although RFP 0507 stated that up to three contracts would be awarded, AHCA decided to award contracts only to Caremark and Lynnfield. In a memorandum dated May 16, 2005, AHCA explained that "the points awarded indicate the top proposals scored significantly higher than the others. A difference of 124 points between the number two and the number three ranked proposal indicates a measurable difference in quality." The Organization of HHS's Proposal Section 6.0 of the RFP sets forth "Proposal Instructions." These instructions include a requirement to submit the proposal in a three-ring binder and to number the pages of the proposal. Another requirement imposed on the form of the proposal, as opposed to its content, was that the proposal had to use four tabs with specified titles. Tab 4 was to contain each vendor's technical response to the RFP. The RFP stated, "This is the most important section of the response with respect to the organization's ability to perform under the contract." Section 6.1E of the RFP describes the various categories of information that are required to be part of the vendor's technical response. There are eight general categories: Summary; Organizational Background and Experience; Project Staffing; Technical Approach; Innovations; Implementation Plan; Systems, Security and Confidentiality; and Certification Relating to Contracts. Some of these general categories were broken down further into separately numbered items of required information. For example, under the heading "Organizational Background and Experience," there are 11 numbered paragraphs describing the information required to be included in the proposal. Some of the numbered paragraphs are further divided into information requests identified by letter, such as item 9, which is divided into 23 information requests, lettered a through w. A logical manner in which to organize a proposal would be to present the information in the same order as the information is requested in the RFP, using the same headings, numbers, and letters that are used in the RFP. All the vendors, except HHS, organized their proposals so that the technical information required by Section 6.1E of the RFP was located under a divider or page labeled "Tab 4" or "Technical Proposal," and presented in the same order as the information was requested in the RFP. HHS's proposal has a "Tab 4" with a first page that includes the title "Technical Proposal" and begins with the required "Summary." Following the summary, however, HHS skips items 1 through 8 that were set forth in the RFP under the general category "Organizational Background and Experience" and presents a response to item 9. Then, HHS skips other items set forth in the RFP and presents information about "Innovations." At the end of HHS's Tab 4 is the heading "Additional Requested Information," followed by a list of seven appendices. Some of the information required to be in HHS's technical proposal is contained in these seven appendices. HHS's proposal included a table of contents that listed 31 other appendices, with subject titles, that contained more of the information that the RFP required to be included in each vendor's technical proposal. HHS chose to organize its proposal as it did because it believed the information it placed in the appendices was responsive to several parts of the RFP, and it would "irritate" the evaluators to see the same information repeated in several places. However, HHS's proposal did not always include notations that directed the evaluators to the appendices where relevant information was located. HHS acknowledged that it could have done "a much better job" in organizing its proposal. In the case of some items of requested information, very little effort was required for the evaluators to find the information in HHS's technical proposal. For example, it was relatively easy for an evaluator looking for information related to project staffing to find it in HHS's Appendix AG, entitled "Project Staffing." In other cases, however, greater effort was needed to find the information HHS says was relevant to a particular information request in the RFP. For example, HHS did not include behind Tab 4 a direct response to item 5 under "Organizational Background and Experience," which requests a detailed description of the vendor's organizational structure and ownership, and HHS did not refer the evaluator to a particular appendix. HHS contends the requested information is provided in Appendix AL, entitled "2004 Accredo Annual Report," which contains the Form 10-K for Accredo Health, Inc., HHS's parent company. Another example is HHS's response to item 8 under "Organizational Background and Experience," which requests a plan for the use of woman- or minority-owned businesses. HHS did not respond directly to this request under Tab 4 of its proposal, and its proposal merely contains a letter in Appendix AJ, entitled "Ethnically Diverse Utilization," from a woman-owned business to Accredo Health, Inc., acknowledging an existing relationship with HHS's parent company.3/ One of AHCA's evaluators said she gave HHS a score of zero for 27 evaluation criteria because she could not find the relevant information in HHS's proposal. The record evidence does not show that any other evaluator was unable to find information presented in HHS's proposal or failed to review the proposal in its entirety and score the proposal on its substantive merits. Whether HHS's Proposal Was Non-Responsive AHCA and the Intervenors claim that HHS's proposal was non-responsive to RFP 0507 because it does not include information required by Sections 7.2I and 7.2L of the RFP. Section 7.2 is entitled "Evaluation of the Mandatory Requirements of the Technical Proposal" and states in relevant part: During this phase, the Agency will determine if the technical proposal is sufficiently responsive to the technical requirements of the RFP to permit a complete evaluation. In making this determination upon opening the technical proposal, the overseer(s) will check each technical proposal against the following list: * * * Does the proposal include a table of contents listing sections included in the proposal and the corresponding sections of the RFP to which they refer? * * * L. Does the technical proposal include a description of the vendor's corporate background and experience at the level outlined in Section 6.1E of the RFP? Section 7.3 states that only those technical proposals determined to meet the mandatory technical requirements set out in Section 7.2 will be further evaluated. Presumably, AHCA determined that HHS's technical proposal included all mandatory requirements, because the proposal was not rejected. The table of contents in HHS's proposal accurately describes the information that is presented in its proposal. However, it does not list all the headings and information items as they appear in the RFP. There are over 30 itemized information requests in Section 6.1E related to the vendor's background and experience. HHS's proposal included information about its corporate organization and experience. However, the organization of the proposal made some of the information difficult to find. Sandra Berger, the AHCA employee who has coordinated contracts and procurements for the Medicaid program, stated that AHCA's policy regarding the review of RFPs is that the evaluator is to review the entire proposal; and if information is not found where it should have been presented, the evaluator will look elsewhere in the proposal for the information. AHCA's expectation is that the evaluator will read every sentence in every paragraph of each proposal. AHCA's Consideration of HHS's Guarantees HHS contends that three cost-saving measures that it offered in its proposal were not considered at all or not fairly considered by the evaluators. HHS offered an "assay management guarantee," an emergency room visit guarantee, and an outdated product guarantee. Because clotting factors are proteins or "biologics," the manufacturers of factor products cannot create a precise potency; they can only target potency. In the same sense that ore is assayed to determine its content of gold or other mineral, factor products are assayed to determine their content of clotting factor (potency). A manufacturer of factor products will generally produce products with low range, mid-range, and high-range potencies. Even within a targeted range, there will be variances of potency between particular vials of product that are dispensed. The recommended potency for some hemophilia treatments, such as a prophylactic regimen, is less than for others, such as for break-through bleeding. Therefore, "assay management" for factor products is a fundamental component of the current treatment of hemophilia. AHCA has established 105 percent as a threshold for evaluation of assay management. That means AHCA has an expectation that the factor dispensed to a patient will generally deviate less than five percent above the factor assay or potency prescribed for the patient by the physician. The 105 percent figure is a monitoring and evaluation threshold, not an absolute maximum. The State is required to pay for factor products exceeding the 105 percent threshold if they were medically necessary. HHS offered an "assay management guarantee" to repay AHCA on a quarterly basis for the cost of factor product that exceeded 102 percent of the target dose. Based on an HHS study done with 56 patients, the guarantee would have created a cost savings of $154,000. If a similar savings rate were realized for the approximately 250 Medicaid-eligible hemophilia patients in Florida, the savings would be approximately three times greater. Caremark also offered an assay management guarantee, but structured differently. However, AHCA does not view this particular type of guarantee as necessarily beneficial. AHCA believes it could create an incentive for the provider to withhold care, not based on medical considerations, but on financial considerations. A provider might reduce factor products dispensed to the patient in order to avoid exceeding a guarantee and having to repay the State. HHS also offered an emergency room visit guarantee so that AHCA would not have to pay for unnecessary emergency room visits. HHS defined unnecessary emergency room visits as those caused by the patient not having the correct amount or type of factor or a sufficient amount or type of infusion "ancillaries." HHS offered to credit AHCA $500 for each unnecessary visit. Another cost-saving measure offered in HHS's proposal was to replace outdated product without cost to AHCA. AHCA did not dispute that these two cost-saving measures would be of benefit to the State. No evidence was presented regarding the estimated value of the benefit. Few of the evaluation criteria for RFP 0507 related directly to the cost-saving measures offered by HHS. HHS presented information about its assay management guarantee in items 9.j and l, under "Organizational Background and Experience." Information about HHS's outdated product guarantee was presented under item 9.k. Information about HHS's emergency room visit guarantee was presented under item 9.v. The maximum score that HHS could have received for these four items was 20 points, out of a total score of 1000 for all criteria.4/ The Scoring Criteria For purposes of evaluation and scoring of proposals, AHCA formed the technical requirements of the RFP into 50 separate criteria, each worth from zero to 10 points, for a maximum possible score of 1000 points. The scoring scale for the 50 criteria was as follows: Points Vendor has demonstrated 0 No capability to meet the criterion 1-3 Marginal or poor capability to meet the criterion 4-6 Average capability to meet the criterion 7-9 Above average capability to meet the criterion 10 Excellent capability to meet the criterion Each of the 50 criteria was set forth on a separate evaluation sheet used by the evaluators. Each evaluation sheet identified from where in the RFP the criterion came. The 50 criteria in the evaluation sheets, however, did not correspond to 50 evaluation criteria, identified as such, in the RFP. RFP 0507 rarely uses the term "criteria." Instead, the itemized information requests in the RFP are alternately referred to as "instructions" (Section 6.0), as "specifications" (Section 6.1E), and as "requirements" (Section 7.3). In seven instances, two or more itemized information requests in the RFP were combined to form one criterion on an evaluation sheet. An example is page 13 of the evaluation sheets that grouped together items 9.e, f, g, and h, under "Organization Background and Experience." Judith Saltpeter, the AHCA employee who was principally responsible for the creation of the evaluation sheets, grouped these items together because they all related to vendor assistance to "physicians, specialists and other providers." Another example is the combination of items 9.j, k, and l into one criterion for scoring on page 15 of the evaluation sheets. These three items were combined by Ms. Saltpeter because they were all related to the vendor's proposed handling of factor products. There were two instances in which a single information request in the RFP was divided into more than one criterion for scoring on the evaluation sheets. For example, the evaluation criteria on pages 25, 26, and 27 of the evaluation sheets are derived from a single paragraph of the RFP under "Project Staffing": 2. Identification of staff along with details of training and experience of those individuals who will serve as the Project/Contract Manager, Clinical Pharmacist Coordinator, and Care Management Coordinator. Resumes and relevant licensure of all identified/named staff shall be included in an appendix to the proposal. AHCA made each of the three positions named in this paragraph a separate criterion for evaluation and scoring because of the perceived importance of these positions to the quality of the vendor's performance. The 50 evaluation criteria used for RFP 0507 were almost identical to the 50 evaluation criteria used for RFP 0403, in which HHS participated. Section 7.3 of the RFP, entitled "Evaluation of Technical Proposals," states in relevant part: Only those technical proposals determined to meet the technical requirements of this RFP will be further evaluated. Evaluation of technical proposals will involve the point scoring of each proposal by component specified in the RFP. The Agency will evaluate the extent to which the services offered in the proposal and the procedures and methods for performing such services meet the requirements of the RFP. For this purpose, evaluators will judge a vendor's description and explanation of the services it will perform to meet the service requirements of each component. Included in Addendum 5 to RFP 0507 and made a part of the RFP are "Agency Responses to Bidders' Questions," which include questions asked by the vendors at the vendors conference held prior to submittal of proposals and AHCA's answers. Two questions and answers are relevant here: Question: How will scoring for the technical proposal be evaluated? Do some [technical] questions have higher weight: If so provide weighting. Answer: All technical items have equal weight. Question: What specific factors will be used for the technical proposal evaluation pursuant to Section 7.3 of the RFP? What will be the relative weight of each factor? Answer: Equal consideration will be given to all items found under Section 6, excluding 6.3 Cost Proposal Requirements and 6.4, Cost Proposal Instructions. The organization of the technical requirements of the RFP into itemized lists and AHCA's statements to the vendors that "All technical items have equal weight" and "Equal consideration will be given to all items found under Section 6," communicated to the vendors a scoring process that was not followed by AHCA. There is nothing in the RFP that informs prospective vendors of the scoring process that was actually used. The combining and dividing of the information requirements in the RFP for scoring purposes affected their relative importance, but no prospective vendor would know from reading RFP 0507 that some of the requirements of the technical proposal would be combined for scoring and other requirements would be divided for scoring. No prospective vendor would know which items in the RFP would be worth up to 10 points, which items were worth only 1/3 or 1/4 as much and which items were worth twice as much. There is no evidence that AHCA acted arbitrarily or capriciously in combining and dividing the technical requirements of the RFP to create the 50 evaluation criteria. There was a rationale behind the combinations and divisions. However, RFP 0507 did not indicate the relative importance of the criteria. Their relative importance was only determinable by reviewing the evaluation sheets, which were not made a part of the RFP. Nevertheless, HHS failed to demonstrate that this error by AHCA made any difference to the contract awards under RFP 0507. The combining and dividing of technical requirements affected all vendors equally. Adjusting the scores so that every itemized technical requirement from the RFP is given equal value would not change the rankings. For example, if an evaluator gave a score of "5" for a criterion that was created from four requirements set forth in the RFP, the score was adjusted to 20 (four times five), and this kind of adjustment was made to all scores for all affected criteria, HHS would still finish in sixth place. Even if the actual scores might have varied from the adjustment just described, there is no evidence to explain how the variance could be more than de minimus or could change HHS's ranking. A related issue concerns item 3 under "Project Staffing" and item 20 under "Technical Approach," also related to staffing, that did not become evaluation criteria for scoring purposes. HHS claims that AHCA's decision to not make these items evaluation criteria was prejudicial to HHS because its proposal regarding project staffing was superior to what was offered by the other vendors. However, if these two items had become two evaluation criteria, they would have been worth a maximum of only 20 points. Even assuming that HHS had been given the highest points by all four technical evaluators for these two items, HHS's ranking would not have changed. Scoring by the Evaluators The four AHCA employees who evaluated the technical proposals were Linda Barnes, a registered pharmacist (Scorer "A"); Maresa Thomas, a registered nurse (Scorer "B"); Bruce McCall, who holds a doctorate in pharmacy (Scorer "C"); and Nancy Knox, a registered nurse (Scorer "D"). Kay Newman, a certified public accountant, reviewed only the financial information provided by the vendors. The evaluators were each provided a copy of the seven proposals, the original RFP, Addendums 5 and 11 to the RFP, an evaluation packet, and a conflict of interest form. The technical evaluators were given an instruction sheet and verbal instructions for evaluating the technical proposals. The instruction sheet distributed to the evaluators provided that the evaluators "should" justify their scores in the "comments" section of the score sheets. Some of the evaluators made comments, others did not. Each evaluator worked independently. The evaluators did not confer with each other or with anyone else during their evaluation of the proposals. The evaluators conducted their evaluations over a period of three weeks. Because each evaluator worked independently, the scores on each proposal differed. It can be expected, and was true in this case, that some evaluators will generally assign lower scores than other evaluators; some evaluators will tend to assign higher scores. There was no evidence that any evaluator for RFP 0507 was inconsistent in the application of his or her scoring approach to all proposals. In addition to the points awarded by the technical evaluators for the 50 criteria, each proposal also received "Financial Audit" points (between one and ten) from Kay Newman. Ms. Newman scored the seven proposals as follows: Caremark 9 Lynnfield 9 AmeriHealth 0 OptionCare 8 Maxim 8 HHS 9 PDI Pharmacy 4 Points were also assigned to the vendors based on telephone "reference reviews" conducted by AHCA employees Hope Chukes and Patricia Morena. Two references were selected for each vendor from the references listed in the proposals. The reviewers used a form with questions related to whether the vendor had fulfilled its obligations under previous contracts. In most cases, three points were given to the vendor when the reference reported that the vendor had performed the particular obligation; otherwise, a score of zero was given. The maximum score that could be obtained for the reference review was 19 points. Some questions on the reference review form were not relevant to the previous contract between the vendor and the reference organization. In those instances, Ms. Chukes was directed to give vendors a score of "3" for the question, rather than penalize the vendors with a score of zero. Because the reference reviews indicated that all vendors had performed their obligations under previous contracts, AHCA gave all vendors the maximum total score of 19. Following the conclusion of the technical evaluations, Ms. Chukes tallied the scores from the four technical evaluators, the financial audit scores from Ms. Newman, and the reference review scores. The resulting total scores and ranking of proposals were as follows: 1 Caremark 1437.2 2 Lynnfield 1384.9 3 AmeriHealth 1207.83 4 OptionCare 1107 5 Maxim 964.3 6 HHS 889.3 7 PDI Pharmacy 774.55 There are some fractional scores, because Ms. Thomas (and only Ms. Thomas) scored multi-part criteria by initially assigning a score to each subpart, using the zero-to-ten scale, and then averaging the result. Although this scoring approach would have caused a variance, in some cases, from the score that Ms. Thomas would have assigned if she had simply scored the criterion as a whole, the variance would have been de minimus. It would not have changed HHS's ranking. For reasons not explained in the record, AHCA manipulated the raw scores by averaging them, assigning the highest ranked vendor a score of 1000, and dividing the average scores of the other vendors by 1000. These manipulations did not change the ranking that resulted from the total raw scores as indicated above. None of the evaluators ranked HHS higher than fourth. One evaluator ranked HHS fourth, one ranked HHS fifth, and two ranked HHS seventh (last). Scoring by Ms. Thomas Ms. Thomas assigned HHS's proposal a zero for 27 of the 50 evaluation criteria. In her notes on the evaluation sheets and in her testimony at the hearing, Ms. Thomas explained that she gave HHS zeroes because she could not find HHS' responses for these criteria, and she assumed they had been omitted. For example, because she did not see information under Tab 4 of HHS's proposal numbered 1 through 7 to correspond to paragraphs 1 through 7 of the RFP, she assumed that the information had been omitted from HHS's proposal. Ms. Thomas did not always look through HHS's entire proposal to determine whether the information she expected to see in Tab 4 was located in an appendix or elsewhere. When she did not find information where she expected it, she often made a notation "nothing presented" on the evaluation sheet and assigned a zero for the criterion. There was no evidence that any other evaluator did the same. The other three evaluators apparently looked through HHS's entire proposal, found the relevant information, and assigned points for each criterion based on their review of the information. As stated above, AHCA's policy regarding the review of a proposal is that the evaluator is to review the entire proposal and, if information is not found where it should have been presented, the evaluator will look elsewhere in the proposal for the information. AHCA's expectation is that the evaluator will read every sentence in every paragraph of each proposal. There is no evidence that Ms. Thomas was biased either for or against any particular vendor. However, it was the duty of the evaluators to read each proposal in its entirety. Nothing in the RFP instructions authorized the evaluators to ignore information in a proposal if it were in the "wrong" place. In most cases, the information Ms. Thomas claims she could not find required little effort to find and was found by the other three evaluators. Ms. Thomas' failure to consider all the information presented in HHS's proposal when assigning scores under the 50 evaluation criteria was contrary to agency policy. Her assignment of a zero to HHS in 27 categories was arbitrary. However, HHS failed to demonstrate that, but for the arbitrary scoring by Ms. Thomas, HHS would have been awarded a contract under RFP 0507. If all of Ms. Thomas's scores are deleted, HHS still ranks sixth. If all of the zeroes that Ms. Thomas gave HHS were converted to tens, HHS would only move up to fourth place and would still not win a contract under RFP 0507. HHS complained of other aspects of the evaluation process used for RFP 0507, such as the separate financial audit performed by Ms. Newman and the reference review. However, HHS failed to prove that if all these alleged errors by AHCA were eliminated, HHS would have been a winner under RFP 0507.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Agency for Heath Care Administration enter a final order awarding contracts under RFP 0507 to Caremark, Inc., and Lynnfield Drugs, Inc. DONE AND ENTERED this 2nd day of December, 2005, in Tallahassee, Leon County, Florida. S BRAM D. E. CANTER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of December, 2005.
Findings Of Fact On February 7, 14 and 21, 1989, respondent, School Board of Pinellas County (Board), published a legal advertisement in an area newspaper inviting prospective bidders to submit proposals for certain construction work to be performed on two elementary schools, Walsingham and Cross Bayou, located in Largo and Pinellas Park, Florida, respectively. The bidders were advised that their bids must be "prepared and submitted in accordance with the drawings and specifications" and that such drawings and specifications could be obtained from the Board. Such bids were to be filed with the Board no later than 2:00 p.m. on March 6, 1989. The notice also provided that the bids would be opened the same day. Bids were timely filed by at least five contracting firms, including petitioner, Prelude Construction Company, Inc. (Prelude), and intervenors, Lincoln Construction Company (Lincoln) and Bandes Construction Company (Bandes). In filing these proposals, each bidder represented he had "thoroughly examined all of the contract documents." After the bids were opened and reviewed by Board personnel, Lincoln, Prelude and Bandes were ranked first, second and fourth, respectively, based upon the dollar amount of their proposals. 2/ Thereafter, the Board issued its notice of intended action on March 7, 1989, wherein it advised all parties of its intention to award the contract to Lincoln. In doing so, the Board concluded that, although a bid bond accompanying Lincoln's proposal was not dated March 5 or 6 as required by the specifications, the deviation was minor and could be waived. That action prompted Prelude to file its protest. Through testimony of Lincoln's vice-president, it was established that the Board staff intended to change its initial position and to recommend to the Board that Lincoln's bid proposal be rejected and the contract awarded to Bandes. This change was prompted by the Board staff's discovery on the day of hearing (April 3) that, with the exception of Bandes, all bidders had failed to list the, roofing subcontractor on their bid proposals. The Board staff accordingly concluded that all bidders except Bandes should be disqualified. The bid specification upon which the Board relies to award the contract to Bandes is found in Part One, paragraph 1.1 of section 07511 of the bid specifications. The requirement is a relatively new one and imposes the following requirement upon bidders: NOTE: The contractor is required to list the name of the roofing subcontractor on the form of proposal, Section 1C. Section 1C is entitled "Form of Proposal" and includes the following section on page 1C-3 to be filled in by the bidder: The following subcontractors will be contracted with on this project. Type of Subcontractor Name of Subcontractor (Trade Specialty) (Company/Firm) The column on the left side is intended to identify the subcontractor by specialty, such as plumbing or roofing, while the blank spaces in the right hand column are to be filled in by the bidders with the name of the subcontractor who will perform the specialty. The Board has not been consistent in requiring bidders to list the name of subcontractors on the bid documents. According to the uncontroverted testimony of Lincoln, the Board requires the listing of subcontractors on some projects but not on others. For example, on the specifications for the recently let contract for the prototype new media center at four elementary schools, the left hand column on the above form was filled in by the Board with five types of subcontractors who were required on the project, including roofing. This meant that the bidder was to fill in the blanks in the right hand column with the name of the subcontractor who he intended to use on each specialty. However, on other contracts, including the one under challenge, both columns in the Form for Proposal have been left blank, and Lincoln construed this to mean that the name of the subcontractor was not required. Indeed, Lincoln pointed out, without contradiction, that on a recent contract which left both columns blank, as was true in this case, it was awarded the contract even though it did not identify the roofing subcontractor on its proposal. Because of this prior agency practice, Lincoln assumed the same policy would be used again. However, Lincoln conceded it had failed to read the requirement in paragraph 1.1 of section 07511 before preparing its proposal. There was no evidence that Lincoln gained any substantial advantage over other bidders by this omission. Also relevant to this controversy is Paragraph 10A of the General Requirements. This item is found on page 1B-11 and reads as follows: Each bidder shall indicate the names of specific major Subcontractors if called for on the form of proposal. If listing of Subcontractors is required and the Bidder fails to list them, the bid may, at Owner's option, be disqualified. (Emphasis added) This authority to waive the requirement is reinforced by language in Paragraph 21 of the General Requirements which provides in part that "(t)he owner reserves the right to waive minor technicalities." According to the Board's outside architectural consultant, who was the author of a portion of the contract specifications including section 07511, the omission of the name of the roofing subcontractor is a "minor" technicality that can be waived. However, the consultant had no personal knowledge as to whether the provision had actually been waived by the Board on prior contracts.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered awarding the contract in question to Bandes Construction Company. DONE AND ORDERED this 20th day of April, 1989, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 20th day of April, 1989.
Findings Of Fact As project architect under contract to HRS, Greenleaf/Telesca Planners, Engineers, Architects, Inc. (Greenleaf) prepared a project manual (manual). The manual invited contractors to bid on a contract for construction of the forensic services building at the South Florida State Hospital in Pembroke Pines, Florida, project No. HRS-0278. The manual contained specifications for a base contract covering construction of the building itself, and for four alternate additive bids, covering various equipment and furnishings. The first alternate called for installation of mess hall tables and seats. For the first alternate, the manual specified tables and seats manufactured by Folger Adam Company, their model number 522, or "upon prior approval" the equivalent. From the floor plan it is clear that 24 tables and corresponding seats would be required. The language of the manual describing alternate No. 1 presents no particular ambiguity or difficulty. The Folger Adam Company is well known in the construction business. Harold Wayne Blackwell, petitioner's president, used the manual in preparing Blackwell's bid for the contract. Blackwell bid on the base contract and on each of the four alternates. There are seven or eight contract hardware suppliers in Dade and Broward Counties, all of whom have access to Folger Adam Company products. Folger Adam Company does not have exclusive distributors. To determine the price of the tables, Mr. Blackwell telephoned several contract hardware suppliers, including Christensen Hardware Services, Inc. (Christensen). Christensen quoted Blackwell a price of ten thousand eight hundred dollars ($10,800.00) for twenty-four sets of Folger Adam model number 522 tables and seats. Blackwell submitted a bid of eleven thousand dollars ($11,000.00) on alternate No. 1. Forsythe bid on the base bid but did not bid on alternate No. 1, because Forsythe failed to obtain a quote on the tables and seats, before preparing its bid. Richard B. Solomon, Greenleaf's project manager for the forensic services building, opened the bids on March 20, 1979. As tabulated by Greenleaf, the bids were: Base Bid Alt. No. 1 Alt. No. 2 Alt. No. 3 Alt. No. 4 M.D. Forsythe Construction Co. $375,000 $ --- $50,842 $27,220 $33,020 Porfiri Construction Co. 406,200 7,000 45,534 25,315 44,130 Wayne Blackwell and Co., Inc. 397,735 11,000 47,000 25,000 35,000 Ed Ricke & Sons, Inc. 405,000 14,900 52,000 28,300 47,650 McKee Construction Co. 407,000 --- 45,000 28,000 --- L.G.H. Construction Corp. 524,176 18,014 43,464 24,712 35,048 Creswell Construction Co. 394,000 41,000 43,000 23,000 33,000 Petitioner's exhibit No. 2. On the base bid, Forsythe was lowest, Creswell Construction Company next lowest, and Blackwell third lowest. Among contractors who bid on the base bid and all alternates, Blackwell's combined bids were lowest for the base bid plus alternate No. 1, the base bid plus alternates Nos. 1 and 2, the base bid plus alternates Nos. 1, 2 and 3, and the base bid plus alternates Nos. 1, 2, 3 and 4. Mr. Solomon was aware of two telephone calls received by Greenleaf during the time for preparation of the bids, inquiring about the price of the tables and seats. In examining the bids, he noticed that two contractors had not bid on alternate No. 1, and that the base bids as well as the bids on alternates Nos. 2, 3 and 4 were "pretty tight" as compared to the range of bids on alternate No. 1. From looking at the bids on alternate No. 1, it was hard for Mr. Solomon to tell what a reasonable price for the tables and seats was. Mr. Solomon recommended to HRS that the bids on alternate No. 1 be thrown out. Charles Robert Yates, an architect employed by HRS, concurred in Mr. Solomon's recommendation. He was under the impression that funding for the project would not be available unless the contract was let before April 1, 1979. Mr. Yates could not recall such diversity among bids in his thirty-year career, yet he had no difficulty learning what the tables and chairs cost when he called architectural firms to find out. After the bids were opened, Blackwell promptly protested Forsythe's bid. Under the heading of alternates, the manual states: If the Base Bid is within the amount of funds available to finance the construction contract and the Owner wishes to accept alternate additive bids, then contract award will be made to that responsible Bidder submitting the low combined bid, consisting of the Base Bid plus alternate additive bids (applied in the numerical order in which they are listed in the Bid Form). Petitioner's exhibit No. 1, Paragraph B-9, Alternates. HRS wrote Blackwell on April 3, 1979, denying Blackwell's protest and stating, as reasons: M.D. Forsythe Construction Co., Inc. did not ignore Alternate No. 1, but completed that section of their bid by stating "No bids received on this item." Proposals for Alternate No. 1 ran the gamut for "No Bid" to prices extending from $7,000 to $41,000. The Department holds, as concurred in by the attached letter from our consultants, that there was confusion in the marketplace regarding the intent of Alternate No. 1, as attested to by the disparity among the proposals, and therefore we choose not to consider Alternate No. 1. Provisions for this deletion include Sections B-17, B-22 and B-24 of the Contract Documents. Petitioner's exhibit No. 3. HRS then awarded the base contract and additive alternates Nos. 2 and 3 to Forsythe, and gave orders to proceed with construction on May 7, 1979. After construction began, Mr. Solomon wrote Forsythe to inquire what Forsythe would charge to install the tables and seats called for by additive alternate No. 1. Forsythe eventually agreed to do it for eleven thousand dollars ($11,000.00), after first quoting a higher price. On August 1, 1979, Greenleaf prepared a change order at HRS' behest, directing Forsythe to install the tables and seats originally called for by additive alternate No. 1, at a price of eleven thousand dollars ($11,000.00). Other provisions of the manual relied on by the parties include the following: B-17 PREPARATION AND SUBMISSION OF BIDS Each Bidder shall copy the Proposal Form on his own letterhead, indicate his bid prices thereon in proper spaces, for the entire work and for alternates on which he bids. Any erasure or other correction in the proposal may be explained or noted over the signature of the Bidder. Proposals containing any conditions, omissions, unexplained erasures, alternations, items not called for or irregularities of any kind may be rejected by the Owner. . . DISQUALIFICATION OF BIDS Any or all proposals will be rejected if there is reason to believe that collusion exists among the Bidders and no participants in such collusion will be considered in future proposals for the same work. Proposals in which the prices obviously are unbalanced will be rejected. Falsification of any entry made on the Contractor's bid proposal will be deemed a material irregularity and will be grounds, at the Owner's option, for rejection. REJECTION OF BIDS The Owner reserves the right to reject any and all bids when such rejection is in the interest of the State of Florida, and to reject the proposal of a Bidder who is not in position to perform the contract. AWARD OF CONTRACT The contract will be awarded as soon as possible to the lowest qualified Bidder provided his bid is reasonable and it is in the best interest of the Owner to accept it. The Owner reserves the right to waive any informality in bids received when such waiver is in the interest of the Owner. The lowest bidder will be determined by adding to the Base Bid such alternates, in numerical order, as available capital funds will allow. The Agreement will only be entered into with responsible contractors, found to be satisfactory by the Owner, qualified by experience, and in a financial position to do the work specified. Each Bidder shall, if so requested by the Owner, present additional evidence of his experience, qualifications, and ability to carry out the terms of the contract, including a financial statement. Petitioner's exhibit No. 1. At no time did Forsythe attempt to influence the award of the contract improperly. At the time of the final hearing, the project was approximately 95 percent complete.
Recommendation Upon consideration of the foregoing, it is RECOMMENDED: That, in the future, HRS adhere to the letter of language like that contained in paragraph B-9 of the manual whenever such language is used in an invitation for bids. DONE and ENTERED this 6th day of March, 1980, in Tallahassee, Florida. ROBERT T. BENTON, II Hearing Officer Division of Administrative Hearings Room 101, Collins Building Tallahassee, Florida 32301 (904) 488-9675 COPIES FURNISHED: Louis L. LaFontisee, Jr., Esquire 200 South East First Street, Suite 802 Miami, Florida 33131 Leonard Helfand, Esquire 401 North West 2nd Avenue Room 1040 Miami, Florida 33128 Richard Morgentaler, Esquire 1600 North East Miami Gardens Drive North Miami Beach, Florida 33179 =================================================================
The Issue The issues are: (1) whether the Petitioner's notice of bid protest filed on June 5, 1996, was timely under Section 120.53(5), Florida Statutes, and, if not, whether Petitioner has waived its right to participate in bid protest proceedings; and (2) if Petitioner's bid protest was timely filed, whether the Respondent acted fraudulently, arbitrarily, illegally or dishonestly in rejecting the Petitioner's bid.
Findings Of Fact The Petitioner is a general contractor which operates in Alachua County and surrounding areas. The Respondent is the governing body of the school district in Alachua County. In April and May, 1996, the Respondent publicly advertised an Invitation to Bid on the Project which consists of hard courts for basketball, driveway paving and new drainage provisions. Petitioner and three other bidders timely submitted sealed bids to the Respondent at its office located at the E. Manning, Jr. Annex, 1817 East University Avenue, Gainesville, Florida. Petitioner's bid proposal included a Contractor's Qualification Statement setting forth Petitioner's experience and financial qualifications to act as the general contractor for the Project. There is no evidence that Petitioner is disqualified as a responsible bidder because: (a) it colluded with other bidders; (b) it based its proposal on bid prices which were obviously unbalanced; (c) it included any false entry in its bid proposal; or (d) it failed to completely fill out the required list of subcontractors. The Invitation to Bid does not set forth any other specific conditions which would disqualify an otherwise responsible bidder. However, Respondent reserves the right to reject any and all bids when it determines that such rejection is in its interest. Respondent publicly opened the bids and read them aloud at 2:00 P.M. on May 9, 1996 as required by the Invitation to Bid. Petitioner did not attend the opening of the bids. The Invitation to Bid specified that the bids would be "tabulated and evaluated by the Superintendent of Schools of Alachua County or member or members of his staff or other individual or individuals designated by him." Edward Gable is Respondent's Director of Facilities. The Superintendent designated Mr. Gable to evaluate bids received for facility projects and to formulate recommendations to Respondent. The Invitation to Bid does not set forth a time certain in which Respondent will notify bidders of its decision or intended decision. However, it does state as follows: At the next regular or special meeting of the Board or at the designated meeting thereafter, the bids, as so opened, tabulated and evaluated, and the recommend- ation of the Superintendent of Schools of Alachua County regarding them shall be presented to the lowest responsible bidder meeting the requirements of the law and the State Board of Education Regulations. In Section 19.1 of the Instructions to Bidders, Respondent informs bidders that it will award the contract to the lowest bidder as soon as possible provided that the lowest bid is reasonable and in Respondent's best interest. The Invitation to Bid provides bidders with the following notice relative to Respondent's decision or intended decision concerning a contract award: The Board shall provide notice of its decision or intended decision concerning a contract award. Notice shall be given either by posting the bid tabulation at the location where the bids were opened or by certified United States mail, return receipt requested. Failure to file a protest within the time prescribed in s. 120.53(5), Florida Statues, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. Any person who is affected adversely by the decision or intended decision shall file with the Board a written "Notice of Protest" within seventy-two (72) hours after posting or notification. A formal written protest shall be filed within ten (10) calendar days after filing the 'Notice of Protest.' Section 17.1 of the Instructions to Bidders contains the following language concerning Respondent's decision or intended decision: 17.1 The Board shall provide notice of its decision or intended decision concerning a contract award. For any other decision, notice shall be given either by posting the bid tabulation at the location where the bids were opened or by certified United States mail, return receipt requested. Section 18.1 of the Instructions to Bidders provides as follows: Bid tabulations with recommended awards will be posted for review by interested parties at the Planning and Construction Department, 1817 East University Avenue, Gainesville, Florida, following the bid opening, and will remain posted for a period of 72 hours. Failure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes, shall constitute as (sic) waiver of proceeding under Chapter 120, Florida Statutes. The Invitation to Bid and the Instructions to Bidders distinguish between a protest concerning a contract award and a protest related to the specifications contained in an invitation to bid or in a request for proposals. In the latter context, a bidder must file a written protest within seventy-two (72) hours after receipt of the project plans and specifications. This case does not involve a protest of a bid solicitation. By virtue of the above referenced provisions in the Invitation to Bid and the Instructions to Bidders, Respondent gave all bidders sufficient and reasonable notice that a posted tabulation together with its recommendation constituted Respondent's intended decision. The bid specifications in the instant case required bidders to submit a bid on a base contract for certain school facility improvements with alternate bids relative to additional improvements in the event Respondent decided to include such features in the Project. Petitioner's base bid was $135,000; it was the lowest bid submitted. The next low bid was from Watson Construction Company, Inc. (Watson) at $133,345. Two additional bids were higher than Watson's bid. On the morning of May 30, 1996 one of Petitioner's employees, Roger "Dave" Williams" phoned Mr. Gable to inquire about the status of the bid award. Mr. Gable was unavailable to take the call. Mr. Williams left a message for Mr. Gable to return the call. Next, at approximately 10:00 a.m. on May 30, 1996, Mr. Williams called a member of Mr. Gable's staff who stated that, as far as he knew, Respondent had not made a decision on the contract. Mr. Gable completed his evaluation and posted the bid tabulation on May 30, 1996 at 3:00 p.m. Included on the bid tabulation was the following statement: RECOMMENDED ACTION: It is recommended that the Board reject the low base bid as submitted by D. E. Wallace Construction Corporation, Alachua, Florida, due to past unsatisfactory contract performance. It is recommended that the Board accept the base bid of $133,345. and award a contract for construction totaling $133,345. to Watson Construction, Gainesville, Florida. Completion of this project shall be within ninety (90) consecutive calendar days from the date indicated in the 'Notice to Proceed.' The bid tabulation clearly notes that "[f]ailure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes, shall constitute a waiver of proceedings under chapter 120, Florida Statutes." Respondent regularly posts notices of intended decisions concerning bid awards on a bulletin board in the main hallway of the E. D. Manning Annex. A title at the top of the bulletin board identifies it as the location for bid postings. Respondent posts a copy of Section 120.53(5), Florida Statutes, and a copy of the Respondent's Policy DJC--Bidding Requirements below the title of the bulletin board. Respondent has adopted Policy DJC as a rule through a formal rulemaking process. Policy DJC states as follows in pertinent part: The Board shall provide notice of its decision or intended decision concerning a bid solicitation or a contract award. For a bid solicitation, notice of a decision or intended decision shall be given by United States mail or by hand delivery. For any other Board decisions, notice shall be given either by posting the bid tabulation at the location where the bids were opened or by certified United States mail, return receipt requested. The notice shall contain the following two paragraphs. Failure to file a protest within the time prescribed in s. 120.53(5), Florida Statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. Any person who is affected adversely by the decision or intended decision shall file with the Board a written notice of protest within 72 hours after the posting or notification. A formal written protest shall be filed within 10 calendar days after filing the notice of protest. . . . Failure to file a timely notice of protest or failure to file a timely formal written protest shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. Immediately below Policy DJC is a space where Respondent always posts its bid tabulations which include the recommended action on each project and notice that "[f]ailure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes, shall constitute a waiver of proceedings under chapter 120, Florida Statutes." The bottom of the board, in large letters, contains the following words: "Failure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes." This permanent bulletin board, read as a whole, contains more than enough information to provide bidders with notice of an intended decision and the time frames within which a disappointed bidder must file a written protest. Although he was not required to do so, Mr. Gable telephoned Petitioner's office on the afternoon of May 30, 1996 to advise its president, D. Wallace, of the recommendation. Petitioner was not available to accept that call. Mr. Gable placed another courtesy telephone call to Petitioner on the morning of May 31, 1996. During that conversation, Mr. Gable informed Mr. Wallace of the recommendation for Respondent to reject Petitioner's bid and accept the next lowest bid. Petitioner's representative inspected the posting board in the afternoon on May 31, 1996. On June 3, 1996, Respondent sent Petitioner by facsimile transmission a copy of the agenda for Respondent's June 4 meeting, items H.1. of which was: H.1. Bid Award for Project SBAC CB436 - Newberry High School Site Improvements. Bids for the construction of this project were received on May 9, 1996. Recommendation will be presented. The seventy-two hour window in which a bidder may file a protest does not include Saturdays, Sundays or holidays. Therefore, the time in which a bidder could have filed a protest of Respondent's intended decision in this case, expired June 4, 1996 at 3:00 p.m. No bidder had filed a written protest at that time. Respondent held a regular meeting on June 4, 1996, at 7:00 p.m. When Respondent considered the bid award for Project SBAC CB 436, Mr. Gable presented the recommendation that the Board reject Petitioner's bid and accept Watson's bid due to Petitioner's past unsatisfactory contract performance. Petitioner's counsel spoke against the recommendation. At that time the Petitioner had not filed any written notice of protest. After discussion, Respondent voted to award the contract to Watson. Respondent and Watson executed a contract for the construction of the Project on June 4, 1996. The next day, on June 5, 1996, at 3:40 p.m., Petitioner filed with Respondent, by facsimile transmission, a Notice of Protest challenging the award of the contract for the Project to Watson. The filing of this protest was untimely. Therefore, Petitioner waived its right to protest Respondent's decision or intended decision on the Project. The basis of Respondent's intended decision and ultimate final decision to reject Petitioner's low bid was due to Petitioner's past unsatisfactory performance. The following facts support a finding that Petitioner was not a responsible bidder. Respondent awarded Petitioner the contract for a previous construction project, Project SBAC CA 149, Additions and Renovations for Terwillegar Elementary School. That project included the construction of a number of school buildings. The contract amount was approximately 5.1 million dollars. The last building in the Terwillegar project became "substantially complete" in September, 1995. In January, 1996, Mr. Gable wrote a letter to Petitioner, informing him of the outstanding punch list items for the Terwillegar project. A contractor must complete punch list items and have them approved prior to "final completion." In the Terwillegar Project, the contract provided for compilation of items on the punch list within thirty (30) days from "substantial completion." As of May 30, 1996, Petitioner had not responded to Mr. Gable's letter about the Terwillegar punch list, nor had it completed the punch list. Many of the items on the list were minor, but some of the items involved the safety or integrity of the building structure. The Terwillegar project contract also contained a project closeout section which listed a variety of documents and other materials that Petitioner had to provide to Respondent as part of the "final completion." Included in the Terwillegar project's closeout were items such as insurance change-over requirements, warranties, workmanship bonds, maintenance agreements, final certifications, a final payment request, consent of surety, maintenance manuals, record drawings, record specifications, record project date, and operating instructions. As of May 30, 1996, Petitioner had not provided any of the Terwillegar project closeout materials to the Respondent. The delay in project closeout, after substantial completion, is completely unacceptable to the Respondent. Prior to the opening of bids in this case, Petitioner filed a civil suit against Respondent seeking approximately $1,500,000 representing the unpaid contract balance, subcontractors' and material suppliers' claims for labor and material, and other delay-related damages on the Terwillegar project. Petitioner's claim that Respondent's intended decision and/or final decision was based on personal animosity and bias against Mr. Wallace is contrary to more persuasive evidence. Specifically, Petitioner's Exhibit 6 is not persuasive evidence of bias. The Petitioner's president, D.E. Wallace, has over 30 years in the construction field, including 22 years as an owner/operator of a general contractor company. He has completed more than 100 projects in north Florida in the past eighteen (18) years, including 30 school board construction projects. Mr. Wallace has worked on approximately nine (9) school board projects in Alachua County. He holds himself out as being "completely familiar and knowledgeable in government and building codes, ordinances, regulations, etc."
Recommendation Based upon the findings of fact and the conclusions of law, it is, RECOMMENDED: That the Respondent enter a final order dismissing the Petitioner's protest as untimely. DONE and ENTERED this 9th day of October, 1996, in Tallahassee, Leon County, Florida. SUZANNE F. HOOD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 9th day of October, 1996. COPIES FURNISHED: David L. Worthy, Esquire 4128 Northwest 13th Street Gainesville, Florida 32609 Thomas L. Wittmer, Esquire 620 East University Avenue Gainesville, Florida 32601 Robert W. Hughes, Superintendent Alachua County School Board 620 East University Avenue Gainesville, Florida 32601-5498 Frank T. Brogan, Commissioner Department of Education The Capitol, Plaza Level 08 Tallahassee, Florida 32399-0400
The Issue The issue addressed in this proceeding is whether Petitioner or Intervenor submitted the lowest and best bid on Project No. RS-40.
Findings Of Fact On June 4, 1993, Respondent issued an invitation to bid (ITB) for Project No. RS-40 to develop the site for the future construction of a work camp in Holmes County. The work under Project No. RS-40 specifically included site preparation, grading, electrical work, sewage, utilities and fencing. The bids were due to be opened on June 29, 1993. Ten bids were submitted to the Department, including Petitioner, Panhandle Grading and Paving, Inc., and Intervenor's, Hewitt Contracting Co., Inc., bids. Panhandle's bid total was $815,734.00, and was the lowest monetary bid. Hewitt's bid total was $847,554.00, and was the third lowest monetary bid. Baxter Asphalt had the second lowest monetary bid. However, both Baxter and Panhandle's bids were disqualified as nonresponsive because neither company complied with the Department's prequalification requirements. Baxter did not protest the Department's bid award to Hewitt and Baxter is not a party to this action. On the other hand, Hewitt's bid was accepted since Hewitt had complied with the Department's prequalification requirements and was otherwise responsive to the ITB. Therefore, the Department awarded Hewitt the contract for Project No. RS-40 since in its opinion Hewitt was the lowest responsive bid on the project. The ITB clearly notified potential bidders that they must prequalify with the Department. The ITB stated, in pertinent part: All bidders must submit evidence that they are qualified to perform the work in accordance with Section B, paragraph B-2 of the specifications. Evidence of eligibility must be submitted to the owner (defined in article B-1) not later than five (5) calendar days prior to bid date. Additionally, the cover sheet for the bid documents admonished all bidders to submit evidence of their eligibility to bid to Respondent at least five (5) days before the bid letting. The cover sheet stated: All bidders on this project must prequalify according to the provisions of section B, "Instructions to Bidders", article B-2. Evidence of eligibility must be submitted to the owner (defined in article B-1) not later than five (5) calendar days prior to bid date. Section B-1 of the bid documents defines the owner of Project RS-40 as the Department of Corrections. Section B-2 of the bid documents instructed all bidders to prequalify with Respondent to participate in the bid process. Section B-2 states: Prequalification: Each bidder whose field is governed by Chapter 399, 489, and 633 of the Florida Statutes for licensure will be prequalified by the Department to participate in the bid process for a specific field or area of construction based on the bidder's area of license or certification. Bidder qualification requirements and procedures are established by the State of Florida, Department of General Services rule (Chapter 13D-11, Florida Administrative Code) and by the bidding conditions and specifications. Failure of the bidder to strictly meet and follow all such requirements and procedures may result in bid rejection or disqualification for contract award. For the bidder's convenience, the provisions of Rule 13D-11.004 Bidder's Qualifications Requirements and Procedures are set forth below. Requirements: Each potential bidder must present, or have presented within this current biennium (July 1 through June 30) odd number years, evidence that: He is authorized to perform the work required by these documents in accordance with the applicable provisions of Florida Statutes governing contractors, as a general (Insert contractor designation) contractor. If the Bidder is a corporation, he must submit evidence that this corporation is properly registered with the State of Florida, Department of State, Division of Corporations, and holds a current State Corporation Charter Number in accordance with the Florida Statutes. (*This sentence to be deleted by Architect- Engineer if not applicable.) All interested firms who have NOT qualified within the current biennium (July 1 thru June 30) odd number years must submit evidence of their eligibility during the bidding period, not later than five (5) calendar days (received date) prior to the bid date. The Owner may, for good cause, allow a firm to correct any deficiencies in evidence submitted. Notice of qualification will be mailed to each bidder, but a Bidder may not receive the written notification prior to a bid opening. He may learn his status prior to the bid opening time by calling the Owner (Department of Corrections), Bureau of Facilities Services at 904-487-1330). The Bidder shall submit the required evidence of eligibility to the Department of Corrections, Bureau of Facilities Services, 2601 Blairstone Road, Tallahassee, Florida 32399-2500. (emphasis supplied) All information shall indicate the full name, address and telephone number of the individual, partnership, or corporation, and the name of the contact person. Include a self-addressed stamped envelope. The names of all bidders will be checked against the list of contractors who have prequalified in accordance with the requirements of Section B-2. Additionally, a careful reading of Rule 13D-11, Florida Administrative Code, reveals that the information required under the Rule should be submitted to the owner of the project involved in the bid process, i.e. the Department of Corrections in this case. A contractor is the person who is qualified and responsible for an entire project and includes the person who submits a bid for a given project. Section 489.105(3), Florida Statutes. A general contractor is a person who is unlimited as to the type of work they can do, unless a specific type of license is required by Chapter 489, Florida Statutes. Section 489.105(3)(a), Florida Statutes. See also Section 489.113, Florida Statutes. Under Chapter 489, Florida Statutes, a contractor can be a certified general contractor or a registered general contractor. A certified general contractor can contract in any jurisdiction in the state without fulfilling the competency requirements of the local jurisdiction. Section 489.105(8), Florida Statutes. On the other hand, a registered general contractor is required by Section 489.117(2), Florida Statutes, to comply with all local licensing requirements. Registration with the state is specific for a given local jurisdiction and cannot be used in another jurisdiction. Section 489.113(2), Florida Statutes. In fact, Section 489.113(1), Florida Statutes, requires a contractor to be registered for a specific jurisdiction prior to engaging in the business of contracting. Additionally, a contractor must subcontract electrical, mechanical and plumbing work unless the contractor is state certified or holds the specific trade license required by the appropriate local authority if such a local license is required. Section 489.113(3), Florida Statutes. Importantly, Chapter 489, Florida Statutes, permits a person to act as a prime contractor, including submitting a bid on a project, where the bulk of the work under the contract is covered by the contractor's specific license, as long as the parts of the project for which he is not licensed are subcontracted to persons holding an appropriate license. Section 489.113(9), Florida Statutes. Respondent requires prequalification of contractors in advance of its bid lettings to ensure that everyone who bids is legally or financially qualified to do the work required in the bid. The five (5) day deadline prior to the bid letting gives Respondent's staff an opportunity to resolve any irregularities in a bidder's prequalification materials prior to the letting. Indeed, if a contractor is state registered, as opposed to state certified, Respondent's staff, prior to the bid, routinely contacts the local government with jurisdiction over the building site to determine if there are any local licensing requirements and if there are, to determine if the bidder/contractor is locally licensed in that jurisdiction. This process avoids the waste of time involved in reviewing a bid package from a bidder who cannot ultimately perform the work called for in the bid. More importantly, this process prevents a locally unlicensed registered contractor from having the ability to void a contract at its will after the bids are opened since it would be unlawful for the contractor to have either bid on a project located in a jurisdiction where the contractor was not licensed or enter into such a contract. The ability to refuse an award of a bid clearly constitutes an unfair advantage to the locally unlicensed registered contractor and could not be waived as immaterial by an agency. In this case, Hewitt is a certified general contractor and is therefore automatically qualified to work in Holmes County. Panhandle is a registered general contractor and can only bid on Project RS-40 if it has met the requirements for general contracting in Holmes County. The prequalification process requires a bidder who has not prequalified with Respondent during the current biennium to submit to Respondent his current state contractor license certification or registration, as well as his current corporate charter registration (if a corporation). When Respondent opened the bids for the Project, Petitioner had neither prequalified with Respondent nor obtained a license or certification of competency to engage in contracting work in Holmes County. Petitioner thought it was already prequalified under its prequalification with the Department of Management Services. However, prequalification with the Department of Management Services does not meet the requirements of the ITB which requires prequalification with the Department of Corrections. Panhandle did obtain the necessary licensure after submitting its bid and after the bids were opened. However, such belated licensure does not negate the unfair advantage created by Panhandle's failure to prequalify and be properly licensed prior to the bid opening as required by the bid documents.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent issue a Final Order in this case dismissing Petitioner's formal protest and awarding the contract for the Project to Intervenor. DONE AND ENTERED this 4th day of October, 1993, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of October, 1993.
The Issue The issues to be resolved in this proceeding concern whether the Petitioner, D. J. Haycook Construction Company (Haycook) was the lowest responsive bidder for an elementary school procurement project known as Elementary School "X," let by the Volusia County School Board and whether the Petitioner should have been awarded the contract.
Findings Of Fact On June 13, 2003, the School Board of Volusia County authorized the issuance of a request for proposal for the construction of a new elementary school known as Elementary School "X." The proposed new school would be located in Orange City, Florida. The school board issued an advertisement for the construction of Elementary School "X" and had it published. The project architect for the Board prepared the solicitation documents constituting a "Phase III specifications" manual and three addenda. The advertisement stated that "the school board expressly reserves the right to reject any and all bids and to waive informalities therein, and to use sufficient time to investigate the bids and the qualifications of the bidders." Section 00430 of the solicitation required that all bidders list the name of the subcontractor for each type of the 12 areas of construction work for Elementary School "X" as follows: 'For each type of work' below, list the name of the subcontractor. List only one name on each line and only one subcontractor for each type of work. Various 'type of work' sub-contracts may have more than one subcontractor (re: roofing; metal roofing and membrane roofing), list each subcontractor accordingly. Use additional sheets, if required. Additionally, Section 00430 provided: The term subcontractor as used herein shall be defined in 2001, Florida Statute 713.01(27) - subcontractor means a person other than a materialman or laborer who enters into a contract with a contractor for the performance of any part of such contractor's contract. The deadline for submission of proposals in response to the solicitation was August 6, 2003. On August 6, 2003, Haycook's bid proposal and that of the second and third lowest bidders were opened and read by the members of the school board's staff. Haycook listed itself as performing or "self-performing" in areas of earthwork, masonry, concrete, and structural steel on the required list of subcontractors form pursuant to section 00430 of the solicitation. Subsequently, the project architect began to investigate the bids for the project. This was done through correspondence and direct contact between Haycook, the project architect, Mr. Daimwood, and the school board staff. This process began on August 8, 2003. As part of the evaluation process the architect verbally requested documentation from Haycook to verify its past and present abilities to self-perform in the four areas of earthwork, concrete, masonry, and structural steel, as well as by letters dated August 12, August 15, and August 25, 2003. Haycook responded to these information requests by letters of August 11, 13, and 28, 2003. The bid documents for the school project included the bidding and contractual conditions, general conditions, technical specifications, and the drawings listed on pages 10D-1 to 10D-2. In order to have a responsive bid a bidder was required to comply with the bid documents when submitting its bid. The relevant bid documents at issue in this dispute are Section 0020, "invitation to bid," Section 00100, "instruction to bidders," Section 00300, "bid form," and Section 00430, "list of subcontractors." The bid documents also required each bidder to deliver a bid bond in the amount of five percent of its bid to accompany the proposal. After acceptance of the lowest responsive bid, and issuance of the contract award, a bidder was required to deliver a payment and performance bond in the amount of 100 percent of the contract price. There is no dispute that Haycook has a bonding capacity of 18 million dollars for a single project and 35 million dollars for aggregate projects and the bonding capacity is not in dispute. The invitation to bid documents require that bidders be required to hold a current Certificate of Pre-Qualification issued by the school board at the time of bid opening. Haycook at all material times hereto held a Certificate of Pre- Qualification and was licensed to perform all work called for by the bid documents including, among others, self-performance of earthwork, concrete work, masonry, and structural steel. The three bids received were in the amounts as follows: (1) D. J. Haycook Construction Company: a base bid of $7,599,000.00; Alternate One, $189,000.00; Alternate Two, $48,800.00; Alternate Three, $21,000.00; (2) Mark Construction Company of Longwood, Florida: base bid of $7,657,000.00, Alternate One, $221,000.00; Alternate Two, $50,000.00; Alternate Three, $20,000.00; (3) Clancy and Theys Construction Company of Orlando, Florida: base bid of $7,840,000.00; Alternate One, $230,000.00; Alternate Two, $50,000.00; Alternate Three, $21,000.00. Section 00430 required each bidder to furnish a list of subcontractors defined as quoted above in the bid form. Section 00430 of the bid form also permitted a bidder to list itself as a subcontractor. The form provides: "A contractor may not list himself as performing a type of work unless he is self- performing and is a Florida licensed contractor for that type of work". Haycook was properly licensed at the time of bidding, and at all relevant times, to self-perform in the four areas of earthwork, structural steel, masonry, and concrete at issue in this case. After the bids were opened and examined, Mr. Daimwood, the architect evaluating bids for the school board, requested that Haycook furnish a list of past projects where it had self- performed earthwork, structural steel, masonry, and concrete work. Haycook provided a list of examples of prior projects for which it had self-performed work in those areas on August 11, 2003. The list included five projects for earthwork, four projects for structural steel, seven projects for masonry, and seven projects for concrete. Thereafter, on August 12, 2003, the architect requested additional information regarding self- performance of work in the four areas at issue. Haycook provided the architect with the requested additional information on August 13, 2003, including a list of each project, the total cost of each project, the completion dates, as well as contact persons with their telephone numbers and including copies of qualifications of the subcontractors listed on Haycook's subcontractor list. On August 25, 2003, the architect requested Haycook payroll records and workers compensation information for two of the listed projects of those Haycook had provided, that for Goldsboro Elementary School and Eustis Elementary School. On August 28, 2003, Haycook sent a letter to the architect explaining that on the Goldsboro job the earthwork was self-performed by a combination of supervising and directing the work with salaried employees, with leasing of labor from an employment service, and hiring of labor by the cubic yard with a cap on the activity. Haycook also explained that structural steel work on the projects was self-performed by a combination of supervising and directing the work with salaried employees, leasing of labor from an employment service, hiring of labor paid by the foot to erect specific components of the job, as well as using salaried employees for the performance of specific activities, and including purchasing of fabricated materials and then hiring crew labor and equipment on an hourly basis to erect them. In the August 28, 2003, letter Haycook also explained, with respect to the self-performed masonry work on both the Eustis and Goldsboro jobs, that those areas of work were self- performed by purchasing fabricated material, supervising and directing the work with salaried employees, hiring labor by the unit price (for instance by the block) to lay the block, and hiring labor from an employee leasing service for specific activities as to those jobs. Haycook also explained in the August 28, 2003, letter that a combination of the methods and means of performing delineated above and in that letter would be used for the activities listed on the subcontractor list on the relevant bid form for Elementary School "X". Haycook explained that it had priced and used its own costs for the activities listed on the bid form to arrive at the bid price for Elementary School "X". Enclosed with the August 28, 2003, letter from Haycook were copies of its purchase orders and cost journals for the Goldsboro School, concerning earthwork, masonry, and structural steel activities and its vendor purchase orders and cost journals for the Eustis Elementary School's masonry work done by Haycook. The enclosures with the August 28, 2003, letter showed that Haycook had purchased the materials, performed the work with its own employees, and performed work using additional outside labor in the areas of structural metals, prefabricated structures, earthwork, cast-in-place concrete, structural steel erection, and masonry work. Haycook also provided its proposals used on the Goldsboro project which consisted of concrete labor and structural steel labor. The architect interpreted the term "self-performance" to mean labor with the contractor's own employees only. Based upon that restrictive interpretation, he concluded that he had not found adequate information demonstrating Haycook's having "self-performed" these types of work previously. Additionally, the architect opined that Haycook's intended self-performance on Elementary School "X" project at issue, in the four work areas in dispute, "is in our opinion, a subcontractor format." Uncontroverted evidence adduced at hearing established that Haycook has extensive public school construction experience. The Petitioner's President, Dennis Haycook, has built more than 35 public schools and Haycook's project manager, Reed Hadley, who is assigned to the Elementary School "X" project, has built over 25 school projects. Dennis Haycook was also a principal of Mark Arnold Construction Company in the past, which was one of the largest public school contractors in Florida. In the past 10 years, with his own company, the Petitioner, Haycook, has built numerous school projects including the Goldsboro school which was a $7,000,000.00 project. The Goldsboro, Eustis, and other Haycook-built schools referenced during the hearing and in the evidence were all projects that were built within the authorized budget, were timely, and were of quality construction. The Board ultimately rejected Haycook's bid on Elementary School "X" because of the architect's interpretation concerning "self-performance," i.e. that all work must be performed by employees on Haycook's payroll. The bid documents did not define "self-performance," nor do the bid documents require that labor used must be on the contractor's payroll in order for his performance to constitute "self-performance." Haycook's witnesses were consistent in their testimony as to the definition of "self-performance": "self-performance," as customarily used in the construction industry, includes the contractor's purchasing of materials, performing part of the work with its own labor force, providing other labor not on the contractor's payroll, and directly supervising the work with the contractor's supervisory personnel. The term "subcontractor" is defined in the custom and usage of the construction industry, however, to mean someone or an entity that provides all labor, material, and equipment necessary to do the complete operation, as well as all supervision. It is more of a "total turn key operation." A subcontractor provides everything necessary to finish the work, including supervision, and then merely answers to the general contractor in terms of responsibility for the quality of the job and its timeliness. The school board's witnesses, expert and otherwise, gave interpretations of the concept of self-performance which were somewhat conflicting. Mr. Daimwood, the architect, opined that self-performance requires the contractors to use employees on its own payroll and make direct payment of workers' compensation for such employees. His opinion was that anything else would be a subcontractor relationship and not self- performance. He later testified, however, that paying labor not actually on Haycook's payroll could still constitute self- performance. Patricia Drago, of the school board staff, testified that if a contractor uses 10 employees on his payroll and uses 10 non-employees, this would be self-performance. If such a contractor has 10 employees and uses 11 non-employees, she was not sure whether this would constitute self-performance. Allen Green testified that self-performance of an area of work requires the majority of that work to be performed by the contractor's own employees, while other work could be performed by contract labor. He later changed his definition to require a contractor to have all employees on the payroll in order to self-perform. In other testimony, however, Mr. Green opined that if a contractor supplemented his labor with a couple of additional masons and paid them by the piece, then he would no longer be self-performing. At still another point in his testimony he added that it would be dependent upon the stage of the project as to whether the contractor's use of contract labor is self-performing or subcontracting. He felt that if the contractor adds some additional masons near the end of a job, as opposed to the beginning, then he could still be self- performing. Gary Parker is the Director of Facilities for the Lake County School Board. He testified that from his perspective, self-performance required the use of employees on the contractor's payroll. This definition, however, was not consistent with Lake County's course of conduct with the job that Haycook performed. Mr. Parker acknowledged that there had been no complaints by the architect or anyone else associated with the Eustis school project where Haycook listed itself as self-performing for masonry work, even though Haycook had retained a different entity to perform masonry labor (although not supply materials or supervision). Scott Stegall, the Director of Capital Outlay for the Seminole County School Board, testified that self-performance would require a contractor to perform all work without the use of outside contractors, including labor. Yet Mr. Stegall acknowledged that Haycook listed itself as self-performing masonry work on the Goldsboro school project and used a firm or entity known as Webber and Tucker to perform some masonry work, and that the Seminole County School Board had no dispute with this approach. Mr. Stegall's evaluation form for Haycook had stated that Haycook did not improperly substitute any subcontractors from the submitted list in that project. He later changed his definition of self-performance to acknowledge that a contractor could bring in laborers individually to perform without a "formal contract"; these informal labor contracts would not take it out of the self-performance category according to Mr. Stegall. The evidence concerning the Lake County District's and Seminole County District's experience as to the Eustis school project and the Goldsboro school project with Haycook's performance, including Haycook's approach to self-performance, was satisfactory in terms of pricing and the quality and timeliness of the work performed. The perceived fear by the Respondent that Haycook's performance might be substandard or that it might "bid shop" amongst potential subcontractors, after the bid opening, if Haycook did not list all subcontractors on the bid response, and self-performed in the manner Haycook described in its evidence, has not been shown to have occurred with regard to any of Haycook's past projects. There has been no demonstration by preponderant evidence that the use of only subcontractors listed or named in the bid response has resulted, in itself, in a lower price or better performance for the public by a contractor situated as Haycook. The architect testified that one method of defining "self-performance" is to determine whether the entity performing work was a subcontractor as defined by the bid documents. If the work is not being performed by a subcontractor, then it is being performed by the general contractor or self-performance. As the term is used in the construction industry, a subcontractor generally furnishes materials, installs the work, and supervises its own work. The bid documents define subcontractor as follows: "subcontractor means a person other than a materialman or laborer who enters into a contract with a contractor for the performance of any part of such contractor's contract." Preponderant, credible, and substantial evidence was presented by Haycook to show that Haycook's use of the term "subcontractor" was an entity that furnishes the materials, provides the labor, and the supervision, and undertakes the entire responsibility for that type or phase of the work. When a general contractor hires contract labor only, this excludes what is occurring from the definition of subcontractor, since the definition of subcontractor prevailing in this proceeding based upon the bid documents, takes out of that subcontractor definition "a materialman or laborer." The preponderant credible evidence shows that when Haycook purchases materials and provides the labor, whether or not the labor is on Haycook's payroll, which Haycook then directly supervises, this, by definition, is not a subcontractor situation under the definition of that concept in the bid documents themselves. The bid documents provide no definition for self- performance, but simply contain the following requirements: "a contractor may not list himself as performing a type of work unless he is self-performing and is a Florida licensed contractor for that type of work." Therefore, if a contractor meets these two requirements, he is responsive to this specification concerning when subcontractors should be listed or need not be listed in the bid response. Haycook meets both of the two requirements for self- performing. Haycook's definition of self-performing work is consistent with and does not conflict with the definition of "subcontractor," which excludes materialmen and laborers. Haycook's expert witness, Mr. Harold Goodemote, is a general contractor with 20 years experience, including 8 years as a project engineer and chief estimator for Foley and Associates Construction Company for many public school projects in the Orlando, Melbourne, and Daytona Beach area. Mr. Goodemote is also Vice-President of "Coleman-Goodemote" which has been in existence for approximately 10 years and has built projects worth multi-millions of dollars for Daytona Speedway related entities. It was established through Mr. Goodemote's testimony that it is customary in the construction industry to self- perform work by the contractor's purchasing of materials and using the contractor's own employees, along with "third party labor," to complete work under the direct supervision and control of the general contractor. The testimony of Mr. Reed Hadley and Mr. Haycook likewise establishes that it is common practice in the construction industry to self-perform work in the manner in which Haycook has performed it in the past. For example, both the Lake County and Seminole County School Boards allowed Haycook to list itself as self-performing where Haycook purchased masonry materials and used contract labor to install the masonry materials and components. "Bid shopping" is a practice whereby a contractor submits a bid for a project and, after winning the bid, goes to its subcontractors or even to new subcontractors, not considered in the bid process, and attempts to get lower prices from them, versus the prices the contractor had when it submitted its bid. This allows more profit to be built into the job for the contractor or, if the contractor artificially bid low in order to get the job, tends to allow the contractor to restore profit to the job for itself. The school board's rationale for requiring pre-bid opening listing of subcontractors is to prevent bid shopping after the bid is awarded in order to protect the competitive integrity of the bidding process. The listing of subcontractors is a practice of the Volusia County School Board and some other school boards in Florida. Ms. Drago, in her testimony, acknowledged that a substantial number of school boards in Florida do not require a list of subcontractors to be provided with bid proposals, and she acknowledged that this does not mean that those school boards' bid processes lack credibility and competitive integrity. She was unaware of any examples in the Volusia County School Board's experience where a contractor listed itself as self-performing and then shopped subcontractors after the bid opening to obtain a better price. The preponderant evidence of record does not establish that this has been the case with Haycook or other contractors on past Volusia County School Board jobs. This is in accord with Mr. Haycook's testimony, who described the detrimental effects such a practice could have on future relationships between a contractors and subcontractors in terms of having them available for later jobs, if a contactor became known for "beating down" subcontractors' prices. If a contractor had a reputation for engaging in that practice, in the future subcontractors' bids to that general contractor would likely be higher, if he could get their bids, and this might result in that contractor having difficulty rendering bid proposals that were low enough to have a chance of being successful. The bid documents give the school board the right to determine if each subcontractor listed by the bidders is qualified to perform the work and if not, to reject that subcontractor and require a replacement subcontractor. It is noteworthy that neither the architect nor the school board rejected Haycook as being unqualified to perform the work in any of the areas in which Haycook, in effect, listed itself as the subcontractor. The bid documents do not provide that the school board may reject "sub-subcontractors" engaged by a subcontractor, nor does the school board examine the history and capabilities of sub-subcontractors that a subcontractor intends to use. Once a subcontractor is acceptable to the Board, there is no further review to determine what means, methods, and procedures the subcontractor uses to perform the work. The subcontractor can contract out all of the work to sub-subcontractors who are actually performing the work, and the Board might not even be aware of it. Therefore, its method or rationale of listing subcontractors and then investigating the subcontractors is no guarantee of ensuring quality of work. In fact, the more areas of work that the general contractor does itself, the more direct control over performance the school board would have. The school board apparently uses a different approach in the instance where a general contractor lists itself as a subcontractor for one or more types of work, i.e. is self- performing. The Board's practice in that situation requires the general contractor to list each contractor who may perform parts of the work. Therefore, the general contractor must list each contractor who will perform the work in each area while this standard is not applied to listed subcontractors. The bid documents do not disclose to bidders the school board's unwritten definition and interpretation of "self- performance." They do not reveal that under the Board's interpretation a contractor must self-perform only with employees on its payroll; that a pre-qualified contractor licensed to perform work in a given area must prove that it has self-performed such work in the past with its own employees only; that general contractors will be treated differently from subcontractors on the subcontractors list, as to the listing of contract labor, and that even though the term "subcontractor" in the bid documents excludes "materialmen" and "laborers," the school board still considers contract labor as a subcontractor or subcontracting, that must be listed for self-performance work. Haycook has substantial experience in bidding and performing work on public school projects, as does Mr. Haycook himself, with both Haycook and a prior company with which he was associated. Haycook had prepared a bid three or four months earlier on a prototype school project similar to Elementary School "X" and had extensive cost information obtained from its work on that project and from subcontractors, including those "bidding" Elementary School "X." Haycook maintains a large database of subcontractors and suppliers experienced in performing work and portions of the work necessary for the Elementary School "X" project, including cost information. It has a database of over 3,000 names useful in obtaining and providing labor for use on parts and subparts of any self- performed work. Prior to the bid, Haycook received the plans and specifications enabling it to determine the quantities of materials needed and the costs per unit for installing the materials and performing the necessary work. Haycook had received subcontractor bids in each of the four areas that it later determined it would self-perform (earthwork, structural steel, concrete, and masonry). Because Haycook's "takeoffs," historical pricing information and recent bid information from another Volusia County prototype school indicated that it could self-perform the work at less cost than using the bids of subcontractors in those four work areas, Haycook elected to self-perform the work and listed itself as the subcontractor in those four work areas. This was not a case where Haycook simply ran out of time to get subcontractors' bids in those four work areas and therefore simply listed itself as performing in the four work areas at issue due to time expediency. It was also not because Haycook intended listing itself as performing in the four subject work areas so that it would create an opportunity to get lower bids from unknown subcontractors after bid opening, in order to enhance its profitability and support a low bid, in terms of putting enough money in the job for itself. As general contractor for the entire project, Haycook intended to provide general supervision of the entire project including subcontractors. With respect to self-performed work, Haycook intended to supply materials and components and to directly supervise and control the means, methods, and procedures of the self-performed work with contract labor. Haycook's definition of "self-performance" for earthwork involved Haycook's renting equipment, retaining contract laborers to clear the site, place the fill (paid by the hour or by the yard), compact the fill, and grade the site. Haycook directly supervises self-performed work and schedules and manages it with Haycook's project manager and on-site superintendent. The testimony of Reed Hadley and Dennis Haycook on behalf of Haycook established that Haycook had self-performed earthwork on other projects in the same manner as described above, satisfactorily for the owners. Specific project names and other project information showing earthwork self-performance by Haycook was provided to the architect as referenced above. Mr. Haycook established that Haycook had "self-performed" earthwork on 50 to 60 percent of its projects in the past. Haycook's definition of self-performance of structural steel included engaging a licensed fabricator, as required by the bid specifications in this instance, hiring experienced labor erection crews, purchasing the materials and component parts, and directly supervising and managing the work, including scheduling of the labor crews. Haycook had performed structural steel on 10 to 15 percent of its past projects. Four examples of projects, self-performed in structural steel, were provided to the architect along with related detailed information. Haycook's self-performance of concrete work included its purchasing of materials, hiring contract labor for footings, paid by the lineal foot, and concrete slabs paid by the square foot, and directly supervising, coordinating, and scheduling the concrete work activities with Haycook's own project managers and superintendent. Haycook has self-performed concrete work on approximately 80 percent of its past projects. The architect was provided a project listing of self-performed concrete work and detailed information showing Haycook's experience in this area. Concrete work is the area of work most commonly self- performed by general contractors in the construction market area in and around Volusia County. Haycook's self-performance of masonry includes Haycook's purchasing of concrete blocks, and reinforcing steel placed within the block, hiring labor on a unit price basis to install it (as, for instance, paid by the block laid), directly supervising the work, and coordinating and scheduling the masonry work activities with Haycook's project manager and superintendent. Haycook has self-performed masonry on approximately 70 percent of its past projects. The architect was provided examples of projects listing self-performed masonry work by Haycook, as well as detailed information depicting Haycook's experience in this work area. Mr. Goodemote, as referenced above, is a local general contractor with school board project experience and is Haycook's expert witness. He established that it is common practice in the construction industry in the Volusia County area for contractors to self-perform work in the manner that Haycook had self-performed it in the past and proposes to do on Elementary School "X." He established with reference to the Board's definition of "subcontractor," which excludes "materialmen" and "laborers," that a contractor's purchase of materials and the hiring of contract labor to install the materials does not come within the definition of "subcontractor" or "subcontracting." He established that a subcontractor is the one who provides all labor, material, equipment, and supervision necessary to complete a work operation. "It's a total turnkey operation. They provide everything to finish the work." Mr. Goodemote's opinion establishes that "self-performance" of the subject work includes a general contractor hiring contract labor to perform a part of the work, because many times there are multiple vendors associated with a portion of the work, and the contractor is still directing and supervising the work and assuming all the risks associated with the work. Mr. Goodemote himself has self- performed as a general contractor and observed other contractors self-perform earthwork, masonry, concrete work, and structural steel work. He demonstrated that if a general contractor uses contract labor to perform a portion of the work, it still remains a "self-performance" by the general contractor, and that the laborers do not have to be on the contractor's payroll in order for the work to constitute self-performance, according to the general practice and usage in the construction industry. When requested by the architect to provide examples of past projects that it had self-performed in the four subject work areas, Haycook listed five projects as to earthwork; four projects in structural steel; seven projects as to masonry; and seven projects as to concrete. In consideration of his restrictive view of what self-performance means (i.e. that self- performance can only mean performance of work by salaried employees on the general contractor's own payroll), the architect (evaluator) requested payroll records and workers' compensation information on two projects only, the Goldsboro Elementary School and Eustis Elementary School. The bid documents do not provide unbridled discretion in the architect/evaluator, or in the school board, to define self-performance in a manner not provided for or inconsistent with the bid documents or to define "subcontractor," to include contract labor and thus require the labor to be listed as a subcontractor on the bid response. There was no notice to any of the bidders that such a restrictive definition would be employed, nor that a contractor listing itself as self- performing, and therefore standing in same position as other subcontractors as to the areas of work it would self-perform, would be treated differently from other subcontractors by, in effect, having to list such persons or entities as those providing contract labor as "sub-subcontractors." There was no evidence that the architect was provided sole discretion to verify self-performance experience as to the two projects only and ignore verification information of self-performance as to the other listed projects provided by Haycook. Although the architect and the Board contended that Haycook's listing of itself as self-performing in the four work areas at issue might allow Haycook to "buy out" subcontractors or to "bid shop," there was no evidence offered to substantiate that this was Haycook's intent or that Haycook or any other identified contractor in Volusia County or the surrounding area had ever attempted to "buy out" subcontractors on Volusia County school projects. Contrarily, Mr. Haycook testified that he does not engage in a practice of "buying out" subcontractors after he has obtained contracts with a winning bid. He explained, as referenced above, that subcontractors and the business relationships that he has with them are crucial to the success of his business. If Haycook made a practice of engaging in such inappropriate operational and pricing conduct when bidding for projects, or entering into related contracts, then subcontractors would either elect not give bids to Haycook at all when Haycook was, in the future, attempting to formulate bid responses, or would not give Haycook their lowest or best price because of their knowledge of such a practice, if Haycook engaged in it. This would obviously have an adverse effect on Haycook's ability in the future to be successful in competitive bid procurements or projects. Haycook has self-performed in the manner intended as to Elementary School "X" for years, as have his competitors. Although the Board apparently feared that Haycook's listing itself as self-performing in the areas of work in question gave it a competitive advantage over other bidders, the evidence does not bear out that fear. The competing bidders had the same opportunity to look at their past cost knowledge and experience, their knowledge of materialmen and suppliers in the area, their knowledge of the labor market and available labor and other data by which they might arrive at an independent evaluation of what a particular area of the work should cost, as well as the methods and means necessary to perform it. They had the same opportunity to evaluate any such knowledge base they have and elect to self-perform one or more areas of the work, as did Haycook. Since they had the same opportunity to do so, the evidence does not show there is any competitive advantage gained by Haycook in this situation which was not available to other bidders as well. As addressed above, the architect's recommendation to reject the Haycook bid was based upon his interpretation that "self-performance" required all work to be accomplished by employees on Haycook's payroll. Using that restrictive definition, the architect concluded that Haycook did not demonstrate, as to the Goldsboro and Eustis projects only, that Haycook had self-performed work with its own employees in the past and therefore that Haycook would self-perform with its own employees on the project at issue. The architect concluded that Haycook's subsequent engagement of contract labor in lieu of using his own payroll employees "could potentially give D. J. Haycook Construction Company an unfair advantage over the other bidders." Neither the architect's testimony nor the Board's other evidence explained, however, how that would give the Petitioner an unfair advantage over other bidders who, as found above, were free to engage in the same proposed self-performance as Haycook. The evidence did not establish how it would harm the public's strong interest in getting the best possible price for a quality construction effort that was completed on time, within the authorized budget, and in accordance with all the contractual terms. The architect's and Board's conclusion in this regard is based upon incorrect and unreasonable interpretations of what is meant by "subcontractor" and the concept of "self-performance." The rationale for finding that Haycook's putative self-performance would give Haycook an unfair advantage, vis a vis, other bidders or would promote bid shopping or buy-out of subcontractors has been shown by the evidence to be based upon speculation and conjecture. Haycook's bid response has been shown to be responsive to the specifications as they were stated, published and furnished to the bidders, including Haycook, in the bid documents at issue. The definition of self-performance employed by the architect and the Board is not supported by the language of the bid documents and has been shown by the preponderant, most credible evidence of record to be an unreasonable definition and manner of evaluating the bids and particularly Haycook's bid. Haycook has been shown to be responsive to the specifications and the relevant portions of the bidding documents and to have the lowest bid by a significant amount, some $241,000.00 dollars as to the base bids of Haycook versus that of Clancy and Theys.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the School Board of Volusia County awarding the contract for Elementary School "X" to the Petitioner, D. J. Haycook Construction Company, Inc. DONE AND ENTERED this 8th day of March, 2004, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with Clerk of the Division of Administrative Hearings this 8th day of March, 2004. COPIES FURNISHED: S. LaRue Williams, Esquire Kinsey, Vincent, Pyle, L.C. 150 South Palmetto Avenue, Box A Daytona Beach, Florida 32114 Theodore R. Doran, Esquire Michael G. Dyer, Esquire Doran, Wolfe, Rost & Ansay 444 Seabreeze Boulevard, Suite 800 Post Office Drawer 15110 Daytona Beach, Florida 32115 William E. Hall Superintendent Volusia County School Board Post Office Box 2118 Deland, Florida 32721-2118
The Issue The issues are whether Personnel Pool of North Central Florida, Inc., d/b/a Medical Personnel Pool (MPP), is the lowest qualified bidder on Contract No. R- 2119 or whether Suwannee Valley Medical Personnel Corporation (Suwannee) is entitled to the award of Contract No. R-2119 or is entitled to have all bids rejected and the contract relet for bids.
Findings Of Fact The ITB on Contract No. R-2119 was developed jointly between the Department's Central Office and the Region II contracting staff. The Region II staff sent a draft of the ITB to the Central Office, where it was reviewed by Gerald Ellsworth, the Department's Human Service Program Specialist. Mr. Ellsworth is responsible for reviewing the Department's contracts and plans, as well as for development of the Department's proposed invitations to bid and other related types of documents. Mr. Ellsworth has considerable experience in drafting and reviewing governmental contracts for purchasing of services at the state, local and federal government levels. The ITB was also reviewed by the Department's legal office, the Office of Management and Budget and the Correctional Medical Authority, with regard to both the specifications and the contract language in the ITB. The Department properly published the ITB on or about June 28, 1989. The ITB was published under cover of a formal State of Florida Invitation to Bid for Contractual Services, Form PUR: 7031 (Rev. 10/18/88), containing the State of Florida standard general conditions for bids for contractual services. Among those conditions were detailed requirements regarding the sealed nature of bids, requirements for the execution of bids, requirements regarding the opening of bids and conditions regarding prices, terms and payment, interpretations and disputes, conflict of interest, awards, governmental restrictions, default, legal requirements, advertising, assignment, liability, facilities, cancellation and public records. The same general conditions on the first page of the ITB specifically provided an exclusive mechanism for the bidders to resolve questions and disputes regarding the conditions and specifications of the ITB: INTERPRETATIONS/DISPUTES: Any questions con- cerning conditions and specifications shall be directed in writing to this office for receipt no later than ten (10) days prior to the bid opening. Inquiries must reference the date of bid opening and bid number. No interpretation shall be considered binding unless provided in writing by the State of Florida in response to requests in full compliance with this provision. (Emphasis added.) The body of the ITB stated that the Department was soliciting bids for registered and licensed practical nurse services in the Department's Region II, on all shifts, for the care and treatment of inmate patients, as further defined in the ITB's section entitled "Responsibilities of Successful Bidder; Scope of Work." The ITB also contained detailed requirements regarding Nurse Professional Qualifications, Quality Management Standards, Scheduling of Nurses, Records, Invoicing, Insurance, Legal Requirements, Conflict of Interest, Unsatisfactory Performance, Brokering of Contract, Subcontracts, Verbal Instructions, detailed procedural requirements regarding the submission, review and evaluation of the bids, a description of the institutions covered and a copy of the sample contract. One of the procedural requirements in the body of the ITB repeated that: All inquiries from Bidder's [sic] concerning this Invitation to Bid shall be submitted in writing to the office identified on the cover of this Invitation to Bid. Such inquiries shall be received by the office on or before the date indicated above in the Calendar of Events as the "Last Day for Written Inquiries" [July 10, 1989]. (Emphasis added.) The ITB contained a "Bid Price Sheet" which contained separate blanks for RN and LPN services, separate blanks for each service for weekdays and weekend/holidays, and separate blanks for each of these categories for each of the three geographic areas of Region II, in each of the three years of the contract. That Bid Price Sheet stated that prices quoted "shall be firm net prices regardless of travel involved. . . " The body of the ITB specified that bidders must submit "all costs in the format specified on the Price Quote Sheet provided." (Emphasis added.) Further, the "Proposal Evaluations" section of the ITB specified that the figures to be inserted in the blanks on p. 15 were to be "hourly rates" for each type of nursing service. The next paragraph of this section of the ITB, however, stated that "Total cost, and cost breakouts on the Price Quote Sheet shall be clearly stated." The undisputed testimony of Gerald Ellsworth established that the intent of these provisions of the ITB was to require the bidders to state the total cost (i.e., net firm price) for each hour of nursing services in a particular geographic area at a particular point in time. Even though the ITB set forth an estimate of the hours that would be required under the contract, this information was clearly only in the nature of an estimate, and it was never the intent of the ITB to require the bidders or the Committee to project or evaluate, respectively, the total cost of the contract (as opposed to the total cost of each hour of service) by multiplying the bidders' bid costs for each hour of service by the corresponding estimate of hours needed over the three- year life of the contract for each of those categories. The primary reason for this focus upon the cost of an hour of service, rather than the cost of the entire contract, is that the estimated hours needed, as indicated by the ITB, are only estimates. Actual demands for service and workloads are likely to vary considerably, both by type of nursing position and geographic area. These demands could also vary as a result of factors such as the vacancy levels in the Department's own staff of employee nurses or changes in administrative personnel at a given institution. The ITB called for a mix of both objective and subjective evaluation of materials submitted by the bidders. The cost data, submitted in response to p. 7, para. E; p. 12, para. F.2.e; and p. 15, para. 7 was entirely objective, as was the Committee's role in evaluating that data. On the other hand, the information required from bidders under p. 12, para. F.2.a ("Project understanding and statement of work and reference from clients"), and p. 12, para. F.2.b ("Nurse Professional Qualifications"), called for a mix of both subjective and objective information and evaluation. The former, referred to throughout the testimony as "Criterion A," required the bidder to submit "a narrative statement of work to be performed, and references from clients in accordance with the specifications appearing at p. 4, para. 2.A. The latter, referred to in the testimony as "Criterion B," required bidders to: submit professional qualifications, experi- ence, and CPR certification for Department reviewers which documents the Bidders [sic] capability to provide registered and licensed practical nurse personnel that meet the training specifications. as set forth at pp. 4-5, para. 2.B. Within Criterion B, for example, an entirely objective requirement is the proof of the bidders' nurses' CPR qualification. A subjective element of this same criterion would be the quantity and quality of documentation of available nurses. The ITB required the Committee to award points to the respective bidders based on a formula which takes into account each of these objective and subjective criteria. That Formula, at its first level, assigned a point value of 20 points for Criterion A (Project understanding and statement of work, and references from clients), 30 points for Criterion B (Nurse Professional Qualifications) and 50 points for Criterion C (Bid Cost). Specifically as to Criterion C (Bid Cost), this criterion was entirely objective and did not require any subjective analysis by the Committee. The ITB specified that the lowest bidder "shall" be awarded 50 points, based on the average of the three years' quotes for cost of hours of nursing services. The ITB specified that the remaining bidders "shall" be awarded points for bid cost based on the following formula: Points Awarded Equals 50 x (1-A/B) where A equals the difference between the respective bidders' average bid and the lowest average bid, and B equals the lowest bidder's average bid. Unlike Criterion C, the Committee members' evaluation of the bidders' responses to Criteria A and B was left to their judgment and discretion. While the ITB set forth factors that were to be taken into consideration by the Committee members under these criteria, there was no required method by which an evaluator was to assign points for Criteria A and B. Specifically, there was no requirement in the ITB that the evaluators rank the bidders under Criteria A and B. An evaluator was free, for example, to give all bidders full point credit under either criterion, or to assign them any variation of points. This type of point system for mixed weighing of subjective and objective criteria is not unusual in governmental purchasing contracting and competitive bidding and is, in fact, normal procedure. The bid criteria set forth in the ITB, as well as the system set forth therein for evaluation of those bids by a mix of subjective and objective criteria, is rational. Further, and specifically, the ITB's requirement that costs be quoted as a rate per hour of service, by geographic area and point in time, is rational. It would be irrational to evaluate bid cost under this ITB by multiplying each bidder's price quotes for individual hours of service, broken down by geographic area and point in time, by the corresponding estimates of hours needed, set forth at p. 3 of the ITB, and then comparing the resulting "total cost" of the contract under each bid, since the estimated hours were intended to be no more than estimates, and the Department recognizes that these hours are subject to significant variation over the term of the contract. This probable variation would make the latter calculation entirely meaningless and baselessly speculative. It was not the intent of the ITB to find the "lowest and best" bidder. Instead, the intent of this ITB was to find the lowest bidder who met the qualifications and specifications set forth in the ITB. This is not the same as "lowest and best." The Bidders and Their Bids Medical Personnel Pool MPP, the successful bidder on Contract No. R-2119, timely submitted its bid for that contract. MPP's bid showed that MPP is a nationally recognized health care provider, with over twenty years of experience in serving the health care needs of both home health clients and facility clients. Its franchise office in Gainesville, Florida, is one of four offices operated in the Region II area by Mr. Ed Bixby, a former vice president of MPP's parent company, Personnel Pool of America, Inc. Mr. Bixby personally has over fifteen years of experience in medical staffing. All MPP offices follow the same national corporate standards for quality assurance, office operation and general business practice. Further, MPP is a financially sound and viable business, with an ongoing corporate recruitment program that regularly attracts new employees. MPP's client service representatives are on-call and available 24 hours a day, seven days a week, to meet the Department's staffing needs. The agency has been managed since October 1987, by Mr. Duane Gorgas, who has seventeen years of experience in facility clinical laboratory medicine, and who is licensed by the Department of Health and Rehabilitative Services as a clinical laboratory supervisor. MPP demonstrated compliance with Criterion B of the ITB by showing that each of its nurses is carefully and personally screened and tested for nursing skills prior to being sent into the field. In addition, MPP personally verifies all nurses' licenses with the Department of Professional Regulation, as well as their CPR certifications. A minimum of one year's documented current clinical experience is required prior to a nurse's being sent into the field. Further, MPP is itself an approved provider of nursing and other professional continuing education programs (DPR Provider No. 27M0938) and provides continuing education directly to its employees on a regular basis. MPP's Gainesville franchise already provides RN's and LPN's to correctional facilities, hospitals and nursing homes throughout sixteen counties in north central Florida. A list of the prisons and county jails currently and historically staffed by MPP in both Regions II and III was included in the bid, and includes thirteen corrections facilities in those two regions. A broad range of references from these and other clients, both institutional and personal, was included as Attachment II to MPP's bid. Copies of the licenses of 48 experienced MPP nurses, qualified and available to provide the services called for under Contract No. R-2119, were attached to the bid as Attachment III. Suwannee Suwannee's bid was also timely submitted. Whereas Suwannee now protests that the Department's manner of determining bid costs as net cost per hourly unit of service is irrational, that contention is belied by Suwannee's own bid. In the first place, Suwannee did not quote cost as a multiplication of hourly rates times total estimated hours anywhere in its bid, even though its president, Mr. Fortner, now contends this is the only rational way to quote or determine bid cost under the ITB. Further, Mr. Fortner expressly conceded that the ITB did not call for any such calculation of "total cost" by multiplication of rates by estimated hours. Even so, Suwannee has waived any objection or question it may now have as to the method of determining bid cost. Mr. Fortner conceded that he was fully aware of the standards set forth at pp. 1 and 11 of the ITB, requiring that questions or objections to the reasonableness, necessity or competitiveness of the terms and conditions of the ITB be submitted in writing in a timely manner prior to July 10, 1989. Mr. Fortner nevertheless conceded that he failed to submit any such questions or objections regarding the reasonableness, necessity or competitiveness of the terms and conditions of the ITB, until the filing of his protest after the award of the bid to MPP, and long after July 10, 1989. Having failed to file any timely written objections to the reasonableness, necessity or competitiveness of the terms and conditions of the ITB, therefore, Suwannee has waived any objections to the Department's method of calculating bid costs by averaging each bidder's unit net price for an hour of service by geographic area and point in time, as opposed to Suwannee's after- the-fact preferred method of multiplying these rates by estimated hours to determine Suwannee's definition of "total cost." Suwannee's bid, as supported by its president's testimony, showed that Suwannee was only incorporated in late July 1988, less than a year before the ITB was published. Prior to that time its then-22-year-old president's business experience consisted of operating a video store. Mr. Fortner conceded he had no prior experience whatsoever in providing any sort of nursing or medical services. Prior to the bid letting, Suwannee's sole experience in attempting to staff a correctional facility was at Baker Correctional Institute. Mr. Fortner testified that his first client was Lake City Medical Center, yet no reference from that facility appears in his bid. On the other hand, MPP's bid contains a highly favorable reference from Lake City Medical Center's director of nursing, indicating a completely satisfactory contractual relationship with MPP since 1987. Whereas MPP directly provides continuing education to its nurses under its own provider number, Suwannee takes the position that continuing education requirements are the nurses' responsibilities, and that they must meet these requirements at their own expense. Further, while Mr. Fortner stated that he believes Suwannee tests its nurses, he admitted he did not know how, and Suwannee's bid was silent on this aspect of Criterion B of the ITB. Suwannee's bid was also silent on screening of new nurse applicants. Suwannee has only recently hired a full-time director of nursing. Whereas MPP submitted qualifications for 48 nurses to staff the estimated hours under contract, Suwannee proposed to staff the same number of estimated hours with only 31 nurses. Mr. Fortner testified that the number of licenses in Suwannee's bid constitutes the full complement of nurses he deems necessary to provide the number of hours of service estimated in the ITB. The Bid Evaluation Process Objective Evaluation of Criterion C Initially, because of a confusing misprint in the ITB regarding the mathematical formula for calculating points to be awarded to bidders, other than the lowest average cost bidder, under Criterion C (bid cost), some of the four Bid Evaluation Committee members calculated the ranking of bidders under that criterion differently. That calculation was corrected by Dr. Rechtine, the Committee chairperson, however, in consultation with officials of the Region II office. The correction did not alter the ultimate overall ranking of the bidders, although it made slight differences in the points awarded individual bidders by some members of the Committee, and in one case the second and third bidders under Criterion C were reversed on one evaluator's tally sheet. All four of the Committee members testified that they agreed with the corrected calculation of points to be awarded each of the bidders under Criterion C. At no time was any other part of any Committee member's points awarded altered or changed. Subjective Evaluation of Criteria A and B Steven Smith Committee member Steven Smith, Regional Health Services Administrator for Region II, responsible for assisting institutions in the region with health service issues, including contracting for health services, evaluated the respective bids of MPP and Suwannee in a rational and reasoned manner. With respect to Criteria A and B, Mr. Smith thoroughly reviewed the entire bid document of each bidder and made judgments as to the merits of each bid. His evaluations were based on how the bidders presented their respective documents, including the presentation and content of the narratives. While he did not assign any greater weight to either MPP's or Suwannee's references, Mr. Smith felt that MPP better articulated its understanding of the nature of the work. Mr. Smith was particularly impressed with MPP's understanding of the Department's court-ordered duty to improve access for inmates' to nursing services, which Mr. Smith felt was indicative of MPP's understanding of the contract's service requirements. He was also impressed with MPP's documentation of its 24-hour coverage. In sum, Mr. Smith felt MPP's bid was much clearer than Suwannee's. Cynthia Vathauer Committee member Cynthia Vathauer is a Department accountant, in charge of the inmates' welfare fund, who has previously served as an evaluator of competitive bids. Ms. Vathauer evaluated the respective bids of MPP and Suwannee in a rational and reasoned manner. With respect to Criteria A and B, Ms. Vathauer reviewed the ITB and next performed a detailed analysis of whether the bid components called for by the ITB under Criteria A and B were present in each bid. Her review of the bids under Criteria A and B consisted of listing all of the required components under each criterion and then checking off whether each bidder had adequately provided the required components, making notes where there was partial or questionable compliance and deducting points from the total allowable for each criterion which was missing or incomplete. Whereas Suwannee contends Ms. Vathauer made "no analysis" of the bids under Criteria A and B, simply because Ms. Vathauer stated that she did not read these components of the bids in detail for comparative content, this allegation is not supported by the weight of the competent, substantial evidence. Ms. Vathauer's detailed analysis of the presence or absence of the factors called for by the ITB, supported by her contemporaneous notes, shows that Ms. Vathauer made a rational and reasoned analysis of the bids under those criteria, fully supporting her allocation of points to the bidders under those criteria. She admitted candidly that she was not familiar with the clinical or operational aspects of health service provision. Thus, for example, rather than attempt to compare the relative quality of nurse evaluations (which, incidentally, was not required under the ITB), Ms. Vathauer based her judgment of compliance with this criterion on the presence or absence of valid copies of actual licenses. Dianne Rechtine, M.D. Dianne Rechtine, M.D., is the medical executive director at North Florida Reception Center and acting medical services director for Region II. Dr. Rechtine also performed a rational and reasoned evaluation of the bids under the standards of the ITB. Dr. Rechtine read the respective bids and, with respect to Criteria A and B, assigned points based on her evaluation of those bids. Her notes of how she allocated points under these criteria appear as Joint Exhibit No. 4D and show that Dr. Rechtine actually scored Suwannee higher than MPP under Criterion A and the same as MPP under Criterion B. Suwannee has not been heard to assert that Dr. Rechtine's analysis under these criteria was other than rational and reasoned. Thus, it is found that Dr. Rechtine's analysis and evaluation of the bids was in fact rational and reasoned. Peggy (Richardson) Patray Since Peggy (Richardson) Patray was not called to the witness stand, MPP offered into evidence, without objection, her deposition testimony, taken prior to MPP's intervention and without benefit of cross-examination by MPP or its counsel. Nevertheless, that deposition and Ms. Patray's own evaluation notes appearing as Joint Exhibit No. 4E demonstrate that Ms. Patray, a registered nursing services consultant employed by the Department and previous nursing supervisor at New River Correctional Institute, carefully reviewed the ITB and analyzed and evaluated the bids under Criteria A, B and C prior to awarding points to the bidders. Ms. Patray looked at the types of facilities from which references were obtained and considered, for example, related jail-type experience to be a positive factor. Ms. Patray actually scored Suwannee superior to MPP under Criterion A for reasons related to the bidders' statements of understanding of work. She scored the two bidders evenly under Criterion B, even though she was favorably impressed by one (at the time of her deposition, she could not recall which) bidder's emphasis on pre-employment screening and in-service training, when contrasted with the other bidder's leaving of this responsibility to the individual nurses. Finally, Ms. Patray testified that she was favorably impressed with MPP's sources of references, as opposed to Suwannee's, and that there was not enough information in Suwannee's bid, in her opinion, regarding nurse professional qualifications. In sum, Ms. Patray's testimony and notes in Joint Exhibit No. 4E demonstrate clearly that she also performed a rational and reasoned evaluation of the bids of the parties under the terms and conditions of the ITB. Suwannee's Allegations There is no evidence on the record of this proceeding to support Suwannee's allegations that political or media pressure adverse to Suwannee influenced the decision to award Contract No. R-2119 to MPP. Each Department witness who testified in this proceeding testified that no such political pressure was brought to bear upon them or even attempted. The competent, substantial and unrebutted evidence of record demonstrates clearly that no such pressure or influence occurred or was attempted. In the same vein, Suwannee has alleged that the Committee improperly considered, to Suwannee's prejudice and detriment, factors or information outside of the ITB and the bid documents. The only evidence of record of Committee members having considered information outside of the ITB or the bids was the testimony of several of the Committee members that they either were aware of or considered allegations of past difficulties with MPP, not Suwannee. For example, Mr. Smith testified that he was aware of one past problem with MPP, but none with Suwannee. In any event, he did not consider anything outside of the bid documents in his review. Ms. Vathauer said nothing relating to this issue. Dr. Rechtine testified that she was aware of, and had considered, past problems with MPP, that she had received favorable input as to Suwannee and, to the extent that this knowledge affected her evaluation, she agreed that it did so to the advantage of Suwannee (scored 20 under Criterion A, 20 under Criterion B), and to the disadvantage of MPP (scored 12 under Criterion A, 20 under Criterion B). Finally, even Ms. Patray testified that she had received some negative reports on MPP, whereas she mentioned no such information regarding Suwannee. In sum, there is no evidence of record to support Suwannee's allegations that the Committee members improperly considered, to Suwannee's prejudice and detriment, factors outside the bid documents. Any error which may have occurred in this regard was entirely harmless as to Suwannee, and if it had any effect at all, it worked to Suwannee's benefit. Results of the Bid Evaluation Process The result of the bid evaluation process was that MPP received 88 overall points under the formula set out in the ITB, Suwannee received 85.62, Quality Care received 73.05 and Upjohn received 58.87. MPP was also the low bidder on cost, i.e., Criterion C. The weight and preponderance of the competent, substantial evidence demonstrates that Contract No. R-2119 should have been awarded to MPP, as it was, and that there is an ample, rational, reasoned and logical basis in the record supporting the decision of the Department to award the contract to MPP.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that The Department of Corrections enter a Final Order awarding Contract No. R-2119 to Personnel Pool of North Central Florida, Inc., d/b/a Medical Personnel Pool. DONE and ENTERED this 4th day of December, 1989, in Tallahassee, Florida. DIANE K. KIESLING Hearing Office 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 4th day of December, 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 89-4566BID The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Suwannee Valley Medical personnel Corporation 1 Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1 (page 5). Proposed findings of fact 2-5, 7-12, 14-16, and 18 are subordinate to the facts actually found in this Recommended Order. Proposed findings of fact 6, 17, and 19 are unnecessary or irrelevant. Proposed finding of fact 13 is unsupported by the competent, substantial evidence. Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Department of Corrections Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 2 (3); 3 (19, 25); 4 (page 5); 6 (11); 7 (12); 8 (16); 9 (46); 14 (44); and 15 (45) Proposed findings of fact 1, 5, and 10-13 are subordinate to the facts actually found in this Recommended Order. Specific Rulings on Proposed Findings of Fact Submitted by Intervenor, Medical Personnel Pool Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 16-50 (1-35) and 53-63 (36- 46) Proposed findings of fact 12-15 are unnecessary or irrelevant. Proposed finding of fact 51 is included on page 5 of the Recommended Order. Proposed finding of fact 52 is subordinate to the facts actually found in this Recommended Older COPIES FURNISHED: John F. Gilroy Attorney at Law Haben & Culpepper 306 North Nonroe Street Tallahassee, Florida 32302 Drucilla E Bell Perri M. King Attorneys at Law Florida Department of Corrections 1311 Winewood Boulevard Tallahassee, Florida 32399-2500 Thomas D. Watry Attorney at Law Parker, Hudson, Rainer & Dobbs 1200 Carnegie Building 133 Carnegie Way Atlanta, Georgia 30303 Richard L. Dugger, Secretary Department of Corrections 1311 Winewood Boulevard Tallahassee, Florida 32399-2500
The Issue Whether the apparent low bid on contract No. SB 95C-66W should be disqualified on the grounds that the bidder does not meet the experience specifications contained in the Invitation to Bid.
Findings Of Fact On August 16, 1994, the School Board issued Invitation to Bid (ITB) No. SB 95C-66W, which was described as being a "term contract to provide and/or install rubberized coatings for sports surfaces." Among the bidders who responded to the ITB were the Petitioner, Papico Construction, Inc., and AAA Tennis Courts, Inc. On August 31, 1994, bids were tabulated and the School Board posted its intent to award the bid to Papico. Thereafter, the bid process was delayed as a result of a protest filed by another bidder. On December 12, 1994, Petitioner filed the formal bid protest that resulted in this proceeding. The School Board does not challenge the timeliness of Petitioner's protest. Among the special conditions of the ITB is the following pertaining the qualifications of the bidder: E. QUALIFICATIONS: The bidder shall have maintained continual work experience in coatings for running tracks for a period of three years prior to the bid date. Bidder must submit written documentation with bid or within three days upon request, substantiating experience requirement. The bidder shall have a place of business for contact by the owner during normal working days. Petitioner framed its challenge to the bid process by the following portion of its formal bid protest: . . . To award this project to Papico or AAA Tennis Courts is not only directly in contradiction to the 3 years of continuous work experience section of the specifications (Special Conditions - E), but also deprives the school system of our experience. . . . Papico timely submitted to the School Board written documentation that substantiated that it met the experience requirement contained in Special Condition - E. The evidence presented at the formal hearing established that Papico is an experienced contractor for recreational surfaces and has been involved in coatings for running tracks since 1989. Between 1989 and the time of the formal hearing, Papico had been involved as either the contractor or as a subcontractor for the surfacing or resurfacing of running tracks at Indiantown Middle School, Parkland High School, Hidden Oaks Middle School, J.D. Parker Elementary School, Florida Atlantic University, Martin County High School, South Plantation High School, and Deland High School. At the formal hearing, Petitioner asserted that Papico also did not meet the experience criteria contained in Special Condition - M. That provision is as follows: M. QUALIFICATIONS: The contractor will submit a list of five all-weather running tracks the firm has resurfaced during the past three years. The list shall contain: owner name, location, phone number, number of tracks, and year constructed or resurfaced. (The district reserves the right to contract these owners as references.) Notwithstanding the fact that this issue was not properly preserved by Petitioner, the evidence established that Papico provided this list to the School Board, thereby complying with Special Condition - M.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the School Board of Palm Beach County enter a final order that adopts the findings of fact and conclusions of law contained herein, dismisses the bid protest filed by Recreational Surfaces, Inc., and awards the subject contract to Papico Construction, Inc. DONE AND ENTERED this 9th day of February, 1995, 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 9th day of February, 1995. COPIES FURNISHED: James Petrucelli Recreational Surfaces, Inc. 2123 Oregon Street Orlando, Florida 32803 Robert A. Rosillo, Esquire Palm Beach County School Board 3318 Forest Hill Boulevard, Suite C-302 West Palm Beach, Florida 33406-5813 Dr. Monica Uhlhorn, Superintendent Palm Beach County School Board 3340 Forest Hill Boulevard West Palm Beach, Florida 33406-5869
