Findings Of Fact By publication in the Florida Administrative Weekly, Volume 20, Number 32, August 12, 1994, the Department of Banking and Finance (Department) gave notice of a Request for Proposals (RFP No. BF5/94-95) seeking public auction services related to the disposition of abandoned property. Timely proposals were submitted by Golden Gavel Auctioneers, Fisher Auction Company, Inc., Wayne Smith Auction Company, and Hamburg Auction Company. The RFP states that proposals will be evaluated in three phases for compliance with mandatory requirements (Phase I), quality of technical proposals (Phase II) and fee schedules (Phase III). Proposals were evaluated by three employees of the Department. The RFP provided that the criteria were weighted to permit each proposal to be numerically ranked. Each evaluator could award a score of up to 100 points according to evaluation criteria set forth in the RFP. The contract award would go to the proposal receiving the highest score from the 300 total points available. The Petitioner presented no evidence that the Phases I and II proposal evaluations were inappropriate or otherwise failed to meet the requirements of law. Phase III of the evaluation process was directed toward examination of the proposed fees to be paid to the successful bidder. As to the award of points for the fee schedule, the RFP provides as follows: For each proposal received acknowledging the services outlined in this RFP, the corresponding Fee Schedule...will be examined. All fee proposals must be expressed solely in the form of a percentage of the gross sales of property sold. A total maximum value of seventy-five (75) pts. will be awarded (out of total of 100 pts) to the lowest proposed fee percentage submitted. All other proposals will be awarded points based on the following formula Points Awarded for Fee percentage = 75 x (1 - C) C = Difference of proposal fee percentage from lowest proposal; This formula only includes valid proposals. Decimals will be rounded to the nearest whole number; .5 points will be rounded upward. The Petitioner proposed the lowest fee schedule at 9.45 percent of gross sales and, as the lowest fee proposal, received the full 75 points available for Phase III. Fisher Auction Company was the second lowest bidder, proposing a fee of 10 percent of gross sales. Application of the formula and calculation of the points awarded was completed according to the following steps: Step 1. 75 x (1 - C) Step 2. 75 x [1 - (.10 - .0945)] (Note that "C" is the difference of Fisher's 10 percent fee from Golden Gavel's 9.45) Step 3. 75 x (1 - .0055) Step 4. 75 x .9945 Step 5. 74.58 As provided in the RFP, scores were rounded to the nearest whole numbers. Fisher's point total of 74.58 was rounded to an award of 75 points for Phase III. Based on evaluation by the three Department employees, the following scores were awarded: Fisher Auction Company - 299 points Golden Gavel Auctioneers - 287 points Wayne Evan Auction Company - 284 points Hamburg Auction Company - 273 points The Department posted the results at 3:30 p.m. on September 16, 1994, proposing an award to Fisher. The Petitioner asserts that in calculating the point awards under Phase III of the evaluation process, the evaluator should use the percentage difference between the proposed fees rather than the numerical difference as was done by the Department. The result of such application would be a broader range in the points awarded under Phase III of the evaluation. The Petitioner suggests that to do otherwise is contrary to the RFP's stated intention to provide a weighted score to each proposal. There is no evidence that the Department's application of the formula is inappropriate or that the calculation of points related to fee schedules was fraudulent, arbitrary, illegal or dishonest. There is no evidence that the Petitioner questioned or objected to the formula set forth in the RFP prior to the announcement of the intended award.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Department of Banking and Finance enter a Final Order DISMISSING the Petition filed in this case and making an award to the Intervenor. DONE and RECOMMENDED this 21st day of November, 1994, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 21st day of November, 1994. APPENDIX TO CASE NO. 94-5734BID The following constitute rulings on proposed findings of facts submitted by the parties. Petitioner The Petitioner's proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 3, 6-10. Rejected, unnecessary. Rejected, subordinate. Rejected, the evidence does not indicate that "75 x 3" was part of the formula. Otherwise accepted as modified and included herein. Rejected, the evidence does not indicate that "75 x 3" was part of the formula. There is no evidence that the Department's application of the formula was inappropriate or contrary to the language of the RFP. Respondent and Intervenor The Respondent-Intervenor's jointly submitted proposed findings of fact are accepted as modified and incorporated in the Recommended Order except as follows: 3, 6-10. Rejected, unnecessary. Rejected, subordinate. COPIES FURNISHED: Hon. Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 William G. Reeves, General Counsel Department of Banking and Finance Suite 1302, The Capitol Tallahassee, Florida 32399-0350 Dale M. Vash, Esquire FOWLER, WHITE, GILLEN, BOGGS, VILLAREAL, & BANKER, P.A. 501 East Kennedy Boulevard Post Office Box 1438 Tampa, Florida 33601 Margaret S. Karniewicz, Esquire Department of Banking and Finance Suite 1302, The Capitol Tallahassee, Florida 32399-0350 Bernard T. Moyle, Esquire BENSON, MOYLE & CHAMBERS Suite 1602, One Financial Plaza Fort Lauderdale, Florida 33394-1697
The Issue Whether Respondent, a certified general contractor, violated the construction industry licensing law, by: (1) acting in the capacity of a contractor under a name other than as set forth on his certificate; (2) diverting construction funds resulting in his unwillingness or inability to perform pursuant to a construction contract; and (3) abandoning three construction projects, and if Respondent is guilty of such violations, the appropriate disciplinary penalty which should be imposed by the Construction Industry Licensing Board. Conclusions and Recommendation Conclusions: Respondent is guilty of the charges that he (1) acted in the capacity of a contractor under a name other than as set forth on his certificate, and (2) abandoned a single construction project; he is not guilty of the charges that he abandoned two other projects, and diverted construction funds which resulted in his unwillingness, or inability to perform pursuant to a construction contract. Recommendation: That Respondent's certified general contractor's license be SUSPENDED until such time as Respondent furnishes to the Board satisfactory evidence of having made restitution to purchasers entitled to the return of their deposits made pursuant to Hands High Ranchettes and Bass Creek of Boynton residential purchase agreements.
Findings Of Fact Respondent Fuller holds a currently active certified general contractor's license, no. CG C009750. Fuller is authorized by his certification to perform contracting only under his proper name, or the name of Bass Creek Corporation. (Testimony of Kehr, Fuller) At all times material hereto, Fuller was a general partner in two Florida limited partnerships: Bass Creek of Boynton Associates, Ltd. and Hands High Ranchettes, Ltd. These partnerships attempted to develop and construct two residential subdivisions in Palm Beach County -- Hands High Ranchettes and Bass Creek. In furtherance of this undertaking Fuller, or his agents, executed written contracts to sell lots within the developments and construct residences thereon. The Board alleged, and presented evidence at hearing for the purpose of establishing, that Fuller violated Chapter 468, Florida Statutes (1978) by his actions relating to contracts executed with three individuals -- Muriel F. Mason, Rozeanne E. White, and George C. Mitchell. (Testimony of Mason, White, Fuller, Petitioner's Exhibits 1 - 6). [AS TO MURIEL F. MASON] On September 10, 1978, Hands High Ranchettes, Ltd. entered into an Agreement of Purchase of Sale with Muriel F. Mason. By this agreement, Mason agreed to purchase a lot, with residence to be constructed thereon, in the Hands High Ranchettes residential development. The contract purchase price was $75,930.00. By January, 1979, Mason had paid into the Hands High Escrow Account, pursuant to the contract, an initial deposit of $3,915.00. (Testimony of Mason, Fuller, Petitioner's Exhibits 5, 6) Early in 1979, the bank rejected her application for a mortgage loan to finance purchase of the property. Consequently, under the contract, Fuller was not required to commence construction on the property. Moreover, Mason subsequently notified Hands High Ranchettes that she no longer wished to proceed with the contract, and requested return of her initial deposit. Under such circumstances, the purchase contract requires, and Fuller admits, that Mason is entitled to the full return of her $3,515.00 deposit. (Testimony of Mason, Fuller, Petitioner's Exhibit 5). During early July, 1979, Fuller notified Mason that 1e intended to return her $3,815.00 deposit, and that he would send her a letter to that effect. Fuller has recently earned substantial monies by selling land and completing a construction project which should enable him to return Mason's deposit no later than October, 1980. (Testimony of Mason, Fuller) [AS TO ROZEANNE WHITE] On August 19, 1975, Hands High Ranchettes, Ltd. entered into a similar Agreement of Purchase of Sale with Rozeanne White, aid her husband. By the agreement, White agreed to purchase a lot, with residence to be constructed thereon, in the Hands High Ranchettes subdivision. The purchase price was $75,000.00. By March, 1979, pursuant to the agreement, White had paid into the Hands High Ranchettes Escrow Account a $7,500.00 initial deposit. (Testimony of White, Fuller, Petitioner's Exhibit 1) In March, 1979, White obtained the necessary mortgage loan to finance purchase of the lot and construction of the residence. Hands High Ranchettes, however, except for clearing the lot and constructing foundation forms, never constructed the residence specified in the Purchase Agreement. (Testimony of White, Fuller). In July, 1979, Fuller told White that due to severe financial problems associated with the development, he would be unable to construct her residence, and would refund her deposit within thirty days. Fuller's failure to timely construct the residence imposed a severe burden on White and her family. In anticipation of her new home being built, she had sold her existing residence. When the new residence was not constructed, she had to move her family into an 18' travel trailer for seven weeks during the summer. At the time she was pregnant, and was accompanied by her husband and two children. After Fuller failed to return her deposit, she filed a suit for damages and obtained a civil judgment against Hands High Ranchettes, Fuller, and Bass Creek Corporation for $43,000.00. In satisfaction of the judgment she ultimately accepted a settlement offer of $10,000.00 plus attorney fees. (Testimony of White) [AS TO GEORGE MITCHELL] On April 28, 1979, George Mitchell and his wife entered a similar Agreement of Purchase of Sale with Fuller's other limited partnership -- Bass Creek of Boynton Associates, Ltd. The agreement covered the purchase of a lot and construction of a new residence in the Bass Creek subdivision. The purchase price was $68,301.00 and, pursuant to the contract, Mitchell paid an initial deposit of $1,001.00 (Testimony of Fuller, Petitioner's Exhibit 2). Due to no fault of Mitchell's, the residence specified in their agreement was never constructed. Fuller admits that he defaulted on his obligation under the Agreement of Purchase and that Mitchell is entitled to the refund of his $1,001.00 initial deposit. (Testimony of Fuller, Petitioner's Exhibits 3, 4) [ACTIONS OF GEORGE FULLER] Fuller, d/b/a Hands High Ranchettes, Ltd. and Bass Creek of Boynton Associates, Ltd. used the initial deposits received under the Purchase Agreements with Mason, White, and Mitchell to pay for clearing the lots, constructing foundation forms, and associated engineering and architectural fees. (Testimony of Fuller) Fuller, by his own admission, failed to perform his contractual obligation to return the initial deposits to Mason, White, and Mitchell. He promises to refund, by the end of October, 1980, any deposit monies due Mason, White, Mitchell, and other persons who entered into agreements to purchase land and construct residences within the two subdivisions. Fuller's failure to perform his contractual obligation to convey lots and construct the promised residences is not due to unwillingness or bad faith on his part, or a motive to avoid his contractual responsibilities. Rather, it is due to serious and complex financial difficulties he encountered in developing the two residential subdivisions. The two events primarily responsible for these financial difficulties were: (1) another party's breach of its contractual obligation to construct road improvements within the subdivisions; and (2) failure of the limited partner in these two ventures, Housing Capital Corporation of Washington, D.C., to furnish, as promised, $650,000.00 in interim development funds. In an effort to complete the developments, Fuller expended virtually all of his personal assets. (Testimony of Fuller) Fuller has engaged in general contracting for over forty years; charges have never before been brought against him in connection with his construction activities. For approximately twelve years he constructed numerous buildings for the Catholic Diocese of Brooklyn, N.Y. and has a wide range of experience in constructing schools, commercial buildings, residences, and apartment buildings. Since obtaining his Florida license, he undertook and successfully completed a 153-home residential development in Delrey Beach, Florida. His professional livelihood and economic well-being are dependent on his continued ability to engage in general contracting. (Testimony of Fuller).
The Issue The issues in this case are whether Respondent committed the violations alleged in the Administrative Complaint, and, if so, what discipline should be imposed.
Findings Of Fact Admitted Facts Per Pre-Hearing Stipulation Petitioner is the state agency charged with regulating the practice of contracting pursuant to section 20.165 and chapters 455 and 489, Florida Statutes. Respondent is a state-certified building contractor in the State of Florida, having been issued license No. CBC 039025. Respondent was the licensed primary qualifying agent for Thom Colan Construction, Inc., from June 10, 2004, to September 4, 2008. On January 10, 2006, Thom Colan Construction, Inc., entered into a contract with Kathleen and Robert Masten to construct a house and pool on property located at 547 Bradenton Road, Venice, Florida (the project). The contract price for the project was $260,000.00. The project was completed with the issuance of a certificate of occupancy. Additional Findings of Fact Based on the weight and credibility of the testimony and evidence presented, the following additional facts are found: The contract between Respondent and the Mastens was a fixed-price contract. Although the contract price was $260,000.00, the Mastens paid a total of $320.394.19 for the project. The payments were made by the following methods: $49,968.58 was paid by check from the Mastens directly to Respondent; Respondent obtained an additional $222,320.71 in total bank draws, pursuant to a construction loan that authorized Respondent to draw funds directly from the bank for the project; and the remaining $48,104.90 was paid by check or credit card by the Mastens directly to subcontractors for labor and materials provided for the project. Thus, the Mastens paid $60,394.19 more than the contract price. At issue, and the subject of much dispute at the final hearing, was why the project exceeded the contract price by over $60,000.00. Respondent asserted that the entire amount by which the contract price was exceeded was attributable either to changes to the contract terms required by the Mastens or to circumstances beyond Respondent's control, such as price increases by subcontractors.2/ It was difficult to establish the causes for the price increases, in part, because the parties to the contract did not adhere to the formalities called for by the contract. For example, while both witnesses acknowledged that the Mastens requested changes as the project progressed, there was substantial disagreement about the extent of these changes and the cost differential. Unfortunately, there were no written change orders as required by the contract. Written change orders would have documented exactly what was changed and what cost was attributable to the change. Another problematic area in attempting to pinpoint why the contract price was exceeded was that there was no clear proof of the contract specifications detailing the design features of the house and pool. The written contract described a process of developing "plans" with "specifications" as to design elements. Initially, the plans would be preliminary, with items designated for buyer selections. The contract contemplated that the buyer would make these selections, which would become part of the plans, and the plans would then be considered final. Thus, certain buyer selections would be part of the contract. Thereafter, if the buyer wanted to change the final plans and specifications, the buyer would be responsible for the increased costs. No evidence was presented as to what the plans provided with respect to design features and which of those design features provided for buyer selections. Neither the preliminary plans and specifications for the Masten contract, nor the final plans and specifications after buyer selections, were offered into evidence, and it is unclear whether the process contemplated by the written contract was even followed. Nonetheless, Mrs. Masten admitted that she requested certain changes, which she acknowledged were not contemplated by the contract and were more costly than what the contract contemplated. For example, Mrs. Masten acknowledged that she requested an upgrade in kitchen appliances, increasing the cost by $2,703.55. She also acknowledged that she requested an upgrade in bathroom fixtures, but she was unsure of the cost attributable to the upgrade. Respondent testified that the total cost increase for upgrades requested by Mrs. Masten to plumbing and fixtures was $4,745.42. Mrs. Masten thought that amount was too high; it included changes claimed by Respondent, but disputed by Mrs. Masten, such as an upgrade to a hot tub that Mrs. Masten said she did not want but, apparently, was installed. The circumstances surrounding other apparent changes were in dispute. For example, an expedition, including Mrs. Masten and Respondent, trekked to a tile outlet store in Fort Meyers to pick out tile to use in the shower stall and floors. For the shower stall, Respondent testified that he "insisted" on travertine; Mrs. Masten apparently agreed, but said that she felt pressured to do so. The purchase was made, and Respondent returned to haul the travertine and other tile for the flooring on a trailer back to Venice. At some point, Mrs. Masten changed her mind about the travertine after being told by a competitor that travertine was a high-maintenance bad choice. Respondent claimed it was too late to return the tile, which he valued at $750.00, and so he testified that he threw it away. Mrs. Masten then selected different tile from the competitor at a price that was $1,292.16 higher than the travertine. The circumstances surrounding the selection of cabinetry were also in dispute. Respondent testified that he planned to use Enrique Benitez, a subcontractor who was doing other work in the house, to make the cabinets. Respondent claimed that he had Enrique prepare wood samples with different stains and that Mrs. Masten approved the samples and picked out the stain. At that point, Respondent said he paid Enrique $2,970.00 to begin constructing the cabinets. Mrs. Masten claimed that she never approved any samples, was shown only a rough, long plank of splintered wood that she said was awful and would not approve, and that she did not like any of the work this particular subcontractor was doing throughout the house. At some point, Mrs. Masten impressed upon Respondent that she would not accept these cabinets, and she selected different cabinets at an increased cost of $6,886.00. If Enrique ever built cabinets for the Mastens, he kept them. Another outing was made to select countertops. Mrs. Masten did not like the granite pieces that Respondent had intended to use, and the result was that the cost of the granite countertops selected by Mrs. Masten was $5,000.00 higher. Respondent and Mrs. Masten also could not agree on the extent of requested changes to the plans for flooring or the cost of those changes. Respondent testified that Mrs. Masten changed the mix of tile and carpeting, but Mrs. Masten disagreed. Respondent testified that Mrs. Masten required an upgraded carpet style, and although Mrs. Masten acknowledged that she selected a different carpet style, there was no evidence pinpointing the cost difference of the carpet upgrade. Additionally, Respondent acknowledged that one reason why the total cost for flooring was higher than expected was that Enrique Benitez increased the price to install the tiles from $3,000.00 to $7,500.00. Respondent sought to blame Mrs. Masten for the increased installation price, claiming that Mrs. Masten "fired" Enrique over the cabinet debacle, but Respondent had to rehire Enrique to install the floors and had to pay the increased price to overcome Enrique's hurt feelings. Mrs. Masten denied the claim that she "fired" Enrique, though she acknowledged that she was not happy with his work and that she refused to approve the cabinets Enrique was supposed to build, because the sample was unacceptable. Respondent testified that an additional $3,079.90 was spent for upgraded lighting and fans requested by the Mastens and for other electrical upgrades to accommodate other changes, such as the pool heater and spa tub. The cost to construct the pool increased by $3,700.00. According to Respondent, this increase was due to the cost of adding a pool heater that was not part of the original plans, at the request of the Mastens. Mrs. Masten disputed that this was a change. Respondent testified that there was a $323.00 cost increase because of the Mastens' request for an upgraded water softener. Post-contract changes made by the engineer to relocate the septic tank system necessary to obtain the requisite permits, altered the elevation and slope of certain parts of the property, including the space where the air conditioner would sit. Those changes resulted in the need to add a concrete slab and platform for the air conditioner. This additional cost was $419.25. Also because of the septic system design change, the county imposed additional landscaping requirements in order to obtain a certificate of occupancy. This resulted in an additional $979.05 spent to purchase trees. Respondent testified that permitting fees imposed by the county exceeded the estimated cost by $2,365.63. Respondent attributed the increase to the higher impact fee charged by the county as a condition to obtain a certificate of occupancy because the post-construction value of the house was higher than estimated. In other words, the combination of cost increases and upgrades led to imposition of a higher impact fee. The rest of the difference between the contract price and the total paid by the Mastens was attributable to increases in costs because of the delay in completing the project or increases in prices charged by subcontractors for their labor and materials. These included increases in the price of concrete, plumbing work, framing, insulation, roofing, drywall, hauling trash, installation of flooring, electrical work, equipment rental, and electricity charges. Respondent explained that he obtained "bids" for various components of the project in September 2005, although he did not sign the contract with the Mastens until January 10, 2006. Respondent anticipated that he would start the project that month, but the start was delayed by more than two months because of the septic system permitting difficulties encountered by the project engineer who had been retained by the Mastens. Mr. Colan utilized the estimates he received from others to develop his overall cost estimates for the project, which he used to establish the contract price. There was no allowance built into the cost estimations for inflation, price increases, or contingency reserves. Although Respondent characterized the price estimates he obtained from subcontractors as "bids," they were not bids in the sense of being firm offers to do work or supply material at a specific cost; they were essentially price estimates subject to change. Respondent testified that at least in some cases, he could count on a bid price being "good" for six months and, in some cases, for as long as seven months. However, Respondent did not lock in any of the bid prices by contracting with the subcontractors in September 2005 or in January 2006 when the Masten contract was executed. Thus, Respondent's reliance on the price estimates given to him in September 2005 was not shown to be reasonable. These estimates would have been four months old before Respondent anticipated starting the project and closer to seven months old before the project actually began. Since many of the price estimates were for items that would not be needed for months after the project began (such as bathroom fixtures, appliances, cabinetry, flooring, and lighting), even under the best-case scenario without any delays, Respondent was plainly taking a risk by using September 2005 cost estimates as if they were guaranteed prices in determining the contract price for the Mastens' project. Not surprisingly, many subcontractors were not willing to honor the stale price estimates when Respondent sought to contract with them many months later. Respondent suggested that he should not bear the risk of others' price increases, because they were not within his control. But Respondent controlled how he went about estimating his costs for the project and how he established the fixed price he agreed to in the contract. No credible evidence was presented to establish that the price increases by Respondent's subcontractors were due to such extraordinary market conditions or delays that they could not have been reasonably anticipated and addressed sufficiently through inflation allowances or contingency reserves built into the cost estimations. While Respondent attempted to characterize certain price increases, such as the rise in the price of cement and copper or the increased cost of dirt, as attributable to a "heated up" construction market, which caused unanticipated demand, Respondent's testimony was not credible and was not supported by any independent non-hearsay evidence. Indeed, Respondent admitted that in most cases, he did not shop around before accepting the price increases demanded by his subcontractors. In some cases, he had checked on prices within the two-county area when obtaining the cost estimates in September 2005, and then he assumed that by identifying the lowest price or best supplier in September 2005, there was no need to check around when that supplier demanded a price increase later. In no instance did Respondent check prices outside of his local area. Respondent acknowledged that the total amount spent for engineering and surveying fees exceeded his estimate by $4,177.12. Respondent argued that these fees were beyond his control, because the Mastens had retained the engineer and surveyor before Respondent entered into a contract with the Mastens. However, Respondent included the engineer and surveyor fee expenses in his cost estimates and assumed the responsibility for covering these fees as part of the overall construction of the house and pool within the fixed contract price. No credible evidence established that the fees were unusually high and could not have been anticipated or addressed by appropriate contingency reserves. Respondent attempted to blame many of the price increases on the two-plus month delay in starting the project because of the engineer's need to relocate the septic system to resolve permitting issues. As pointed out above, this delay did not in and of itself cause the problem of price increases by subcontractors unwilling to honor price estimates quoted in September 2005. In any event, Respondent did not testify that the delays were extraordinary and not reasonably anticipated, even if the exact reason for the delays may not have been known. Instead, various delays for various reasons are to be expected, and, indeed, are expressly contemplated throughout the written contract. Notably, in a section called "Price Guarantee," the contract form allowed the parties to specify a month by which construction had to begin or else the builder would have a qualified right to adjust the contract price. Respondent waived that right by specifying "N/A" in the blank where a start-by month could have been named: This Contract price is guaranteed to Buyer only if it is possible for Builder to start construction on or before the month of N/A. If start of construction is delayed beyond this time by Buyer, or due to any ruling or regulation of any governmental authority, or due to any other cause which is not the fault of the Builder, the Contract price may be adjusted to the current list price or to cover any cost increases incurred by Builder. A plausible explanation for Respondent's lack of care in developing reasonable, achievable cost estimates is that Respondent did not consider the fixed-price contract to be a fixed-price contract. Respondent testified that even though the contract on its face is a fixed-price contract, he believed that he had an understanding with the Mastens that the contract was really a "cost-plus" contract. Respondent testified that despite what the contract said, the Mastens had agreed that they would pay whatever the ultimate costs were, even if the prices went up from his estimates, plus an additional $37,000 for Respondent's profit. Respondent testified that the only reason that the contract was written up as a fixed-price contract was to secure the bank loan. That suggestion would be troubling, if true, because the implication is that Respondent was a party to fraud or deception to induce the construction loan. However, there was no credible evidence to support Respondent's attempt to justify recovering full costs, plus full profit, when the fixed price he contracted for proved inadequate. Notwithstanding Mr. Colan's apparent view that there was a secret deal standing behind the written contract, he signed the written contract, is bound by the fixed-price term, and must bear the consequences of his inadequate cost estimations. At some point when the Mastens became concerned about the extent to which they were apparently exceeding the contract price while Respondent was still drawing bank funds from the Mastens' construction loan, Mrs. Masten testified that she told Respondent not to draw any more bank funds. The evidence did not clearly establish whether Respondent violated Mrs. Masten's instructions by withdrawing more bank funds after the instructions were given. The Administrative Complaint had alleged that the Mastens contacted the bank and ordered the bank to make no further disbursements, and that the next day, Respondent attempted to withdraw all remaining funds in the construction loan account. No evidence was presented to substantiate this allegation. Petitioner incurred total costs of $299.36 in the investigation of this matter, excluding costs associated with attorney time.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by Petitioner, Department of Business and Professional Regulation, Construction Industry Licensing Board, finding that Respondent, Thomas Colan, d/b/a Thom Colan Construction, Inc.: Violated section 489.129(1)(g)3. and (1)(m), as charged in Counts Two and Three, and for those violations, imposing a total fine of $3,000.00; Requiring Respondent to pay restitution to the Mastens in the total amount of $30,083.04; Requiring Respondent to pay costs of $299.36; and further Dismissing Count One (based on Petitioner's voluntary dismissal) and Count Four (based on an absence of proof). DONE AND ENTERED this 14th day of April, 2011, in Tallahassee, Leon County, Florida. S ELIZABETH W. MCARTHUR Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of April, 2011.
Findings Of Fact Romie Huntsinger has been an auctioneer since 1970, and was licensed by the State of Florida with license number AU- 0000307 on March 7, 1988, shortly after the profession became regulated by the state. His license has remained current and in good standing since that date. On November 29, 1988, Huntsinger was conducting an auction as principal auctioneer in Orlando, Florida. A friend of his, James Poe, was standing near him when he received an irresistible call of nature (in his words). Huntsinger thrust the microphone at Poe and asked him to sell the next few items (call the bids). There is conflicting testimony as to whether Huntsinger was gone no more than 15 minutes or at least 45 minutes, but it is undisputed that Poe was calling the bids in his absence. James Poe was an auctioneer for many years and had his own business, but when the practice of auctioneering became regulated in 1987, he did not apply for a license. Time is of the essence in the conduct of an auction as each seller is allotted limited minutes for his lot to be offered. It was proper that Huntsinger delegate a substitute so that he could leave the microphone, but there were at least two other licensed auctioneers in the room.
Recommendation Based on the foregoing, including the disciplinary guidelines in Rule 21BB- 1.017, FAC, it is hereby, RECOMMENDED: That the Board of Aucti6neers issue its Final order finding that Romie Huntsinger violated Section 468.389(1)(j), F.S. and Rule 21BB 5.001(1), FAC, and imposing a reprimand and fine of $150.00. DONE and RECOMMENDED this 28th day of February, 1990, in Tallahassee, Florida. MARY CLARK 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 28th day of February, 1990. COPIES FURNISHED: Cynthia Gelmine, Esquire Dept. of Professional Regulation 1940 N. Monroe St., Suite 60 Tallahassee, FL 32399-0792 Romie L. Huntsinger 3119 Illinworth Avenue Orlando, FL 32806 Kenneth D. Easley General Counsel Dept. of Professional Regulation 1940 N. Monroe St., Suite 60 Tallahassee, FL 32399-0792 Ms. LouElla Cook Executive Director Dept. of Professional Regulation Board of Auctioneers 1940 N. Monroe St., Suite 60 Tallahassee, FL 32399-0792
The Issue The issue in this case is whether Respondent Southern Corporate Packers, Inc. owes Petitioners money for watermelons and, if so, how much.
Findings Of Fact Prior to the 1995 growing season, Petitioners and Respondent Southern Corporate Packers, Inc. (Respondent) formed a partnership. Their respective interests were Respondent--40 percent, Petitioner Juman--38 percent, and Petitioner Carter--22 percent. Petitioners agreed to grow the watermelons, and Respondent agreed to sell them and remit the sale proceeds to the partnership after deduction for a standard one cent sales commission and freight costs. Petitioner Juman agreed to contribute farming equipment to the partnership. Petitioner Carter agreed to contribute $10,000 cash, and Respondent agreed to contribute $25,000. Petitioner Juman and Respondent made their respective contributions of equipment and money, but Petitioner Carter may not have made his contribution of money. In any event, the actual contributions were insufficient. The agreement required each partner to advance any additional expenses based on his respective share in the partnership. Petitioner Juman and Respondent made additional contributions of equipment and cash, but Petitioner Carter did not, unless his contribution could be made in services, which the evidence does not address. Problems plagued the farming operation from the start. Petitioners planted crimson sweet watermelons because Petitioner Carter could acquire these seeds inexpensively. Such watermelons are less valuable than the more- marketable sangria watermelons. The watermelons grew poorly. Petitioners failed to produce a single load of large melons. Instead, they produced twelve loads of mediums and nine loads of peewees, for which demand is relatively slight. As agreed, Respondent transported the watermelons to distant markets for sale. Unable to demand market prices, Respondent sold the melons for the highest possible price. In 21 transactions Respondent realized gross proceeds of $59,184.55. The parties dispute the available price for the watermelons. Respondent failed to obtain inspections of the melons, as it was required to do. Despite this failure, Respondent has shown that it obtained the highest available prices for the melons. In transporting the melons Respondent incurred freight charges of $22,288.76 and earned sales commissions of $6780.75. Additionally, Respondent paid an additional partnership expense of $11,799.53 in harvesting costs, which were not its obligation under the partnership agreement. Thus, the total allowable reductions are $40,880.94, leaving Responsible liable to pay the partnership the remaining $18,303.61. A partnership accounting might identify additional setoffs and counterclaims available to Respondent against the partnership or one or both of the partners. However, the record does not permit such an accounting, even if the law were to provide for such a remedy in this administrative proceeding. The central facts are that Respondent acquired watermelons from the partnership, sold the melons on behalf of the partnership, properly deducted from the sales proceeds certain allowable expenses in the form of freight, sales commissions, and harvesting expenses, and improperly retained the remaining $18,303.61 that it should have paid to the partnership. Less Respondent's share of 40 percent of the net proceeds, which Respondent may properly retain, the final balance due at this time to the two partners is $10,982.17.
Recommendation It is RECOMMENDED that the Department of Agriculture and Consumer Services enter a final order requiring Respondent to pay Petitioners $10,982.17 within 10 days of the final order and, absent such a payment, requiring Amwest Surety Insurance Company, after notice of nonpayment, to pay the same amount to Petitioners up to the total amount remaining under the bond. ENTERED on December 20, 1995, in Tallahassee, Florida. ROBERT E. MEALE, 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 December, 1995. COPIES FURNISHED: Hon. Bob Crawford Commissioner of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Richard Tritschler, General Counsel Department of Agriculture The Capitol, PL-10 Tallahassee, FL 32399-0810 Brenda Hyatt, Chief Bureau of Licensing and Bond Department of Agriculture 508 Mayo Building Tallahassee, FL 32399-0800 Ronald W. Carter Roshan Juman 321 7th St. LaBelle, FL 33935 Bryan Arrigo, President Southern Corporate Packers, Inc. 424 New Market Rd. Immokalee, FL 33934 Amwest Surety Insurance Co. Legal Department Box 4500 Woodland Hills, CA 91365-4500
Findings Of Fact Petitioner is a franchised truck dealer for three manufacturers, including Respondent. The parties entered into a three-year franchise agreement on September 17, 1986, which agreement took effect on September 15, 1986 (Dealer Agreement). Under the Dealer Agreement, Petitioner is assigned a 12-county area that includes Polk County, Florida. In March, 1987, John Drakesmith entered into negotiations with R. N. Heintzelman for the purchase of all of the stock of Petitioner. The negotiations culminated in the execution on July 8, 1988, of an Agreement for Purchase, Sale and Redemption of Stock in Heintzelman's Truck Center, Inc. (Stock Purchase Agreement). The transaction was closed on the same day, and Mr. Drakesmith, as the new owner of Petitioner, assumed the management of Petitioner's business at that time. The Dealer Agreement provides that, to the extent permitted by local law, Respondent may terminate the agreement prior to its expiration date in the event of "[a]ny change... in the ownership or active management of [Petitioner] from that indicated [as described above], without the prior written consent of [Respondent]." The Dealer Agreement provides that, to the extent permitted by local law, Respondent may terminate the agreement prior to its expiration date in the event of "[a]ny actual or attempted assignment of this Agreement or any right or obligation hereunder." Around the end of May, 1987, one of Respondent's regional sales managers learned of the negotiations between Mr. Drakesmith and Mr. Heintzelman. On June 24, 1987, J. L. Brown, Respondent's director of dealer relations, telephoned Mr. Drakesmith at his Ford truck dealership in Cleveland to discuss his impending purchase of the stock of Petitioner. Mr. Drakesmith confirmed that a sale was taking place. Mr. Brown indicated that he and some other representatives of Respondent were going to be in Cleveland and would like to meet Mr. Drakesmith. They tentatively agreed to meet on July 2, 1987. By letter dated June 24, 1987, Mr. Brown confirmed the conversation of the same day. The letter informed Mr. Drakesmith that the Dealer Agreement "is a personal service agreement which can not be transferred or assigned." Accompanying the letter was an application package for a Western Star franchise. On July 2, 1987, Mr. Brown, Dennis Trittin, Respondent's parts and service representative, Mr. Roland Smith, Respondent's regional sales manager for the region including Florida, and Richard Dean, Respondent's Great Lakes regional sales manager, met with Mr. Drakesmith at his Cleveland dealership. Respondent's representatives told Mr. Drakesmith that they were looking forward to his marketing their product more aggressively than Mr. Heintzelman had in the past. They discussed Mr. Drakesmith's possible interest in handling Western Star trucks in his Cleveland dealership. Mr. Brown left Mr. Drakesmith with another copy of the application package. Following the July 2 meeting, Mr. Drakesmith concluded that Respondent was very favorably disposed toward having him as a dealer, although he recognized that he had not yet been formally approved. By letter dated July 8, 1987, Mr. Brown confirmed their July 2 discussion of Mr. Drakesmith's "interest in representing the Western Star product line in Orlando and possibly Cleveland." He added that he was looking forward to receiving the completed documentation "in order to formally complete the application process for the Orlando Dealership." Mr. Drakesmith mailed the completed application, together with some but not all materials, to Respondent on July 13, 1987. The materials were mailed to Respondent at the address shown in the application as that to which the application should be mailed. Respondent had moved from that address over one year earlier. When the application package was returned to Petitioner a few days later as undeliverable, Mr. Drakesmith had it remailed promptly to Respondent's correct address. The remailed package was never received by Respondent or, if received, lost prior to its delivery to Mr. Brown, who never received it. Two or three weeks after the closing, Mr. Smith visited Mr. Drakesmith at Petitioner's dealership. At the time, Mr. Heintzelman and his former general manager, Harry Gates, were both gone. The purpose of the visit was for Mr. Smith and Mr. Drakesmith to get acquainted with each other. Sometime after his visit and before September 15, 1987, Mr. Smith told Mr. Brown by telephone that Mr. Drakesmith had taken over Petitioner and was operating the dealership. Between Mr. Smith's visit in late July and September 15, 1987, Mr. Drakesmith had one or two telephone conversations with Mr. Smith concerning pending orders for trucks that Petitioner had submitted and sales in general. At no time during the visit or telephone calls did Mr. Smith mention the receipt, nonreceipt, or approval of Mr. Drakesmith's application. In August, 1987, Respondent received an expression of interest from a third party for a dealership including the Polk County area. At the time, Respondent had no dealers in Florida except for a dealer in Jacksonville and Petitioner. By letter dated September 15, 1987, Mr. Brown gave Mr. Heintzelman, addressed at Petitioner's dealership, notice of the termination of the Dealer Agreement, effective 90 days from the date of the receipt of the letter. The grounds for the termination were that Petitioner had breached the Dealer Agreement by assigning or attempting to assign the agreement and changing its active management or selling or otherwise changing its ownership without Respondent's prior written consent. The letter also stated that Petitioner had violated Florida statutory law by changing its executive management or ownership or assigning the agreement without first giving Respondent written notice and without providing Respondent with the opportunity and information necessary to evaluate and, if appropriate, object to the new owner, manager, or assignee. Copies of the letter were provided to Mr. Drakesmith and the Florida Department of Highway Safety and Motor Vehicles (Department). Mr. Drakesmith telephoned Mr. Brown on or about September 17 to object to the termination. Mr. Brown explained that he had felt that Mr. Drakesmith had lost interest in the Western Star franchise because he had not bothered to submit his application. When Mr. Drakesmith replied that he had sent it in, Mr. Brown said that he had not received it and suggested that Mr. Drakesmith resubmit it. On September 22, Mr. Drakesmith resubmitted the application materials that he had mailed on July 13 and remailed a few days later. After additional materials were requested and provided, Mr. Brown offered Petitioner a new dealer agreement with the same territory as in the Dealer Agreement, except that Polk County would be replaced by two less profitable counties. By letter dated September 22, 1987, the Department informed Petitioner of its receipt of a copy of the September 15 letter and informed Petitioner of its right to protest the proposed cancellation. The letter called Petitioner's attention to Section 320.641(3), Florida Statutes, which was cited in full. The letter also contained a copy of Sections 320.60-320.70, Florida Statutes. The letter informed Petitioner that it had 90 days from the date of the September 15 letter within which to file with the Department a "verified (notarized) complaint" for a determination of an unfair cancellation of the Dealer Agreement. By letter dated October 23, 1987, Petitioner notified the Department of its protest of the intended cancellation. The letter was signed by Mr. Drakesmith as president of Petitioner. The letter bore only the signature of Mr. Drakesmith, which was not notarized. The letter did not contain any information beneath Mr. Drakesmith's signature and title. As a result of a conversation between Henry C. Noxtine of the Department and Mr. Drakesmith, Mr. Drakesmith learned that his October 23 letter did not meet the verification requirement. Lacking the original letter, Mr. Drakesmith had an employee of Petitioner, Eileen C. Mercer, retype the letter and add in the lower right-hand corner of the second page the notation, "Signed before me this Oct. 29, 1987." She then signed beneath the notation and added her notary's stamp showing that her commission expires August 28, 1990. The record does not reflect whether Ms. Mercer applied her notary's seal to the letter. However, at no time did Ms. Mercer require Mr. Drakesmith to swear or affirm that the information in the October 23 letter was true and correct. Following the above-described additions, the letter was promptly resubmitted to the Department. By letter dated November 24, 1987, the Department transmitted the file to the Division of Administrative Hearings on the sole issue of the propriety of the cancellation of Dealer Agreement. The Department's transmittal letter, a copy of which was sent to and received by Mr. Drakesmith, noted that the Department had received a "verified" complaint from Petitioner. Mr. Drakesmith personally performs the duties of a general manager at Petitioner's dealership. Mr. Drakesmith is of good moral character. At no time has Respondent filed a verified complaint for a determination of Mr. Drakesmith's moral character.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered dismissing the complaint of Petitioner for lack of subject-matter jurisdiction. ENTERED this 15th day of July, 1988, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of July, 1988. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 87-5308 Treatment Accorded Petitioner's Findings 1-2. Adopted in substance. Adopted, except that the last sentence is rejected as contrary to the evidence. Adopted, except that the Stock Purchase Agreement was signed on July 8, 1987, and by other parties as well. Adopted in substance. Rejected as irrelevant and legal argument. 7-9. Adopted. 10-11. Adopted in substance. 12-13. Adopted. Adopted, except that reliance is irrelevant. Adopted in substance. 16,18. Adopted. 17. Rejected as irrelevant. Treatment Accorded Respondent's Findings 1,3,4. Adopted. 2. Rejected as irrelevant. Adopted in substance. Rejected as irrelevant. Adopted. 8,14,16. Rejected as irrelevant. 15. Adopted in substance. 17,18. Adopted. 19-21. Rejected as irrelevant. 22-23. Adopted. Adopted in substance. However, the materials that Mr. Drakesmith sent to Respondent and when he sent them is irrelevant. Rejected as recitation of testimony and cumulative. Adopted, except that second sentence is rejected as irrelevant. Rejected as irrelevant. 28,29. Adopted in substance. 30-32. Rejected as irrelevant. Adopted. Adopted in substance. 35-37. Rejected as irrelevant. Adopted, except that last 17 words are rejected as irrelevant. Adopted, except that the cause offered for the Issuance of the termination notice is against the greater weight of the evidence. 40-44. Adopted. Rejected as irrelevant. Adopted in substance. Rejected as unclear. Adopted, except that the last 16 words are rejected as legal argument. 49-51. Adopted in substance. 52-57. Rejected as irrelevant. COPIES FURNISHED: Joseph E. Foster, Esquire Akerman, Senterfitt & Eidson Post Office Box 231 Orlando, Florida 32802 Dean Bunch, Esquire Rumberger, Kirk, Caldwell, Cabaniss, Burke & Wechlser, P.A. 101 North Monroe Street, Suite 900 Tallahassee, Florida 32301 Enoch John Whitney General Counsel Department of Highway Safety and Motor Vehicles Neil Kirkman Building Tallahassee, Florida 32399-0500
The Issue Whether Petitioner, instead of Intervenor, is entitled to the award of RFP-DOT-98-99-4005.
Findings Of Fact The Department issued and advertised RFP-DOT-98-99-4005 (RFP) for bridge tending, maintenance and repair service contracts for movable bridges in St. Lucie and Martin counties. Theresa Martin has been the Department's District IV Contractual Services Coordinator for the past four years. Ms. Martin is responsible for reviewing all requests for contractual services contracts, and did so in the present case. In preparing RFP’s, including the RFP that is the subject of this proceeding, the Contractual Services Office follows the statutory and rule provisions of Section 287.057, Florida Statutes, and Chapter 60A, Florida Administrative Code, and utilizes the Department's Contractual Services Acquisition Procedures, Procedure Number 357-040-020-D. The RFP specifications were not protested. Three proposers submitted timely responses to the RFP: General Electric Industrial Services(GE), Old Tampa Bay Enterprises (OTBE), and C&S Building Maintenance (C&S). The Department determined that the proposals of all three vendors were responsive. Having determined that the proposals were responsive, the Department reviewed and scored the proposals in accordance with the criteria listed in the RFP. The RFP established five (5) different criteria upon which the Department was to evaluate each proposal. The criteria and the maximum allotted points for each criteria were as follows: Management Plan . . . . . . . . .35 points Technical Plan . . . . . . . . .35 points 3. Price . . . . . . . . . .. . . . 25 points Certified Minority Business .. . .5 points Executive Judgment . . . . . . . .5 points GE received the highest rating among the three proposers for its proposal and OTBE was rated second. Based on these ratings, the Department of Transportation posted its intent to award the project to GE. The RFP required submission of separate price and technical proposals. The price proposal included forms for both the proposer’s price and for certification of the proposer’s intention with respect to the use of Disadvantaged Business Enterprises (DBEs). The price proposal and technical proposal were to be submitted to the Department at the same time but in separate sealed envelopes. The price proposal and the technical proposal were then opened separately and scored separately. The technical proposals were properly reviewed and scored by a technical review committee. After the technical proposals were scored, the members of the technical review committee reviewed the price proposals and provided the Department’s contract administrators with their views as to whether the price proposal was acceptable. The technical review committee concluded that GE’s pricing was acceptable, although it exceeded the Department’s estimated budgetary ceiling. The RFP expressly provides: "This is an Indefinite Quantity Contract for which the Department has established an estimated budgetary ceiling amount of $480,000.00. The Contractor shall not exceed the estimated budgetary ceiling amount without an executed Supplemental Agreement. A Supplemental Agreement to increase the estimated budgetary ceiling amount may be entered into based upon Department need and availability." The Department did not interpret the "estimated budgetary ceiling" as an absolute cap. Rather, the Department considered the "estimated budgetary ceiling" a budgeting tool that gave the proposers an indication of the Department’s estimation of the dollar amounts necessary and available for the contract. The estimated budgetary ceiling amount is typically based upon the Department's recent expenditures in similar contracts. Given that the budgetary ceiling in the RFP is an estimate, the RFP specifically authorizes the Department to amend or supplement the contract with additional dollars during the course of the project. The budgetary modification process provided by the execution of Supplementary Agreements for indefinite quantity contracts occurs on a regular basis in District IV and is provided for in the Department's governing Contractual Services Procedures. Consistent with the Department's interpretation of the "estimated budgetary ceiling," a price proposal that was higher than the budgetary estimate would not be considered irregular and rejected as non-responsive. OTBE apparently believed that the RFP’s statement of an "estimated budgetary ceiling" created an absolute cap on the amount of permissible bids. Based on its mistaken belief, OTBE submitted a price of $479,987.00, three dollars below the Department’s estimated budgetary ceiling amount. Both GE and C&S bid amounts that exceeded the estimated budgetary ceiling with GE’s total price bid being $575,100.00. Although the price proposals of GE and C&S exceeded the estimated budgetary ceiling of $480,000.00, the Department did not consider either of these proposals non-responsive. The Department’s decision in this regard was consistent with its definition and interpretation of estimated budgetary ceiling. To determine the number of points each proposal would be awarded in the price category, the Department applied the mathematical formula that was specified in the RFP. According to the RFP: THE PRICE USED IN AWARDING POINTS WILL BE THE GRAND TOTAL SHOWN ON PRICE PROPOSAL FROM "C." ALL RESPONSIVE PRICE PROPOSALS WILL BE SCORED IN RELATION TO THE LOWEST PRICE PROPOSAL USING THE FOLLOWING FORMULA: (Low proposal/subject proposal x 25 points = awarded price points) The points awarded for the price proposal after applying the aforementioned mathematical formula were applied to the price proposal and then added to the particular proposer’s technical proposal point total. Pursuant to the formula specified in the RFP, the low price proposal received 25 points and the other proposals received a proportionate share of 25 points equal to the ratio of the low price to the proposer’s price. The Department reviewed and scored the prices bid by GE, OTBE, and C&S using the price formula established in the RFP. OTBE, with the low bid a price of $479,100.00, was awarded 25 points in the price category. The RFP formula was also applied to GE’s price bid of $575,100.00; as a result thereof, GE was awarded 20.87 points in the price category. OTBE received the benefit of its low bid by receiving the maximum points in the price category. There was no minority business enterprises or DBE goal set for this RFP. However, pursuant to Section 287.057(6)(c), Florida Statutes, the Department provided a point preference for proposers that certified that they would subcontract at least 3 percent to 10 percent of the contract value to certified DBEs. The RFP provided that: The Department will add up to 5 points to the scores of firms (non-CDBE) utilizing Certified DBE’s as subcontractors for services or commodities as follows: 10% and above of total project dollars - 5 points, 3% - 9.9% of total project dollars - 2 points Complete and attach the DBE Preference Points Certification Form (Form "D") in the Price Proposal if CDBE preference points are to be considered. The DBE Preference Certification Form was included as part of the RFP package and was required to be submitted as part of each proposer's price package. Furthermore, the face of the form also required each proposer to declare if it intended to subcontract part of the work to DBEs and specified the scoring for certification of an intent to use DBEs. The DBE Preference Certification Form also advised vendors that a proposer who certified an intent to subcontract at least 10 percent of the contract was awarded 5 points; that a proposer who certified an intent to subcontract more than 3 percent, but less than 10 percent, was awarded 2 points; and that a proposer who did not commit to an intention to subcontract to DBEs would receive no additional points in this category. The purpose of utilizing the DBE Preference Form Certification is for the Department to provide an incentive for contractors to utilize DBEs on Department projects and to bind the proposer to the commitment that is certified on DBE Preference Certification Form. However, when the Department utilizes the form, it is a discretionary election of the proposer to take advantage of utilizing a DBE and receive the additional points. OTBE’s DBE Preference Certification Form stated that OTBE did not intend to use DBEs. Thus, OTBE did not receive any points in the certified business criteria. GE stated on its DBE Preference Certification Form that it intended to subcontract at least 10 percent of the contract to DBEs. Based on GE's certification of an intention to use DBEs for 10 percent of the contract work, in accordance with the provision of the RFP, the Department awarded GE 5 points. On the DBE Preference Certification Form, there was a place for the proposer to list the DBEs it proposed to use and to indicate the type of work and/or commodities that the DBEs would provide. On its DBE Preference Certification Form, GE listed the two DBE entities that it intended to use on the project: Advanced Marketing Consultants and J.C. Industrial Manufacturing Corp. (JC Machines). With regard to the type of work that could be subcontracted to these DBEs, GE indicated on its DBE Preference Certification Form that Advanced Marketing Consultants could provide payroll services and that JC Machines could perform mechanical repairs. The Department’s District IV Contracting Office reviewed GE’s price proposal, including GE’s DBE Preference Certification Form. As part of that process, the District IV contract administrator checked with the Department’s Central Office in Tallahassee, Florida, and confirmed that the DBE’s listed in GE’s proposal were certified DBEs. There is sufficient work available under the contract specifications for GE to meet its DBE commitment using the DBEs that GE listed in its proposal. Moreover, the DBEs listed by GE are capable of performing much of the work required in the RFP’s Scope of Services. The RFP required that each proposal include the names of qualified personnel that are able to perform the job duties and responsibilities outlined in the RFP specifications and that the proposer intended to use if it were awarded the contract. In this case, all three proposers, GE, OTBE, and C&S, submitted the same three key personnel for the bridge superintendent, bridge electrician, and bridge mechanic positions. At the time the proposals were submitted, the key personnel included in those proposals were all working in the positions for which they were listed. Apparently, these individuals had agreed to continue in their positions regardless of which proposer was awarded the contract. The RFP did not require that the personnel listed in a proposal be current employees of the proposer. Rather, the Department expected that these individuals would be employed by the proposer after the vendor was awarded the contract. The RFP specifies the percentage of work that the successful proposer may sublet under the contract. Section 6.0 of the RFP's Scope of Services (Section 6) provides in relevant part: The Contractor shall not sublet, transfer, assign or otherwise dispose of the contract or any portion thereof, or his right, title or interest therein without written approval of the Maintenance Engineer otherwise and in accordance with this agreement. Contractor shall not sublet more than fifty percent (50%) or [sic] a non set-a-side project. Based on the above-quoted provision, the successful proposer, as the prime contractor, can subcontract no more than 50 percent of the value of the contract. Notwithstanding the RFP’s limitation on the percentage of work that may be subcontracted, the RFP did not require proposers to state what percentage of the contract work they intend to subcontract. Moreover, the RFP did not require the vendors to submit proposed subcontracts nor did the RFP specify required terms for subcontracts. Therefore, at the time the RFP’s were evaluated, the Department did not and could not determine precisely what portion of the contract a proposer intended to subcontract or to whom work would be subcontracted. The Department interprets Section 6 to be a contract performance issue. The reason is that the percentage of the work that is subcontracted by the prime contractor after execution of the agreement is monitored by the Department during the performance of the contract. Such monitoring is accomplished by the Department’s requiring that all requests to subcontract portions of the contract be approved by the Department's project engineer. GE or any other successful proposer is obligated to comply with all the requirements and specifications of the RFP and contract. Failure of a successful proposer to comply with these requirements is a contract performance issue and not an issue that the Department is required or able to address at the proposal review and selection phase. In the instant case, the Department intended to award the contract to the responsive and responsible offerer whose proposal it determined to be the most advantageous to the State taking into consideration price and other criteria. GE was the apparent highest ranked, responsive, and responsible proposer or offerer with a total score of 87.20, including 20 points in the price category and 5 points for certifying its intent to use DBEs. OTBE was the second ranked proposer with 82.67, including 25 points for the price category; OTBE properly received no points for the DBE Preference Certification.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Transportation enter a final order awarding the contract to GE Industrial Systems and dismissing Petitioner’s challenge to the award of RFP-DOT-98-99- 4005. DONE AND ENTERED this 22nd day of June, 1999, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD 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 22nd day of June, 1999. COPIES FURNISHED: Thomas F. Barry, Secretary ATTN: James C. Myers, Clerk of the Agency Proceedings Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0450 Pamela Leslie, General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0450 Brian F. McGrail Assistant General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street, Mail Station 58 Tallahassee, Florida 32399-0450 Brant Hargrove, Esquire 1545 Raymond Diehl Road, Suite 150 Tallahassee, Florida 32301 Jonathan Sjostrom, Esquire Steel, Hector & Davis, L.L.P. 215 South Monroe Street, Suite 601 Tallahassee, Florida 32301-1804
The Issue At issue in this proceeding is whether the decision of the respondent, Department of Corrections (Department), to award the subject bid to intervenor, Doctors and Physicians Laboratories, Inc. (Doctors), comported with the essential requirements of law.
Findings Of Fact Background On October 16, 1991, the Department of Corrections (Department) issued invitation to bid number 91-CO-5369 (hereinafter "the ITB"), which sought to secure appropriate services to perform drug tests on certain applicants for employment and existing employees of the Department. The deadline for submitting bids was established as 11:00 a.m., November 7, 1991. At the time of the deadline, the Department had received four bids, including those of petitioner, Toxicology Testing Service, Inc., and intervenor, Doctors and Physicians Laboratories, Inc. (Doctors). Petitioner's bid was $372,000, and Doctors' bid was $315,491.60. Based on its evaluation, the Department ranked Doctors first and petitioner second, with composite scores of 91.67 and 90.38, respectively, and proposed to award the contract to Doctors. Petitioner filed a timely formal written protest to contest the Department's decision, and charged that the Department materially departed from the evaluation criteria contained in the ITB. The Invitation to Bid Pertinent to this case, section 4.7 of the ITB established the evaluation criteria to be used in determining the acceptability of the bids as follows: 4.7 Evaluation Criteria Criteria Point Value 1. References 5 2. Firm Profile 5 3. Firms Qualifications 15 Understanding of Scope of Services 25 Bid Price 50 100 And, section 4.7.5 of the ITB established the following methodology to be utilized in awarding points for the bid price criteria: The award for bid price shall be determined as follows: The Bidder who submits the lowest bid price will be awarded 50 points. All others bidders will be awarded points based on the following formula: Bid Price Points = 50 X [1-A/B] where: A = the difference between the percentage of the bid being evaluated and the low bid(s). B = the low bid. The lowest bid price will be computed by multiplying the unit prices for Items 1, 2 and 3 for all three years by the estimated quantity. The estimated quantity is for bidding purposes only and is not a guarantee. The total annual cost for Items 1 and 2 for all three years will be added to determine the Total Cost for all three years. The vendor with the lowest Total Cost will be awarded the 50 points. Negative points will not be awarded. Pursuant to the provisions of section 5.13 of the ITB, the contract was to be awarded to the bidder that received the highest overall point total under the criteria established by section 4.7 of the ITB. The Department's evaluation and the protest Based on its evaluation of the bids, the Department's evaluation committee awarded petitioner 49.34 points for its technical proposal (items 1-4 of the evaluation criteria) and Doctor's 41.67 points for its technical proposal. Bid price points were then established through a preexisting computer program, which derived 41.04 points for petitioner and 50 points for Doctors. When totalled, petitioner received 90.38 points and Doctors received 91.67 points. Accordingly, the Department proposed to award the contract to Doctors. Petitioner filed a timely protest to contest such award. The gravamen of that protest is petitioner's contention that the Department applied a methodology other than that established by the ITB to derive the bid price points and that had it utilized the methodology established by the ITB petitioner would have received the most points and been the prevailing bidder. 1/ Consistent with petitioner's contention, the proof demonstrates that the computer program used to derive the bid price points and the methodology established by the ITB to derive such points differed with regard to the definition of A in the formula, discussed supra. In the computer program, factor A was defined as the difference between the price of the bid being evaluated and the low bid. In the ITB, factor A was defined as the difference between the percentage of the bid being evaluated and the low bid. The Department was not, however, aware of this dichotomy until the subject protest, believing that its ITB conformed with the methodology it had previously programed for its computer, and, at hearing, offered proof, which is credited, that use of the word "percentage" in the definition of A was a typographical error which should have read "price." Notably, the Department heavily weighed price (50%) in its ITB, and it is apparent the Department intended to use a formula that would create a difference in price scoring that was relative to any difference in the bid prices. Use of the formula, as correctly defined in its computer program, would accomplish such goal. Use of the formula, as incorrectly defined by the ITB and interpreted by petitioner in these proceedings, would not accord any meaningful weight to price. 2/ Under such circumstances, it cannot be reasonably concluded that the Department departed from the essential requirements of law when it declined to apply the methodology as interpreted by petitioner to award the contract. Moreover, for the reasons that follow, petitioner has failed to demonstrate that the Department's decision to stand by its award based on the correctly defined methodology departed from the essential requirements of law. Here, the proof demonstrates that petitioner, upon receipt and review of the ITB, was well aware that the formula for awarding points based on price was nonsensical, and most likely, in error. 3/ Notwithstanding, petitioner took no action under the provisions of general condition 6 and special condition 4.4 of the ITB to raise any question or seek any clarification or interpretation of the formula from the Department. 4/ Rather, petitioner submitted its best price offer, more likely than not, without reliance on the erroneous formula set forth in the ITB. 5/ Under such circumstances, it cannot be concluded that the Department's award of the contract, based on an application of the correct definition of factor A, accorded any bidder an unfair advantage or otherwise departed from the essential requirements of law.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be rendered dismissing the subject bid protest. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 20th day of May 1992. WILLIAM J. KENDRICK 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 May 1992.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the administrative complaint filed against H. Ernest Morris, Sr. be DISMISSED with prejudice. DONE and ENTERED this 3rd day of May, 1984, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of May, 1984. COPIES FURNISHED: Tina Hipple, Esquire P. O. Box 1900 Orlando, Florida 32802 Carmine M. Bravo, Esquire 1450 State Road 434 Longwood, Florida 32750 Steven H. Coover, Esquire P. O. Drawer H Sanford, Florida 32771 Fred M. Roche, Secretary 130 North Monroe Street Tallahassee, Florida 32301 Mr. Harold R. Huff, Director Division of Real Estate 400 West Robinson Street Orlando, Florida 32801 ================================================================= AGENCY FINAL ORDER ================================================================= STATE OF FLORIDA DEPARTMENT OF PROFESSIONAL REGULATION FLORIDA REAL ESTATE COMMISSION DEPARTMENT OF PROFESSIONAL REGULATION, FLORIDA REAL ESTATE COMMISSION Petitioner, vs. CASE NO. 0034049 DOAH NO. 83-3273 H. ERNEST MORRIS, SR. Respondent. /
