Findings Of Fact State Project No. 46090-3511 (the project) is for construction of the West Bay Bridge on State Road 79 in Bay County, Florida. Competitive bids on the project were solicited in February, 1990. The bid letting on the project was held in March, 1990. The Petitioner, Fairchild, the Hardaway Company and ten other contractors bid on the project. The Hardaway Company submitted the lowest bid on the project in the amount of $9,487,258.17. Fairchild submitted the next lowest bid in the amount of $9,835,279.34. Divergent Unit Prices and Imbalances. The part of the Hardaway Company's bid relating to construction of the foundation for the approaches to the bridge (the "structural bid") is obviously below reasonable cost in several respects. The contract specifications require the use of sand fill, shell fill, reinforcement grid (biaxial type 2), and Class III (seal) concrete. The Hardaway Company's unit prices for these items were, respectively, one dollar per cubic yard for the sand fill, fifty cents per cubic yard for the shell fill, twenty-five cents per square yard for the reinforcement grid, and ten cents per cubic yard for the Class III seal concrete. As a result, the Hardaway Company's bid for these items is obviously significantly below reasonable cost and approximately $95,500 below what Fairchild bid for the same portion of the contract. In contrast to the sand fill, shell fill, reinforcement grid and Class III concrete, the Hardaway Company's bid on some of the other parts of the structural bid were relatively high. The reinforcing steel for the substructure (Item 415-1-5) was bid at approximately twice reasonable cost (80 a pound versus, e.g., 42 in Fairchild's bid), resulting in $609,936.80 attributable to that part of the bid versus, e.g., $320,216.82 for Fairchild. The statistical average (the DOT's so-called "average 2") for the other serious bidders under this item also was 42 a pound. The Hardaway Company also bid obviously in excess of reasonable cost for the lump sum item of mobilization for pile installation--$600,000 versus $125,000 in Fairchild's bid and less in the bids of several of the others bidders. (The statistical average for the other serious bidders under this item was $225,000.) But the Hardaway Company bid only $60,000 for the lump sum item for removal of existing structures (versus $160,000 in Fairchild's bid) and only $30,000 for the lump sum item for removal and disposal of fender system (versus $110,000 in Fairchild's bid). The portion of the Hardaway Company's bid attributable to mobilization for the roadway work is significantly less than the Fairchild bid under this item ($200,000 versus $375,000) and partially counterbalances the excess in the part of the Hardaway bid for mobilization for the pile installation. The portion of the Hardaway Company's bid attributable to clearing and grubbing also was high, at $20,000 an acre versus a statistical average of $4,200 an acre for the other serious bidders, resulting in $216,000 for the Hardaway Company bid versus, e.g., $32,400 for the Fairchild bid and the $45,360 statistical average. DOT Review Procedures. Section 2-6 of the DOT's Standard Specifications applicable to the project provides: 2-6 Rejection of Irregular Proposals. A proposal will be subject to being considered irregular and may be rejected if it shows omissions, alterations of form, additions not called for, conditioinal or unauthorized alternate bids, or irregularities of any kind; also if the unit prices are obviously unbalanced, either in excess of or below the reasonable cost analysis values. The DOT is in the process of formulating a policy on the use of the Technical Review Committee in the bidding process. A proposed procedure has been developed, which has not yet been made final and has not yet been signed by the Secretary of the DOT, under which the Technical Review Committee would review the low bid on each contract, among other things not applicable to this case, for "any significant irregularities in unit bid prices" and for "unbalanced bidding." The DOT has not yet defined "any significant irregularities in unit bid prices" or "unbalanced bidding" for purposes of defining the event that triggers review by the Technical Review Committee. The DOT Director of the Office of Construction, Robert Buser, is of the opinion that the unit prices the Hardaway Company bid for the sand fill, the shell fill, the reinforcement grid and the Class III seal concrete are "significant irregularities in unit bid prices." On the other hand, the DOT's Preliminary Estimates Engineer, Robert Griner, who, unlike Buser, is a member of both the Technical Review Committee and its Preliminary Technical Subcommittee, and is of the opinion that the Hardaway bid for the sand fill, the shell fill, the reinforcement grid and the Class III (seal) concrete are "mathematical imbalances," not "significant irregularities in unit bid prices," which he would define as bids that omit a unit price, whose numerical values do not match words used to express the values, or that are not signed. Under Griner's approach, which was followed in this case, the Preliminary Technical Subcommittee looks at "mathematical imbalances" to see if they are "material imbalances." If the Preliminary Technical Subcommittee decides that it is not a "material imbalance," it simply reports this finding at the outset of the meeting of the Technical Review Committee, which accepts the finding and does not itself consider the matter any further. Only if the Preliminary Technical Subcommittee reports a "material imbalance" does the Technical Review Committee further consider the question. Front-end Bidding. Under the DOT contract for the project, like other items in the specifications, mobilization and land clearing and grubbing are paid in installments as the work proceeds. But, unlike the other items, all of the portion of the contract attributable to mobilization and land clearing and grubbing is paid by the time the entire project is half completed. Similarly, a contractor is paid for reinforcement steel (substructure) when it is delivered to the site. As a result, by shifting dollars in a bid to these "front-end," lump sum items, a contractor can manipulate the bid process and contract to reasonably insure himself of early payment of these inflated items regardless what may happen to the project later. In analyzing these front-end, lump sum items, Griner treated them (along with the unreasonably low bids on the sand fill, shell fill, reinforcement grids and C III seal concrete) as "mathematical imbalances." Following the guidance of a Federal Highway Administration (FHWA) memorandum, dated May 16, 1988, on the subject of "Bid Analysis and Unbalanced Bids," Griner analyzed the Hardaway bid to be sure it would not be susceptible to cost overruns (it was not) and to be sure the quantities were correctly estimated (they were). He also analyzed the additional cost to the DOT of paying the Hardaway Company early (by the half way point of the project) for the inflated front-end items to determine whether the "mathematical" imbalance was "material," i.e., whether "the mathematically imbalanced bid will result in the lowest ultimate cost to the Government." Based on a twelve percent interest rate, Griner calculated that the inflated front-end items would cost the DOT approximately an additional $98,000, 1/ still much less than the difference between the low Hardaway bid and any other bid. Based on this calculation, Griner concluded that the "mathematical imbalance" in the Hardaway bid was not a "material imbalance" and did not require the award of the bid to Fairchild or one of the other bidders. Griner overlooked and did not apply another portion of the method of analysis in the FHWA memorandum on "Bid Analysis and Unbalanced Bids" that states: There are numerous reasons why a bidder may want to unbalance his/her bid on a contract. One reason is to get more money at the beginning of the project. The bidder does this by overpricing the work done early in the project. This is called "front loading" the contract. The leading case in the "front loading" area is Matter of: Riverport Industries, 64 Comp. Gen. 441 (1985). Here the Comptroller General held that if the bid is front loaded, regardless if it is the lowest bid, it "should be viewed as materially unbalanced since acceptance of the bid would result in the same evils as an advance payment. An advance payment is prohibited by law." The "front loading" may also be materially unbalanced due to the cost of money that must be paid out early versus over the normal construction fo the project. Under the Hardaway Company bid, the pile mobilization, the land clearing and grubbing, and the reinforcement steel (substructure) parts of the bid are "front-ended." 2/ Under the method of analysis suggested by the FHWA memorandum, the Hardaway Company would be paid approximately $428,000 in "advance payments" under these two items if it is awarded the contract. Approximately $375,000 in pile mobilization, $183,600 in land clearing and grubbing, and $289,700 in the reinforcement steel were shifted to these front- end items from the unbalanced sand fill, shell fill, reinforcement grid, and Class III (seal) concrete items. These dollars The shifted dollars are estimated by taking the difference between the statistical average for these items and the Hardaway bid on them. Since roiughly half of the shifted dollars would be paid earlier than they would be paid if they were bid under the sand fill, shell fill, reinforcement grid and Class III (seal) concrete items, the amount of "advance payment," under the FHWA analysis would be approximately $428,000. Griner did not explain why he only followed part, but not all, of the method of analysis suggested by the FHWA memorandum, other than to say he overlooked it. But he also testified that it is common practice for contractors to submit mathematically unbalanced bids, and the DOT always analyzes them the way he did in this case. Indeed, in the March, 1990, bid letting, Griner found "mathematical imbalances" in 21 of the 29 low bids but no "material imbalances." The Fairchild bid also contains "mathematical imbalances." It also "front-ends" several items. The total dollar value of the "front-ending" in the Fairchild bid (including roadway mobilization) closely approximates that found in the Hardaway bid and, under the FHWA analysis, would result in approximately the same amount of advance payment. Under Section 101-2.2 of the DOT's Standard Specifications for this project, contractors are limited to a maximum of ten percent of the total contract for mobilization. The Hardaway Company's total mobilization bid is within the maximum under the specifications. Notwithstanding the imbalances in the Hardaway bid, and the so-called "advance payments" that would result from the "front-ending" in the Hardaway bid, the Hardaway bid remains the lowest and best bid on the project, and it is the best interest of the DOT and the public to award the contract to the Hardaway Company. Even if the Hardaway Company had bid the sand fill, shell fill, reinforcement grid, and Class III (seal) concrete items exactly as Fairchild did, Hardaway still would be low bidder. "Value Engineering" and Alleged Alternative or Contingent Bidding. Inferences reasonably could be drawn from the evidence that the Hardaway Company may intend to propose to the DOT that the approach to the bridge be re-engineered so as to eliminate the need for the sand fill, the shell fill, the reinforcement grid and the C III (seal) concrete. If the DOT accepts such a proposal, the contract between the DOT and the Hardaway Company would have to be modified. If the re-engineered project were to allow the Hardaway Company to do the job for less than its bid price, half (or, if the proposal is innovative or unique, up to 80%) of the savings would be paid to the Hardaway Company under what the DOT calls "value engineering." Under DOT procedures, "value engineering" proposals are not made or evaluated until after the original contract is signed with the successful bidder. It is not an alternative bid or a contingent bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent, the Department of Transportation, enter a final order dismissing the bid protest filed by W. R. Fairchild Construction Company, Ltd., and awarding State Project No. 46090-3511 to the Hardaway Company. RECOMMENDED this 30th day of July, 1990, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 30th day of July, 1990.
The Issue Whether Saxon Business Products, Inc.'s ("Saxon") response to the Department of General Services' invitation to bid for walk-up convenience copiers should be disqualified on grounds that: Saxon's omission of a supply price list was a material deviation from the bid specifications and conditions; and Saxon's walk-up convenience copier, model "Saxon 300," failed to prove two-sided copy capability.
Findings Of Fact I. Invitation to Bid On June 10, 1981, DGS issued invitation to Bid No. 544-600-38-B ("ITB") entitled, "Walk-Up Convenience Copiers; Bond Paper and Magazine Finish Bond Paper." The ITB proposes an annual contract under which state agencies and institutions can purchase copying machines. It contains general and special conditions and specifications, and warns vendors that bids that do not comply with such conditions "are subject to rejection." (Testimony of Celnik) The ITB specifications divide copiers into two groups: Group I, plain bond copiers, Group II, magazine finish copiers. The copiers are further categorized by type: Type I indicates minimum features; Type II indicates two- sided copying capability; Type III indicates one reduction capability; and Type IV indicates two or more reduction capabilities. These types are further separated into 12 classes on the basis of speed and volume (P-1.) The ITB special conditions instruct bidders to submit bid sheets 2/ breaking down all copying costs to a per-copy basis. Bids are to be evaluated and contracts awarded to bidders submitting the, lowest cost per copy in each category of copier. Cost per copy is calculated by using a specific cost formula. (P-1.) The ITB cost formula contains three components: machine cost, labor cost, and supply cost. DGS proposes to disqualify Saxon's bid in several categories of copiers for failure to supply a supply price list required by the supply cost component. This component provides, in relevant part: C) SUPPLY COST - The bidder shall compute supply costs on the Manufacturer's Brand. If there is an existing state con- tract for supplies for the manufacturer's brand equipment, the state contract price may be substituted. Supply costs will be rounded to six (6) decimal points. All other costs will also be rounded off to six (6) decimal points. The volume price used by the vendor to compute supply cost shall be based on the monthly median vol- ume of the type and class being bid. Supply cost submitted shall be firm for the contract period, except for paper, and all supply costs shall be current market price, verifiable. Vendor must submit supply price lists with his bid to substantiate that correct price vol- umes were used, unless state contract prices were used. A contract award may include supplies if deemed in the best interest of the State. By electing to substitute state contract supplies, the vendor is certifying that his equipment, using said supplies, will meet all per- formance requirements of this bid and of the equipment manufacturer. NOTE - All cost formulas will be verified by the Division of Purchasing and errors in extension will be corrected. In the event incorrect supply cost volumes are used by a bidder, the Division of Purchas- ing will adjust these costs to the median volume range. (e.s.)(P-1.) The purpose of the supply price list requirement, included in DGS's 1980 and 1981 ITB for convenience copiers, is to enable DGS to verify the supply cost figures shown on a vendor's bid sheets; in this way, DGS can insure that all vendors are using correct quantity pricing on their bid sheets. 3/ (In the past, some bidders had used lower supply prices, which were tied to high volume purchases; but those volumes frequently exceeded the state's needs and the median volumes specified by the ITB for each category of copier.) The verification procedure followed by DGS in both 1980 and 1981 involves checking the vendor's bid sheets against the prices shown on the supply price list. 4/ If DGS finds an inconsistency between the two, it "corrects" the bid sheet supply cost upward or downward to reflect the price shown on the supply price list. 5/ Such a bid sheet correction would also change the total median cost per copy, the factor used to evaluate competing bids. DGS also checks the supply list to determine whether it contains current market prices. (Testimony of Hittinger, Eberhard.) If a vendor fails to submit a supply price list, DGS cannot verify that the supply prices used on the bid sheet (to compute total median cost per copy) accurately reflect the median volumes specified in the ITB. Neither can DGS determine whether the supply prices used on the bid sheet are set prices, which do not vary with volume, or volume prices, which do; the bid sheets, on their face, do not reveal which type of pricing is being used. (Testimony of Eberhard; P-1.) After sealed bids are publicly opened, DGS has an established practice of not allowing any bidder to submit additional material which could alter price or other information previously submitted on bid sheets. DGS does, however, accept late information if it can be corroborated by an independent source. For example, a bidder might -- after bid opening -- supply its corporate charter number, which can be easily verified by contacting the Department of State. (Testimony of Hittinger, Eberhard.) The ITB special conditions also require DGS to test and approve copiers prior to bid opening. Copiers which are not tested and accepted by DGS are ineligible for a contract award: EQUIPMENT APPROVAL - Each item of equipment bid shall have been tested by the Division of Purchasing prior to the bid opening time and date for performance and reliability under normal working con- ditions. Any bidder whose equipment has not been tested shall provide a model of the equipment on which he intends to bid to a specified testing station, complete with all supplies, at no expense to the State. Testing will extend for a period of twenty (20) working days. In the event evaluation and acceptance of untested ma- chines has not been accomplished prior to the bid opening date and time, such machine shall not be eligible for an award. (P-1.) II. Bid Opening: Saxon's Failure to Submit Supply Price List Prior to the 1981 bid opening, Saxon failed to submit a supply price list in connection with its bid. This was apparently an oversight on its part; a year earlier, it had furnished a supply price list in response to a similar ITB for convenience copiers. Because of Saxon's omission, DGS was unable to verify the supply prices used by Saxon on its bid sheets or determine whether Saxon was utilizing set or volume prices. (Testimony of Eberhard, Celnik, Hittinger.) After bid opening, Saxon notified DGS that the supply prices shown on its bid sheets were set supply prices -- unit prices which do not vary with volume -- and confirmed that they are the supply prices which it now offers to the state. (Testimony of Celnik.) In its evaluation of the bids, DGS applied the requirement of a supply price list equally to all bidders. All bidders who omitted a supply price list were informed that they were disqualified. Saxon's bid was disqualified in five copier categories: Group I, Type I, Class I; Group I, Type I, Class II; Group I, Type I, Class IV; Group I, Type II, Class I; and Group I, Type II, Class II. At least 11 vendors, however, did submit supply price lists with their bid sheets; approximately one-third were set price lists, the remaining were volume price lists. (Testimony of Eberhard; P-3.) If a vendor could submit a supply price list after the bid opening, it could effectively decrease or increase its bid. (This is so because, in case of a conflict between the bid sheet supply price and the supply price list, the price list value will prevail. A change in the bid sheet supply price will change the cost per copy figure the determining factor in awarding contracts.) A vendor submitting a late supply price list would have an unfair advantage since it could change its bid after bid opening while its competitors could not. The competitive nature of the bidding process would be impaired. (Testimony of Hittinger, Eberhard.) Furthermore, if late submittal of a supply price list was allowed, a bidder could disqualify itself by refusing to provide it; the bidder would then have the advantage of revisiting its bid and -- if it chose -- withdrawing it after bid opening. The opportunity to withdraw a bid -- after bid opening -- would be an advantage not enjoyed by those who timely submitted supply price lists with their bids. (Testimony of Hittinger, Eberhard.) In some copier categories, the vendors who omitted supply price lists were the low bidders. If DGS disqualifies them for their omission, it must award the contract to the next highest bidder. The difference between those low bids and the next higher bid is substantial -- in some cases exceeding 23 percent. 6/ (Testimony of Celnik, Eberhard, Nee, Reinhart.) III. Failure of "Saxon 300" to Demonstrate Two-Sided Copying Capability In accordance with the ITB, Saxon submitted its "Saxon 300" copier to DGS for evaluation and testing. Prior to bid opening, DGS conducted a 20-day test of the machine. The "Saxon 300" machine which DGS tested lacked two-sided copying capability. It could reproduce clearly on one side, but not on the other. The "Saxon 300" sales literature and instruction manual submitted with the machine did not represent that the machine had two-sided copying capability. (Testimony of Nee; 1-5, 1-6, 1-7, R-2.) The "Saxon 300" may have two-sided copying capability, but only after special modifications are made to the copier. These modifications include removal of a roller device, replacement of the heating element, and replacement of the blower system. Saxon did not indicate at the time of testing, or in its bid, that the "Saxon 300" required such modification for two-sided copying capability. Neither did it indicate what, if any, additional costs would be charged for such modifications. (Testimony of Nee, Wallace; R-3.) After DGS tested the "Saxon 300," it sent Saxon a form letter indicating that the copier met minimum operating requirements. The letter did not inform Saxon that the machine lacked two-sided copying capability because DGS did not consider the lack of such capability a major malfunction in the equipment. (Testimony of Nee.) If a machine malfunctions, DGS has -- in the past -- allowed vendors to correct the deficiency or substitute another machine. (Testimony of Nee.) The Group I, Type II, Class I category of copiers, requires two-sided copying capability. Saxon bid its "Saxon 300" as a copier which meets this requirement. (Testimony of Celnik, Nee; P-1.)
Recommendation Based on the foregoing, it is RECOMMENDED: That Saxon's bids in Group I, Type I, Class I; Group I, Type I, Class II; Group I, Type I, Class IV; Group I, Type II, Class I; and Group I, Type II, Class II be disqualified; and That Saxon's bid in Group I, Type II, Class I be disqualified. DONE AND RECOMMENDED this 26th day of February, 1982, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of February, 1982.
The Issue The issue in this proceeding is whether Petitioner, The Middlesex Corporation and Affiliates (Middlesex) or Intevenor, J. B. Coxwell Contracting, Inc. (J. B. Coxwell), submitted the lowest and best responsive bid for State Project No. 55040-3521 let by the Florida Department of Transportation (FDOT).
Findings Of Fact The Florida Department of Transportation issued an invitation to bid (ITB) for a contract to construct road improvements on State Road 363 in Tallahassee, Leon County, Florida; Project No. 55040-3521. The ITB incorporated the plans and specifications for the proposed highway improvements. The specifications stated in pertinent part: Article 1-3. . . . for the purpose of award, after the proposals are opened and read, the correct summation of the products of the approximate quantities shown in the proposal, by the unit prices, will be considered the bid. . . . . Until the actual award of the contract, however, the right will be reserved to reject any or all proposals and to waive technical errors as may be deemed in the best interest of the State. . . . .(emphasis supplied) Article 2-6. A proposal will be subject to being considered irregular and may be rejected if it shows omissions, alterations of form, additions not called for, conditional or unauthorized alternate bids, or irregularities of any kind; also if the unit prices are obviously unbalanced, either in excess of or below the reasonable costs analysis values. In addition to the specifications, a part of the plans for the project required the successful bidder to perform substantial excavation work on the project site. The excavation work would more likely than not yield enough fill material to complete any fill or embankments required in the project. Therefore, the plans contemplated that the soils obtained from the excavation work would be used for the construction of an estimated 44,000 cubic yards of embankment in the project. In order to achieve this goal, page seven of the plans entitled "The Summary of Quantities" indicated that embankment was to be a "no-pay item". However, the bid proposal, the form which constitutes the actual bid of the contractor, contained a line item for a price quotation for embankment/fill, Item No. 120-6. By including such a line item in the bid proposal, bidders were required to submit some figure for this item or risk their bid being declared irregular under the specifications for this project. There was no timely objection filed by any bidder indicating that the bidder would be prejudiced by treatment of the embankment/fill item as a no-pay or as a pay item. Likewise, there was no timely challenge to the apparently conflicting plans and pay item sheet or that the conflicting plans and pay item sheet created a stiutaion which prohibited a bidder from submitting a responsive bid. Seven bids for the contract were submitted and opened on May 27, 1992. The three apparent lowest bids at the opening were: Anderson-Columbia at $4,251,147.89; J. B. Coxwell at $4,964,327.81; and Middlesex at $4,977,371.48. After the bids were opened, each bid was reviewed by FDOT's Technical Review Committee (TRC) to determine whether the bid was mathematically and materially unbalanced, contained all appropriate signatures, contained all appropriate documents and otherwise met the technical requirements of the ITB. In essence, the TRC reviews each bid to determine whether it is responsive to the bid proposal and, if not responsive whether the bid's lack of responsiveness is immaterial and waivable by FDOT. After its review of all the bids, the TRC then makes a recommendation to FDOT's Contract Awards Committee on whether a bid should be rejected for material nonresponsiveness to the ITB. In this case, the TRC recommended to the Contract Awards Committee that Anderson-Columbia's bid be rejected as nonresponsive to the ITB. On June 16, 1992, FDOT's Contract Awards Committee adopted the recommendation of the Technical Review Committee and declared Anderson-Columbia's bid nonresponsive. The awards committee also voted to award the bid to J. B. Coxwell as the second responsive low bidder and on July 6, 1992, FDOT posted a notice of intent to award the contract to J. B. Coxwell. In making the award, FDOT looked at the impact of the conflict between the plans and the bid proposal sheet. FDOT's practice is to add all the unit prices listed on the bid proposal sheet to determine the total amount of the bid. FDOT has never deleted an item from the unit price list to determine the amount of a bid. Following these policies and Consistent with Article 3-1 of the specifications, FDOT determined that a bidder's price quote for the enbankment/fill item would be included as a pay item in the total bid despite the plan's indication that embankment/fill would be a no-pay item and despite the fact that the embankment item probably will not be paid as long as the fill required is less than the excavation. However, at the time of bidding, no bidder could be certain that FDOT would choose to pay or not pay item 120-6. In this case, a review of the bids demonstrates that bidders were not uniform in their application of the conflict between the plans and bid proposal sheet in developing their specific bids. Some bidder's, like J. B. Coxwell, bid very low prices for the embankment/fill in their bid. Some bidder's, like Middlesex, bid prices for the embankment/fill item closer to the average unit price for embankment/fill. In any event, no bidder received any advantage over another bidder due to the conflicting designation of the embankment/fill item and no bidder was favored or discriminated against because of the conflict. In short, all bidders received the same plans and bid proposal, reacted to them in the normal course of their businesses and prepared their bids according to those dictates. The evidence did not demonstrate that the conflict between the plans and bid proposal sheet or FDOT's handling of the conflict was so unfair or confusing that the conflict completely impeded or subverted the purpose or fairness of the competitive bidding process. J. B. Coxwell. Finally, as indicated, the TRC reviews bids to determine whether they are materially unbalanced. In general, unbalanced bids are discouraged by the Department because an unbalanced bid has the potential to allow the contractor to recoup or receive a larger portion of the contract price at the beginning of the contract term thereby making it less disadvantageous for the contractor to walk away from the contract and making agency control over the contractor more difficult. However, not all unbalanced bids will be rejected by FDOT because mathematically unbalanced bids often will have no material impact on the order of the bidders or the interests of the state in the timely and orderly performance of a given road project. Additionally, because of the nature of a given project, there may be a very good reason for a contractor to submit a mathematicallly unbalanced bid. In fact, approximately 80% of all the bids submitted to FDOT contain some form of mathematical unbalancing. Given these facts, FDOT will only reject an unbalanced bid if the unbalancing is material to the project and its award. In evaluating unbalanced bids, FDOT follows the guidance in a May, 1988, memorandum from the Federal Highway Administration (FHWA), which addresses bid analysis and unbalanced bids. The memorandum provides that where unit prices for items bid are either unusually high or low in relation to the engineer's estimate of the price (or mathematically unbalanced), the accuracy of the estimated quantities of the items are to be checked. If the quantities are reasonably accurate, the bid is to be further evaluated to determine whether the mathematical imbalance is "materially unbalanced" such that there is "reasonable doubt that award to the bidder submitting the mathematically unbalanced bid will result in the lowest ultimate cost to the Government." The analysis of a mathematically unbalanced bid to determine if it is materially unbalanced considers the effect of the unbalanced bid on the total contract amount; the increase, if any, in the contract cost when quantities are corrected; whether the low bidder will remain as the low bidder; and whether the unbalanced bid would have a potential detrimental effect upon the competitive process or cause contract administration problems later. In this case, FDOT compared the unit prices (line item prices) by each bidder on the bid proposal sheet to the average unit price for that item. The average unit price is based upon an average of the bidders' unit prices bid for a given pay item and the Department's estimated unit price for that item. If an individual bidder's unit price is significantly greater or less than the average price, FDOT's computer flags the item as mathematically unbalanced. Such a bid then receives further evaluation by FDOT to ensure the accuracy of the original estimates of the quantities of those items for which an unbalanced unit price has been submitted. FDOT also reviews the project plans for accuracy. The more in-depth review is performed to determine if there is a potential for a cost overrun or if there is an error in FDOT's estimated quantities which would result in an increased cost to the State for the project. In this case, J. B. Coxwell and Middlesex submitted bid proposals for each of the individual line item prices contained on FDOT's form. J. B. Coxwell's unit price for the embankment/fill item was $.10 per cubic yard of fill. FDOT's average price for the embankment/fill item was $3.20. The Middlesex quotation for embankment/fill was $2.25 per cubic yard of fill. FDOT's computer analysis of J. B. Coxwell's bid flagged the embankment/fill item as mathematically unbalanced. The quote by Middlesex for the embankment/fill item was not unbalanced and therefore was not flagged for furhter review by FDOT. However, the Middlesex bid was flagged as unbalanced for other line item quotations contained in its bid proposal. FDOT then made a more in-depth review of the bid of J. B. Coxwell and determined that although the bid was mathematically unbalanced, it was not materially unbalanced and did not result in a change in the bidding order. This determination was primarily based on the fact that the excavation portion of the project would yield enough fill to perform the embankment portion of the contract. Thus, a lower than average price in that item was not detrimental to the state, but, in fact, was in its best interest since a quote closer to FDOT's average would cause the state to be double billed for the fill FDOT's site would supply. There is no question that this was a reasonable analysis of the project in this case. Similarly, FDOT, utilizing the same analysis for unbalanced bids, also determined that the mathematically unbalanced unit prices submitted in the Middlesex bid were not materially unbalanced. Given the fact that Middlesex also had a mathematically unbalanced bid, which received the same analysis, Petitioner's argument that Coxwell's mathematically unbalanced bid should be rejected for such imbalance is rejected. Therefore, Middlesex has failed to demonstrate that it submitted the best responsive bid for State Project No. 55040-3521 and its protest should be dismissed.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered awarding the bid to J. B. Coxwell and dismissing Petitioner's protest. DONE AND ENTERED this 8th day of December, 1992, in Tallahassee, Leon County, Florida. DIANNE CLEAVINGER 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 thes 8th day of December, 1992
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made. On October 11, 1991, DOT's District Four office let out for bid district contracts E4551 and E4554. Contract E4551 calls for the mechanical sweeping of Interstate 95 in Broward County. Contract E4554 calls for the mechanical sweeping of Interstate 95 in Palm Beach County. At a mandatory pre-bid conference, the bidders for the Contracts were provided with a packet which included a Notice to Contractors and Standard Specifications. The Notice to Contractors is a four page document which is specific to each contract. The Standard Specifications are the same for all district contracts. Both the Notice to Contractors and the Standard Specifications to the bidders required bidders to submit proof of the ability to acquire a performance and payment bond in an amount equal to the contract bid price. Bidders could satisfy this requirement by submitting a bid guarantee of 5% of the bid, submitting a notarized letter of intent from a bonding company or by providing a Certificate of Qualification issued by Respondent. The Notice to Contractors for both Contracts provided as follows: Failure to provide the following with each bid proposal will result in rejection of the contractor's bid.... District contracts of $150,000 or less require the following as proof of ability to acquire a performance and payment bond: A notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a performance and payment bond in the amount of your bid, should your firm be awarded the project; in lieu of a notarized letter the following may be substituted: (1) a bid guarantee of five percent (5%); or (2) a copy of the Contractor's Certificate of Qualification issued by the Department. (No emphasis added) Similarly, the first Standard Specification provides: 1.1 Bidders (contractors) A contractor shall be eligible to bid on this contract if:... (2) Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the District Contract Administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of your bid, should your firm be awarded the project.... The requirement to submit proof of the ability to acquire a performance and payment bond has been imposed on the Districts by DOT Directive 375-00-001-a (hereinafter the "Directive".) This Directive was in place at all times material to this proceeding. Section 3.2.2 of the Directive provides: A contractor shall be eligible to bid if: ...Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the minicontract administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of the bid, should the firm be awarded the project. A bid guaranty as specified above may substitute as proof of ability to obtain a performance and payment bond. This applies to bids amount over or under $150,000. A copy of the Contractor's Certificate of Qualification issued by the Department may be substituted in lieu of a notarized letter for those contracts not requiring a bid bond. The bids for the Contracts were opened on October 11, 1991 in Fort Lauderdale, Florida. Bids were received from four bidders: CPM, SCA, Florida Sweeping, Inc. and P. F. Gomez Construction Co., Inc. In its bid proposals, SCA included executed bid bonds in an amount sufficient to cover the amount of each bid proposal. Each bid bond cost $55.00. CPM did not submit executed bid bonds with its proposals. Instead, CPM submitted letters from Mark A. Latini dated September 25, 1991. Those letters were provided on the stationery of Bonina-McCutchen-Bradshaw, Insurance and indicate that Mr. Latini is the "bond manager." The letters provide as follows: Amwest Surety Insurance Company is the surety for the above-referenced contractor and stands ready to provide the necessary performance and payment bond for the referenced bid should Certified Property Maintenance, Inc., be low and awarded the referenced contract. All bonds are subject to normal underwriting requirements at the time of the bond request.... The letters submitted by CPM with its bid proposals were not notarized and were not binding obligations to issue bonds since they were conditioned upon meeting certain unspecified underwriting requirements at the time of the bond requests. The submitted bids were reviewed by the District Four Contractual Services Office. The bids submitted by CPM were the lowest for each contract. Its bid for Contract No. E4551 was $109,343.97. Its bid for Contract No. E4554 was $30,312.63. SCA's bids for the Contracts were $139,442.14 and $44,100.00, respectively. During the initial review of the bid proposals, the Contractual Services Office rejected CPM's bids for failure to have its bonding company "letters of intent" notarized. In addition, the bid proposals submitted by Florida Sweeping, Inc. were rejected for failure to note a required addendum and the bids submitted by P. F. Gomez Construction Co., Inc. were rejected because the "proposal bond was not of proper character". On October 18, 1991, DOT posted its Notice of Intent to Award the Contracts to SCA, the only bidder for the Contracts whose proposals had not been rejected. CPM timely filed protests of the proposed awards to SCA on October 22, 1991. The protests filed by CPM argued that its bids should not have been invalidated simply because the bonding company's letters did not include notary seals. At this point, the sole basis for the disqualification of CPM's bids was the failure to have the bonding company letters notarized. Respondent contends that, except for the absence of the notary seal, the letters submitted by CPM met the requirements of the Notice to Contractor and the Standard Specifications cited above. However, those letters are equivocal and do not evidence a binding commitment to issue a bond upon award of the contract. The DOT officials admit that they do not know what "normal underwriting requirements" would or could be required by CPM's bonding company. This conditional language makes it uncertain whether CPM could obtain the necessary bond. Therefore, it is concluded that those letters do not meet the requirements of the Notice to Contractors, the Standard Specifications or the Directive. A hearing on CPM's protest was not held. CPM's president, Raymond Hanousek, who prepared CPM's bid and attended the pre-bid meeting, called DOT's District office the day the bids were opened and was informed that his company's bid was low, but was rejected because its bond commitment letter was not notarized. Mr. Hanousek spoke with Joseph Yesbeck, the District's Director of Planning and Programs. After their conversation, Mr. Yesbeck reviewed the file and met with Teresa Martin, the District's contract administrator for construction and maintenance contracts, and other members of the contracting staff. Ms. Martin explained why CPM's bid had been disqualified, and the matter was thereafter discussed with the District and Department attorneys. After reviewing the situation, Mr. Yesbeck determined that the failure to submit notarized letters should be considered a non-material deviation and the bids submitted by CPM should be accepted and considered the low responsive bids. Mr. Yesbeck concluded that the absence of the notary seal did not give any competitive advantage to CPM and that defects of this nature are routinely allowed to be cured. Therefore, he reversed the contract administrator's decision to disqualify CPM on both Contracts. The District secretary concurred in the decision reached by Mr. Yesbeck to repost the award of the Contracts. Mr. Yesbeck prepared a joint letter of reposting which removed CPM's disqualification and declared CPM to be the low bidder for both Contracts. At the time Mr. Yesbeck made his decision, he had not reviewed the Directive from the Assistant Secretary's office stating that there must be a notarized letter showing proof of ability to obtain a performance and payment bond. Mr. Yesbeck did not review the Directive until his deposition was taken one week prior to the hearing in this case. According to Ms. Martin, the option to provide a notarized letter from a bonding company as an alternative to the posting of a 5% bid guarantee or obtaining prequalification was designed to promote participation in state contracting by small business and minority business enterprise applicants. While DOT was apparently trying to make it easier and cheaper for companies to bid by not requiring a bond to be posted, the DOT Directive and the bid documents still clearly required unconditional proof that a bid bond would be issued if the contract was awarded to the bidder. CPM was not prequalified nor did it post a bond. Thus, in order to meet the requirements of the Notice to Contractors and the Standard Specifications, CPM's only option was to submit a notarized letter showing proof of ability to obtain a performance and payment bond. DOT was never provided with any proof that CPM had been prequalified by the bonding company for a bond and/or that a bond would unconditionally be issued if CPM was awarded the Contracts. Because the letters stated they were "subject to normal underwriting requirements at the time of the bond request", there was some possibility CPM would not be able to obtain a bond. Such a condition was not permissible under the bid doucments. The decision to accept CPM's bid was contrary to the DOT Directive, the Notice to Contractors and the bid specifications which require that a bidder demonstrate proof of ability to obtain a performance and payment bond. Consequently, it is concluded that DOT's decision to accept the conditional, unnotarized letters submitted by CPM was arbitrary and capricious. There is some indication that other DOT Districts have, on occasion, waived the notarization requirement for the bond letter. However, it is not clear whether the language in the bid documents was the same or similar in those cases and/or whether the bond letters were conditional. In the past, whenever District Four has gotten a bid without a notarized bond letter, the bid was rejected. Apparently, there has never been a protest based on such a denial in District Four. Under Section 337.18, DOT does not need to require notarized, unconditional bond letters on contracts under $150,000. Indeed, there was a suggestion that some DOT Districts have dropped the requirement for certain contracts under $150,000. However, the bid documents in this case clearly required some proof that the bidder could acquire a performance and payment bond upon award of the Contracts. It was incumbent for all bidders to meet this requirement. It was arbitrary to delete this requirement after the bids were submitted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding the bids submitted by CPM to be non-responsive and rejecting those bids. Petitioner should enter into negotiations with SCA regarding the award of the contract. In the absence of a favorable negotiation, Petitioner should enter a Final Order rejecting all bids and opening the Contracts up for new bids. DONE and ENTERED this 24th day of March, 1992, at Tallahassee, Florida. J. STEPHEN MENTON 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 24th day of March, 1992.
Findings Of Fact On March 1, 1984, Respondent gave notice to qualified contractors that it would receive sealed bids for State Project No. 72000-3541, referred to as Federal-Aid Project No. M 9041(10). This project involves the installation of a computerized traffic control system for the City of Jacksonville. In response to the opportunity to bid, the Department of Transportation received four bids. Petitioner, Winko-Matic Signal Company, was among the bidders. The other bidders were Georgia Electric Company, Traffic Control Devices, Inc., and Sperry Systems Management. The bids of Traffic Control Devices and Sperry Systems were rejected based upon an error in bid tabulations on the part of Traffic Control, a mistake on the quantities page, with the Sperry rejection being based upon a bid bond problem. Traffic Control had been the apparent low bidder with a bid of $1,964,115. Winko-Matic was the second apparent low bidder with a bid of $2,279,604.70. The Department of Transportation had estimated that the total cost of the Jacksonville project would be $ 2,024,680.61. Having discarded the bid of Traffic Control Devices, the Department of Transportation telegrammed Winko-Matic on April 4, 1984, advising Winko-Matic that it was the apparent low bidder for the Jacksonville project. Subsequently, the awards committee of the Department of Transportation met on April 18, 1984, and determined to reject all bids and re-advertise the job. In the course of this meeting the awards committee was told that there were erratic bids received on contract items, pointing to some perceived confusion among the contractors as to requirements of the contract. Discussion was also held on the possibility of establishing a pre-bid conference if the project was re advertised. The awards committee then voted to reject the bids on the basis that the apparent low bidder, Winko-Matic, had submitted a bid which-was 12.6 percent over the Department's estimate, instead of being within 7 percent of the Department of Transportation's pre-bid estimate, a point above which the Department of Transportation in its non-rule policy would call to question to the acceptability of the apparent low bid. In addition to deciding to reject all bids and re-advertise, it was determined that a pre-bid conference should be scheduled at least 30 days prior to the bid-letting date. Winko-Matic was advised that the Department of Transportation's decision to reject all bids by correspondence of May 4, 1984, in which it was indicated that all bids had been rejected based upon the fact that they were too high. In response to this notice of rejection, Winko-Matic, effective May 17, 1984, filed a written notice of protest. The case was subsequently referred to the Division of Administrative Hearings on June 20, 1984, and a final hearing date was established by Notice of Hearing of July 5, 1984. The hearing date in this cause was September 12, 1984. The Jacksonville project in question requires the utilization of what has been referred to "UTCS Enhanced" software. This software package is unique and has only been used in a limited number of locations within the country. Those locations are Los Angeles, California; San Diego, California; Broward County, Florida; and Birmingham, Alabama. Another unique feature within the project design is the use of an associated coaxial computer sys gem. Given the unique nature of this project and the fact that the Department of Transportation had never advertised for bids related to UTCS software, Department of Transportation obtained assistance from a consulting firm, Harland, Bartholomew & Associates. In fulfilling its function Harland gave estimates to include an estimate related to the projected cost of the software, Item 681-102. The Harland estimate for the overall project was $2,143,130 including a $100,000 estimate for the software system. That estimate relating to the software was subsequently adjusted by the Department of Transportation to depict a cost of $13,780. The Department of Transportation estimate was based upon information within its computer related to a system unlike the enhanced software contemplated by the plans and specifications. In other words, the stored information in the Department of Transportation computer was not the same as contemplated by the plans and specifications in the Jacksonville project. Moreover, the initial estimate of Harland was based upon the idea of an extended software system, as opposed to an enhanced software system. Winko-Matic had bid $389,500 for the software in Item 681-102. That estimate was premised upon figures obtained from JHK and Associates, the group which Winko-Matic intended to use as its subcontractor for the enhanced software portion of the project. JHK developed the software and was responsible for systems integration of the Los Angeles, California, project, one of the locations in which UTCS enhanced software has been utilized. JHK premised its estimate for the software hare upon experience in Los Angeles and an evaluation of the tasks to be performed related to the enhanced software. This included general software development activities, hardware innovation, installation costs during the period of acceptance and testing, and the preparation of data base. The JHK bid price was $339,500. Another $50,000 was added to that price related to what the Petitioner describes as its management costs for that item. By June 20, 1984, when a further meeting was held by the awards committee on the subject of the Jacksonville project, it was concluded that the estimate made by the Department of Transportation of $13,780 was not correct, on the topic of the enhanced software. A more reasonable estimate, according to the information imparted in this session, would be $200,000 for enhanced software as called for in this project, with a $100,000 amount being a reasonable estimate had they chosen to use extended software. Adjusting the initial price related to the UTCS enhanced software to reflect a corrected estimate of the Department of Transportation in its original advertised bid, that estimate becomes $2,210,900.61 and its consultant Harland's estimate becomes $2,243,130. With this adjustment, the differential in the estimate made by the Department of Transportation and the Petitioner approaches 3 percent and not the 12.6 percent originally found. The 3 percent is below the threshold of 7 percent used as the policy for determining whether a bid might be rejected as being far beyond the acceptable limits set forth in the Department of Transportation's estimate. In the aforementioned June 20, 1984, awards committee meeting, the Department of Transportation continued to hold the opinion that all bids in the Jacksonville project should be rejected and the matter re-advertised. Although the problem pertaining to the estimate of the cost of the enhanced software package had been addressed, the committee continued to feel that the prices received in the bid letting were erratic Reference was also made to revisions or modifications to the project plan which would be offered if the matter were re- advertised. It was also pointed out that the Federal Highway Administration would concur in the Department's decision to reject all bids and would accept modifications. The awards committee again voted to reject the bids. The matter was again considered by the awards committee on August 31, 1984. On that occasion, it was pointed out that the revisions contemplated by the Department of Transportation, should the matter be re-advertised, would not affect in a substantial way the cost estimate for the project with the exception of Item 680-101, the system control equipment (CPU), which would promote a lower price for the project. The committee determined in the August, 1984, meeting to reject all bids and re-advertise. While the initial notice of rejection of May 4, 1984, had suggested the basis for rejection as being the fact that Petitioner's bid far exceeded the 7 percent allowance for price above the Department of Transportation's estimate of costs, the meetings of the awards committee and the suggestion of the Respondent in the course of the final hearing in this case indicated that there were other reasons for the decision to reject. Those Were: (a) an apparent lack of clarity among bidders regarding specifications for the Jacksonville job, (b) the desire of the Respondent to revise specifications on the Jacksonville project; and (c) a lack of sufficient competition in the bids. In connection with the first of the additional reasons Respondent suggests that variations within the bid responses related to particular line items within the specifications point out a lack of clarity in the project's specifications or confusion by bidders related to those specifications. Respondent did not bring forth any of the bidders who might speak to the matter of possible confusion or misunderstanding concerning some of the bid items. By contrast, the Petitioner's president; the president of JHK & Associates and James Robinson, Harland's project manager for the Jacksonville job, did not find the specifications in the original documents to be confusing. In addition, the testimony of those individuals established the fact that bid variations related to particular line items are not extraordinary and do not establish any apparent confusion by the bidders as to the requirements of those line items. In effect, what the differentials demonstrate are variations related to the manufacture or in-house capabilities of the bidders and an effort to allocate discretionary costs in various places as to line items. Moreover, they might indicate last- minute adjustments in the bid quote prior to the opening and a possible effort by a contractor to enter into a new job market. Finally, they demonstrate offsetting which is the allocation of item prices by a contractor to maximize profits. To do this, a contractor submits high bids on items representing quantities which the contractor feels will increase after the contract is awarded and submits low bids on items representing quantities which are not likely to change. In summary, while the Department of Transportation in its presentation expressed some concern about the variations in the pricing in the bid quotations offered by the respective bidders in this project, its suspicions on the question of the possible clarity of its specifications were not confirmed and are not convincing. On the topic of revisions which the Department of Transportation would offer if the matter were re-advertised, with one exception those matters appear to be items that could be attended through change orders or supplemental agreements. They are not matters which necessarily must be addressed through a rejection of all bids and a re-advertising of the project. The lone exception to this is the possibility that the Department of Transportation may not be able to protect its proprietary rights in the enhanced software which is being developed for the project, under the terms of the present bid documents. Given that uncertainty, the Respondent would wish to re-advertise the project and make certain that its proprietary interests are protected. Finally, Respondent has alluded to the fact that the Jacksonville project should be re-advertised in view of the lack of competition in the initial letting. Only four bidders expressed an interest in this project at the time of the first letting. Of those, two bidders were found to be responsive. While this is a low number of bidders, there does not appear to be any agency practice on the part of' the Department of Transportation to the effect that this number of bidders would not be accepted. Moreover, no indication has been given that should the matter be re-advertised a greater number of bidders would express an interest than was the case in the first letting. Consequently, this reason for bid rejection is not acceptable. If Respondent did not reject the bids and re-advertise the project, Winko-Matic would be the successful bidder in the Jacksonville project.
The Issue Whether Respondent was justified in cancelling the award of bid of HRS Lease No. 590:2054 to Petitioner, BOOZER, on the basis that it was nonresponsive. Whether Respondent acted fraudulently, arbitrarily, illegally or dishonestly in issuing an award of HRS Lease No. 590:2054 to Intervenor rather than to Petitioners or some other bidder.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: HRS caused an invitation to bid to be advertised regarding Lease No. 590:2054 on January 3, 1989 and January 10, 1989. The Invitation to Bid required that all bids be received on or before 2:30 p.m. February 1, 1989, for 9,168 net rentable square feet, plus or minus 3%, of existing office space. A pre- bid meeting was scheduled for January 11, 1989. The advertisement also advise that the bid specifications could be obtained from the Orlando Regional Office of HRS, and that the State of Florida reserved the right to reject any and all bids. The material provisions of the bid specifications at issue in this proceeding are: The space be made available on September 1, 1989 or within 175 days after bid is finalized. The proposed space must be in an "existing building", which was: defined to mean "dry and capable of being physically measured to determine net rentable square footage at the time of bid submittal". The bidder provide 2 clear photographs of the exterior front of the proposed facility and 2 scaled (1/8 inch or 1/4 inch 1 foot preferred) floor plan showing present configurations with measurements that equate to the net rentable square footage (HRS Exh. 1, General Specifications Requirement No. 10(a)) Emphasis in original). Building(s) in not more than 2 locations provided the facilities are immediately adjacent to or within 100 yards of each other. Prior to the pre-bid conference, but after the initial publication of the bid invitation, representatives of NOTTUS contacted Ernie Wilson, the facilities services manager for District 7, HRS, to inquire regarding the propriety of submitting a bid for space in two buildings in which HRS presently had facilities, together with a facility that was greater than 100 yards from the existing facilities. At the time of the inquiry, NOTTUS was leasing facilities to HRS at its Lipscomb facility in Palm Bay, Florida. A portion of the square footage that NOTTUS inquired about leasing to HRS was the remaining square footage in two buildings that HRS partially occupied at that time. All of the premises submitted by NOTTUS under its bid package were located in the Woodlake PUD, which is all under single ownership. A representative from HRS advised the representative from NOTTUS that: the issue regarding the proximity of the locations would not be addressed as a bid specification, but rather, that would be a matter to be weighed by the evaluation committee in analyzing the bids. the bid proposal to be submitted would actually be for two locations as a portion of the space offered by NOTTUS was to be located in buildings in which HRS presently maintained facilities. The submittal of the bid package regarding the premises subject to occupancy by HRS, as ultimately submitted by NOTTUS, would definitely not disqualify the bid submittal. Mr. Wilson also received telephone calls from BOOZER and a third bidder making inquires regarding the bid package. The Pre-bid conference was held on January 11, 1989. No objections or questions regarding the bid specifications as to be utilization or definition of the terms "existing building" and "present configuration" were raised at that time. At no time prior to the submission of the bids were any objections or questions raised by BOOZER regarding the utilization of the term "existing building" or the term "present configuration" as those terms were defined within the bid specification. Each of the Petitioners in this action, the Intervenor, as well as two other parties, submitted bids to HRS within the time requirement set forth in the bid documents. The bids were opened at the time and place reflected in the aid documents and Invitation to Bid. Subsequent to the opening of the bids, John Stewart, who is Ernie Wilson's supervisor, and Ernie Wilson reviewed the bid packages submitted for Lease No. 590:2054 and made a determination as to which bids were responsive. As a result of that evaluation, a determination was made that all five bidders were responsive. These bidders were the Petitioner, Fred D. BOOZER, the Intervenor, Nottus, Inc. the Petitioner, Trust NB-1 Micah G. Savell and Professional Center V. Inc. These bid proposals were then submitted to the evaluation committee who viewed the property of each of the bidders on February 13, 1989. The bid documents of BOOZER contained an additional document, i.e., a site plan, which reflected that the premises subject to his bid proposal were an "existing building". The area submitted for the bid was shaded reflecting the entire square footage submitted for bid as being "in existence." The drawing further reflected the "existing building" as being the "proposed HRS building". The premises subject to the Petitioner's, BOOZER, bid were not in existence, as that term was defined in the bid specifications, in that approximately 2500 square feet had not yet been constructed. Two walls, a floor slab and a roof were not in existence. The only improvements located therein were palm trees, grass and a sidewalk. Petitioner stipulated that the area occupied by the palm trees, grass and sidewalk was in fact "not dry". The existing building at 2225 South Babcock Street that was dry at the time of the bid opening constituted approximately 6,900 square feet of premises subject to Petitioner's bid. At the time of the inspection, the Petitioner, BOOZER, was present. At no time did BOOZER indicate that the total facility bid was not in existence. The members of the evaluating committee who viewed the property for purposes of evaluating the bid were not aware of the fact that the entire premises subject to BOOZER's bid proposal was not in "Existence" and "dry". The floor plan showing the present configuration of BOOZER's facility reflected an open floor space for the area occupied by the palm trees, grass and sidewalk. The palm trees, grass and sidewalk were not reflected in the present configuration drawing. Both the floor plan and site plan were prepared by BOOZER's son with his approval. In evaluating the respective bid proposals, the evaluation committee rated the properties as follows: Fred D. BOOZER - 450 points Nottus, Inc.- 433 points Micah Savell - 384 points Trust NB-l - 360 points Professional Center V. Inc.- 357 points The location requirement found in Article D.3(b) of the bid package was taken into account. In evaluating the Nottus bid, including a zero rating from one of the evaluation committee members. As a result of the points awarded by the evaluation committee, a determination was made to award the bid to BOOZER, who was notified of this award on or about March 14, 1989 by letter dated March 14, 1989. On or about March 20, 1989, Petitioner, BOOZER, obtained a construction permit from the City of Melbourne to construct a fire wall and framing for additional shell building. This building permit was for the purpose of enclosing the area that was occupied by the palm trees, grass and sidewalk at the time of the bid proposal being submitted. Upon being awarded the bid, Petitioner, BOOZER then made a decision to commence construction to complete the premises subject to his bid proposal, and had expended $28,000 thereon through the hearing date. On or about March 29, 1989, HRS, through Ernie Wilson and Lynn Nobley, discovered the fact that approximately 2,500 square feet represented as being a part of the existing building, in fact was not existing pursuant to the bid specifications. At the time of this discovery, construction under the construction permit had not been completed. Mr. Wilson advised BOOZER at that time that he was concerned that BOOZER's bid was nonresponsive because the premises subject to the bid proposal were not in an "existing" building at the time of the bid submittal. The normal procedure for HRS in awarding a bid where the initial award is cancelled or thrown out is to award the bid to the second and next best lowest bidder. It is not the normal practice of the HRS evaluation committee to measure the applicable properties at time of evaluation to determine net rentable square footage. At the time of discovery of the foregoing status of BOOZER's building, Ernie Wilson, contacted a Nottus representative, Fred E Sutton, its President, to advise him of the possible nonresponsiveness of BOOZER's bid and requested information to determine whether Nottus, the second low bidder, still had facilities available pursuant to its bid documents and whether Nottus would agree to continue to continue to be bound by the terms thereof. Mr. Sutton advised Ernie Wilson that the facilities were still available and that Nottus would agree to abide by the terms of its bid proposal. Following the procedural steps necessary to advise the appropriate individuals within HRS of the possible nonresponsive bid by BOOZER, Ernie Wilson was advised by the Director of HRS General Services, King W. Davis, by letter dated April 2, 1989 to withdraw the award for the proposed lease 590:2054 from BOOZER because of approximately 2,500 feet of nonexisting space. He was also instructed to award same to Nottus as the second lowest bidder. On or about April 14, 1989, Ernie Wilson advised BOOZER of the Notice of Withdrawal of the award from BOOZER and award to Nottus, together with the reasons therefor, which was received by BOOZER on April 17, 1989. Petitioner, BOOZER, timely initiated these actions by filing his Notice of Intent to appeal the withdrawal of the award of bid to him and the award to Nottus, and by timely filing a formal written protest and request for formal hearing. Attachment "D" of the bid package required the submittal of a proposed plan to a division of the State Fire Marshal for review of any proposed construction or renovation to determine whether such construction or renovation complied with the uniform fire safety standards. Said plans were required to be prepared by licensed architects and engineers for certifications outlined in Attachment "D". These matters were all to be completed prior to the commencement of any revocation or alteration. Petitioner, BOOZER, commenced said improvements prior to said approval. In fact, BOOZER submitted no plans in compliance with these requirements prior to construction. Petitioner, BOOZER, is a licensed builder in the State of Florida, and has been for ten years. BOOZER further acknowledged that at the time of signing and submitting the bid proposal, he certified that he understood the terms of the bid specifications and agreed to be bound by them. TRUST NB-1 attempted to initiate an appeal of the award of the bid to Nottus by submitting a facsimile "notice of protest" to HRS predicated on the award of the bid to Nottus occurring greater than sixty (60) days following the bid opening date. TRUST NB-1 received notice of the award to Nottus on April 18, 1989 and attempted facsimile delivery on April 21, 1989. The facsimile "Written Notice of Protest" was not filed until April 25, 1989. The regular mail receipt of said Notice was received by HRS and filed on April 24, 1989. 38. The "formal written protest" was filed with HRS on May 1, 1989. 39. signature The facsimile Notice of Intent to Protest did not contain of a representative of TRUST NB-1. the original 40. Ernie Wilson is the custodian of records for bid protests for HRS, District 7, and is also the person designated in the bid documents as the contact person for the bid on Lease No. 590:2054. TRUST NB-1 was ranked number four in relation to the five bids submitted. Bidder Micah Savell, not a party to these proceedings, is the next low bidder after BOOZER and Nottus, Inc.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent enter a final order: (a) Finding the bid of Petitioner, BOOZER, to be unresponsive and that the cancellation of the award by Respondent was justified. Find the bid of Intervenor, NOTTUS to be unresponsive. Find that Petitioner, TRUST NB-1, lacks standing and its protest should be dismissed. Reject all bids. DONE AND ENTERED this 21st day of July, 1989, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE 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 July, 1989. APPENDIX Proposed Findings of Fact by Petitioner, Fred O. Boozer: 1-5 Rejected. 6 and 7 Accepted as incorporated in the Recommended Order. Proposed Findings of Fact by Intervenor, Nottus, Inc. Accepted. Accepted as modified. 3-30. Accepted. 31. The first two sentences rejected as argument and not supported by the evidence. Last sentence in paragraph accepted. 32-40. Accepted. COPIES FURNISHED: Thomas Houck, Esquire 312 South Harbor City Boulevard Suite 1 Melbourne, Florida James A. Sawyer, Esquire District 7 Legal Counsel Department of Health and Rehabilitative Services 400 West Robinson Street Suite 911 Orlando, Florida Sam Power Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Gregory L. Coler Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John Miller General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
The Issue The issue for consideration herein is whether the Respondent's proposed award on BID No. HSMV - 90022010 to Dunn Construction Company, Inc., should be upheld.
Findings Of Fact At all times pertinent to the issues herein, the Department was the state agency responsible for the solicitation of bids for and award of contracts for the construction of state buildings in Florida. Both Greenhut and Dunn are qualified contractors who are certified to bid on state construction contracts in general and this procurement in particular. In December, 1991, the Department issued an advertisement for bids for the project in issue herein, the construction of the Kirkman Complex Addition Data Center in Tallahassee, Florida. According to the Advertisement for Bids, all bids "must be submitted in full accordance with the requirements of the Drawings, Specifications, Bidding Conditions and Contractual Conditions, which may be examined and obtained ..." from the Department's designated architect/engineer, Clemons, Rutherford and Associates, Inc. in Tallahassee. Section B-21 of the request for proposals (invitation to bid) reads, in pertinent part: The recommendation for contract award will be for the bidder qualified in accordance with Section B-2 and submitting the lowest bid provided his bid is responsible 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. Bids received on this project were originally scheduled to be opened and read aloud on January 15, 1992 with the tabulation and Bid Award Recommendation to be posted the following days at the location where the bids were opened. The proposal as originally issued called for the submittal of a Base Bid with four Alternates, 1a, 1b, 2, and 3. Alternate 1a was a deduct for merely extending the existing Johnson Controls System to incorporate the new work instead of providing a totally new and independent control system. Alternate 1b called for adding furniture and landscaping for certain of the rooms shown on the drawings; Alternate 2 called for adding a "shelled" fourth floor as described in the proposal; and Alternate 3, as originally issued, called for: Add a complete fourth floor as indicated in drawings including the finished interior partitions with full HVAC, Plumbing and Electrical Service. Include furniture and landscaping for rooms 414 and 419. (Includes items in Alternate No. 2) As a result of questions received from prospective bidders at the pre-bid conference which indicated some confusion as to the meaning and intent of the Department regarding Alternate No. 3, by letter to all prospective bidders, dated January 8, 1992 the Department's architect indicated: Alternate #3 shall be the fourth floor complete, as shown on drawings, which includes items in Alternate #2. Addendum #1 to the request for bids, dated January 10, 1992, clarified Item 1-3.6), PROPOSAL FORM, of the PROJECT MANUAL to ADD to "Alternate #3", "(Include items in Alternate #2)". Item #2-1 of Addendum #2, dated January 16, 1992, deleted the sentence changed by Item #1- 3.6, and revised the sentence to read as follows: This includes any items required in addition to Alternate #2 to complete the remainder of the work for the Fourth Floor. Information contained at the beginning of each Addendum calls the bidders' attention to the change and indicates that failure to incorporate it may result in disqualification. The due date for bids was extended at the instance of the Department. Both Petitioner and Intervenor submitted bids for this project as did several other concerns on January 23, 1992. Greenhut's base bid was $4,139,000 with a deduct of $63,600 for Alternate 1a, and additions for Alternates 1b, 2, and 3 of $69,500, $239,000, and $209,000 respectively. Greenhut's total bid, therefore, through Alternate 3, was $4,592,900. Dunn's base bid was $4,079,000 with a zero deduct for Alternate 1a, and additions for Alternates 1b through 3 of $67,000, and $428,000. Dunn's total bid, therefore, was $4,574,000 for a difference of $18,900. Greenhut's bid was submitted on a form which provided for the base bid, the deduct for 1a, and the additions for 1b. 2 and 3 with the figure for 3 being those costs in addition to those identified in Dunn's bid was submitted on a prior form which provided for a base bid, a 1a deduction if any, (there was none), and additions for 1b, 2, and 3 with the figure for 3 including the figure listed for 2. An initial review of Dunn's bid form, then, showed a base bid of $4,079,000, no 1a deduction, a 1b addition of $67,000, a 2 addition of $311,000, and a 3 addition of $428,000. This letter figure included the $311,000 figure for Alternate 2, which should have been deducted from the bid during tabulation. When the bids were opened on January 23, 1992 by Mr. Everline, each figure on each bid was read off and listed on the bid tabulation form in the appropriate area. No attention was given at that time to the appropriateness or correctness of the figures listed on each bid form, nor was any attention paid to any other technical requirement of the procurement. This was merely a transfer of figures from the bid form to the tabulation form, and when this was done, Mr. Everline announced to all in attendance, including many contractor representatives, that the "apparent low bidder" was Greenhut. In arriving at that conclusion, Mr. Everline added all of Dunn's figures together without deducting the $311,000 listed for Alternate 2, a figure which was included in the $428,000 figure listed for Alternate 3. This resulted in an incorrectly large total bid for Dunn. Sometime later that day, a representative of Dunn contacted Mr. Everline to indicate that Dunn had inadvertently bid on the wrong form which precipitated its misleading presentation. Mr. Everline properly declined to discuss the matter and referred the Dunn representative to the Department's legal counsel. Sometime thereafter, when the bids had been tabulated and reviewed for responsiveness and legal qualification of bidders, Mr. Everline suggested to representatives of DHSMV that in order to forestall a protest, only so much of the project as extended through Alternate 2 be awarded. DHSMV officials, however, had sufficient funds available for the entire project, including some additional funds, if necessary, for cabling, and insisted they wanted the entire project awarded. The Department's legal counsel, upon review of the situation, concluded that the Dunn's actual bid intent was clear to include the amount listed for Alternate 2 within that listed for Alternate 3, and not to consider the two as additives to each other. It further concluded that Dunn's use of the improper form on which to submit its bid was immaterial and afforded it no improper competitive edge over other bidders. Therefore, it was concluded that Dunn was the low responsive bidder and, on February 4, 1992, the Department issued a Notice of Award to Dunn. Thereafter, Greenhut filed its Petition For Hearing taken as a protest to the award. Both the Department and Dunn agreed that Greenhut had standing to protest the award and that the protest was timely filed. It is so found.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the Department of General Services enter a Final Order in this case dismissing the protest of Greenhut Construction Company, Inc., in regard to the proposed award of contact in bid number HSMV - 90022010 to Dunn Construction Company, Inc. RECOMMENDED in Tallahassee, Florida this 21st day of April, 1992. 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 21st day of April, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-1297 BID 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: 1. - 6. Accepted and incorporated herein. 7. - 9. Accepted. Accepted. & 12. Accepted and incorporated herein. Accepted. Accepted. & 16. Accepted and incorporated herein. Accepted and incorporated herein. & 19. Accepted and incorporated herein. Accepted. & 22. Accepted and incorporated herein. Argument and not Finding of Fact except for 1st sentence which is accepted. & 25. Accepted and incorporated herein. FOR THE RESPONDENT: 1. - 3. Accepted. 4. - 6. Accepted and incorporated herein. 7. & 8. Accepted. 9. - 12. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. Accepted and incorporated herein. & 17. Accepted and incorporated herein. Irrelevant but accepted as true. Accepted. Accepted and incorporated herein. Accepted. Accepted. Irrelevant but accepted as true. Accepted. Accepted and incorporated herein. Irrelevant. Accepted and incorporated herein. Accepted. FOR THE INTERVENOR: Accepted. - 5. Accepted and incorporated herein. Accepted and incorporated herein. & 8. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. - 15. Accepted. 16. - 19. Accepted. 20. & 21. Accepted. Accepted and incorporated herein. & 24. Accepted. COPIES FURNISHED: Robert A. Emmanuel, Esquire 30 South Spring Street Post Office Drawer 1271 Pensacola, Florida 32596 Sylvan Strickland, Esquire Suite 309, Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 Harry R. Detwiler, Jr., Esquire 315 S. Calhoun Street, Suite 600 Tallahassee, Florida 32301 Ronald W. Thomas Executive Director Department of General Services Suite 307, Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 Susan Kirkland General Counsel Department of General Services Suite 309, knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact Upon consideration of the oral and documentary evidence addressed at the hearing, the following relevant findings of fact are made: The request for sealed bids for the construction of the Project was advertised on October 9, 16 and 23, 1991. There were six addenda to the original bid documents which added, deleted or modified provisions of the original bidding requirements, contract requirements, administrative requirements and technical specifications. The original bid documents plus the six addenda will be referred to herein as the "bid documents". The bid documents required that all bids be in full accord with the contract documents. Sealed bids for the Project were opened on October 30, 1991. Wright submitted the lowest lump sum bid for the Project, with Sovran submitting the second lowest lump sum bid and Kellogg submitting the third lowest lump sum bid. At the time of the bid opening, the bid documents listed only four casework manufacturers that were approved to furnish casework for the Project. Empire Custom Cabinets, Inc. (Empire) was not listed as one of the four approved casework manufacturers in the bid documents. The bid documents did not require the bidder to list the casework manufacturer it intended to obtain the casework from, but only that the bidder name the casework subcontractor. The only work item in the bid documents which requires identifying the name of the manufacturer on the subcontractor's list is the metal roof system. Because Empire's bid on the casework was extremely low compared to other bids received by Wright on the casework, Wright called Empire prior to submitting its bid to confirm that Empire's bid was submitted per plans and specifications. Although Wright did not specifically inquire of Empire at this time as to which manufacturer Empire was obtaining the casework from for the Project, Empire did advise Wright that Empire's bid on the casework was according to plans and specifications. Additionally, Empire did not divulge or advise Wright at this time that the bid was based on Empire manufacturing the casework for the Project. Based on this representation from Empire, Wright listed Empire as its casework subcontractor, and calculated its lump sum bid for the Project using Empire's bid. Although Wright listed Empire as its casework subcontractor in its bid, this did not create an irregularity in Wright's bid since Wright's bid was per plans and specification without exception or exclusion. This would require Wright to furnish casework for the Project manufactured by one of the four approved casework manufacturers listed in the bid documents regardless of which subcontractor Wright listed as the subcontractor for casework. By letter dated November 1, 1991, the Board's architect for the Project requested Wright to have Empire submit written certification by one of the four approved casework manufacturers that its casework was being furnished to Empire for the project. By letter dated November 4, 1991, Empire advised Wright that Empire's bid on the casework for the Project was based on casework to be manufactured by Empire. On the same day, Wright furnished the architect for the Project a copy of Empire's letter of November 4, 1991. In response to a request by the Board, Wright, by letter dated November 7, 1991, advised the Board that Wright would furnish casework manufactured by one of the four approved manufacturers listed in the bid documents for the Project. By letter dated December 3, 1991, Empire advised Wright that Empire would need to withdraw its bid if Empire was required to use casework manufactured by one of the four approved casework manufacturers listed in the bid documents. On that same day, Wright furnished the Board a copy of Empire's letter and requested that the Board allow Wright to remove and replace Empire with Steven Ward and Associates, Inc. (Ward), as the casework subcontractor since Ward would be able to furnish and install casework manufactured by LSI Corporation of America, Inc., one of the four approved casework manufacturers. No Action has been taken on that request. The bid documents provide for a subcontractor to be removed and replaced from the list of subcontractors after the bid is opened if there is a showing of good cause and written approval by the Board and the Project architect is obtained. Although Empire's bid on the casework for the Project submitted to Wright was based on Empire manufacturing the casework, there is competent substantial evidence in the record to establish facts to show that at the time Wright submitted its bid on the Project it had reasonable grounds to believe that Empire's bid on the casework was based on Empire furnishing and installing casework manufactured by one of the four approved casework manufacturers. After determining that Empire could not perform under its bid, Wright obtained a bid from Ward for furnishing and installing the casework for the Project which was less than Ward's original bid submitted to Wright before the bid opening. However, this bid was substantially more than Empire's bid, and if Wright is allowed to substitute Ward for Empire, Wright will have to absorb the additional costs since the bids were lump sum bids. Wright is neither attempting to furnish casework from a manufacturer that is not approved, nor is Wright requesting an increase in the lump sum bid price. The advertisement for Sealed Bids for the Project required that all bidders be prequalified by the Board prior to the bid date. Sovran and one other bidder were not prequalified by the Board prior to the bid date in accordance with Advertisement for Sealed Bids for the Project. Sovran received the bid documents for the Project approximately one month before the bid date but did not file a Notice of Protest of the prequalification requirement contained in the Advertisement for Sealed Bids for the Project. Sovran holds a certificate as a general contractor licensed in the State of Florida in accordance with Chapter 489, Florida Statutes. As a certified general contractor Sovran, pursuant to Section 489.125, Florida Statutes, was authorized to bid on the Project notwithstanding the Board's prequalification requirement. This was explained by the Board's representative at the bid opening. The bid documents required that a subcontractor list be submitted by all bidders, and when submitted with the bid becomes an integral part of the bid. The purpose of the subcontractor list was to prevent bid shopping, and to allow the Board an opportunity to review the subcontractors to determine if any subcontractor on the list had performed unsatisfactorily on previous Board projects. Neither the statutes relating to competitive bidding nor the bid documents prohibit the listing of the general contractor together with a subcontractor on a subcontractor list. The subcontractor list submitted by Sovran indicated "Sovran Constr/Naples" as the name of the subcontractor for the masonry work and "Sovran/Naples" as the name of the subcontractor for the poured-in-place concrete work. "Naples" is Naples Concrete and Masonry Work, Inc. The bid received by Sovran from Naples was for both labor and materials for the poured-in-place concrete and masonry work. Sovran neither requested nor did Naples furnish Sovran a bid to provide labor only for the poured-in-place concrete and masonry work. There was no agreement between Sovran and Naples whereby Sovran would supply the materials and Naples would furnish the labor for the poured-in-place concrete and masonry work. Sovran did request and receive bids from other companies for furnishing materials only for the poured-in-place concrete and masonry work. Sovran listed itself, the general contractor, along with Naples on the subcontractor list for the purpose of supplying the materials for the poured-in- place concrete and masonry work. Sovran's main reason for supplying the materials was that Naples was not bondable. Without a payment bond from Naples, Sovran would be without protection and could be forced into paying double for the materials in the event Naples failed to pay the material suppliers. Although the Superintendent of the Lee County Schools has recommended to the Board that the Board accept Wright's bid for the Project, the Board has not voted on that recommendation. The fact that Wright used Empire's bid to calculate its lump sum bid in no way excuses Wright for the requirement set out in the bid documents that casework used for the Project (when the time comes) be manufactured by one of the four approved casework manufacturers. Wright gains no economic advantage in this regard since the lump sum bid price remains the same. The advertisement for Sealed Bids on the Project provides that the Board reserves the right to waive any and all irregularities of any bid received.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, accordingly RECOMMENDED: That the Board enter a Final Order dismissing the instant bid protest and awarding to Wright the contract for the construction of Elementary School "C", Job No. 91063. DONE and ORDERED this 13th day of February, 1992, in Tallahassee, Florida. WILLIAM R. CAVE 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 13 day of February, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NUMBER 91-7597B1D 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 in this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parenthesis is the Finding(s) of Fact which so adopts the proposed finding(s) of fact: 1 - 3(1,2 and 3 , respectively); 4 - 5(6); 6(4); 7 - 9(5); 12(10); 13(11); 15 - 16(12); 17(13); 18 - 19(16); 20(29); 21(18); 23(19); 24 - 25(20); 26(22); 27(23); 28(22); 29 - 30(29); 32 - 33(25); and 34(26). Proposed finding of fact 10 is rejected as not being supported by competent substantial evidence in the record in that Wright's bid was as per plans and specifications without exceptions or exclusions which included the use of casework manufactured by one of the approved casework manufacturers. Proposed finding of fact 11 is rejected as not being supported by competent, substantial evidence in the record in that the Board knew of Empire's bid being based on nonconforming materials prior to issuing its Notice of Intent. However, the only information the Board had in reference to Wright's bid before issuing its Notice of Intent was that Wright had bid as per plans and specifications and would be installing casework manufactured by one of the approved manufacturers. The only question was whether Empire could furnish casework manufactured by one of the approved manufacturers. Proposed finding of fact 14 is neither material nor relevant. How the Board's architect interpreted Wright's bid is neither material nor relevant to this proceeding. Proposed finding of fact 22 is unnecessary to the conclusion reached in the Recommended Order. Proposed finding of fact 31 is more in the way of an argument than a finding of fact. Proposed findings of fact 35 and 36 are covered in the Preliminary Statement. The timeliness of Kellogg's protest is not an issue and therefore, a finding that it was timely is unnecessary. Rulings on Proposed Findings of Fact Submitted by the Respondent While not specifically adopting proposed finding of fact 1, where material or relevant or necessary to this proceeding, and supported by competent, substantial evidence in the record the stipulated facts have been adopted. Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parenthesis is the Finding(s) of Fact which so adopts the proposed finding(s) of fact: 2(4,5); 3(9); 4 - 5(7); 7 - 8(8); 10(16); 11(14); 12(31); 13(21); and 15(23). Proposed finding of fact 6 is more in the way of an argument than a finding of fact. Proposed finding of fact 9 and 14 are neither material nor relevant. Rulings on Proposed Findings of Fact Submitted by the Intervenor See ruling on Respondent's proposed finding of fact Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parenthesis is the Finding(s) of Fact which so adopts the proposed finding(s) of fact: 2 - 3(21); 4(24); 5 - 6(21); 13(23); 14(24,28); 15(22); 16 - 17(23,24); and 18(28). Proposed findings of fact 7 through 12 are neither material nor relevant to this proceeding. COPIES FURNISHED: David E. Gurley, Esquire Norton, Gurley & Darnell, P.A. 1819 Main Street, Suite 610 Sarasota, FL 34236 Marianne Kantor, Esquire The School Board of Lee County 2055 Central Avenue Fort Myers, FL 33901 James M. Talley, Esquire Fisher, Rushmer, Werrenrath, Keiner, Wack & Dickson, P.A. Post Office Box 712 Orlando, FL 32802 Karl Engel Superintendent Lee County School Board 2055 Central Avenue Ft. Myers, FL 33901 Honorable Betty Castor Commissioner of Education The Capitol Tallahassee, FL 32399-0400
The Issue The two major issues in this case are as follows: Was the failure of Datamaxx to submit resumes of training and maintenance personnel as required by Performance Mandatory No. 10 of the Invitation to Bid a material deviation from the Invitation to Bid such as to render Datamaxx a nonresponsive bidder? If Datamaxx was a nonresponsive bidder, must the contract be awarded to Burroughs, or must DHRS, pursuant to Section 13A-1.002(3), Florida Administrative Code, have the contract rebid, or seek single source procurement or negotiation approval from the Division of Purchasing?
Findings Of Fact Based on the admissions of the parties, on the testimony of the witnesses at the hearing, and on the exhibits received in evidence, I make the following findings of fact: For at least the past 10 years, the DHRS Data Communications Network has been maintained by Burroughs on a sole source basis. At the end of the previous Burroughs Terminal Maintenance contract with Burroughs, the Department of General Services (DOS) asked DHRS to bid the contract in lieu of sole source procurement, it being the belief of DOS that there was competition in this area. On or about September 19, 1986, DHRS published an Invitation to Bid which advised prospective bidders that sealed bids would be opened on October 20, 1986, for a contract, known as "Burroughs Terminal Maintenance" [Bid No. 86 ATM] regarding maintenance of the terminals of the DHRS Data Communications Network. The Special Conditions of the Invitation to Bid contained, among others, the following provisions: The State has established certain require- ments with respect to bids to be submitted by bidders. The use of "shall," "must" or "will" (except to indicate simple futurity) in this Invitation to Bid indicates a requirement or condition from which a material deviation may not be waived by the State. A deviation is material if, in the State's sole discretion, the deficient response is not in substantial accord with this Invitation to Bid requirements, provides an advantage to one bidder over other bidders, has a potentially significant effect on the quantity or quality of items bid, or on the cost to the State. Material deviations cannot be waived. (at p. 1) No negotiations, decision, or actions shall be initiated or executed by the bidder as a result of any discussions with any State employee. Only those communications which are in writing from the Department's Purchasing office may be considered as a duly authorized expression on behalf of the State. Also, only communications from bidders which are signed and in writing will be recognized by the State as duly authorized expressions on behalf of the bidder. (at p. 2) All personnel performing maintenance must be trained to service the equipment covered by this contract. Training shall be completed before the individual is assigned to service the equipment covered by this contract. Training shall be provided to whatever level is necessary to ensure the individual has the required qualifications to perform satisfactory maintenance service on Burroughs equipment listed in Attachment A of this Invitation to Bid. Bidder shall submit with their bid a summary of their Burroughs training program and resumes of personnel who will be performing this training and the resumes of personnel who will be per- forming the maintenance. (at p. 8) Bidder shall certify to the State, at the time the bid is submitted, that bidder has existing established service centers staffed with personnel trained to service the equipment covered by this contract . . . In lieu of this requirement, if bidder does not have existing established service centers, liaison office, and trained personnel, and bidder submits a plan for compliance, the required certification must be given the State no later than two (2) weeks prior to the anticipated starting date of the contract as indicated in the paragraph of this document entitled Calendar of Events. Failure to comply with this requirement shall result in rejection of the bid and award of the bid to the next lowest responsive bidder. The Invitation to Bid was drafted by the Department of Health and Rehabilitative Services. The only bidders on the contract (other than no- bids) were Burroughs and Datamaxx. DHRS found Burroughs and Datamaxx both to be responsive bidders and posted their bids making them public in the recognized manner of publicizing the bidder to be awarded a bid. Both bids were found to be responsive by DHRS at the time they were made public. The Datamaxx bid was the lowest bid and the Burroughs bid was the next to lowest bid. DHRS staff recommended the contract be awarded to Datamaxx. The Datamaxx bid was approximately $784,000 less than the Burroughs bid. In its bid Datamaxx indicated that it understood and agreed to all provisions of the Invitation to Bid, specifically including those dealing with Mandatory Requirements, Verbal Instruction Procedure, Rejection of Bids, Bid Evaluation, Performance Mandatories, and Certification. Datamaxx submitted the Certification required under the terms of the Invitation to Bid and did not submit a plan for compliance with its bid. Datamaxx never requested in writing that the requirement for resumes be waived, and DHRS never advised Datamaxx in writing that it did not have to submit the resumes. Datamaxx did not submit with its bid the resumes of training and maintenance personnel required under Performance Mandatory 10 of the Invitation to Bid. Performance Mandatory No. 10 required the submission of resumes with the bid, and did not concern an event that would take place after the bid had been let. DHRS considered the requirement for resumes to be a mandatory requirement. The qualifications of the persons who would be performing the maintenance under the contract would have a potentially significant effect on the quality of the maintenance provided. Nothing could be more material to the contract than the ability of the personnel to perform that contract. The difference in the dollar amount of the bids of Burroughs and Datamaxx influenced the decision of DHRS in finding Datamaxx to be a responsive bidder. This was a major reason Datamaxx was found to be a responsive bidder. In evaluating the Datamaxx bid, DHRS went outside the material provided in the Datamaxx bid. Subsequent to the posting of bids, DHRS met with Datamaxx and advised Datamaxx that its initial submission was deficient for not including resumes with the bid, that DHRS had waived the resumes, but that in order for DHRS to continue its recommendation that the bid be awarded to Datamaxx, DHRS had to have the resumes prior to the awarding of the bid. DHRS considered it an error and a deficiency in the bid that the resumes were not furnished. Datamaxx, on November 6, 1986, advised DHRS in a letter to Charles Ray that it would submit a plan which would address, among other things, service personnel resumes by November 17, 1986. DHRS could not have considered Datamaxx's letter of November 6, 1986, in evaluating whether Datamaxx was a responsive bidder, because that letter was not received until after DHRS had already found Datamaxx to be a responsive bidder and recommended that the contract be awarded to Datamaxx. Had Datamaxx not submitted the resumes prior to November 17, 1986, DHRS staff would have recommended that the award of the contract be withdrawn. The performance the State would receive under the contract would directly depend on the qualifications of the persons performing the service and the maintenance, and the resumes would be the only source of information regarding the qualifications of the personnel.
Recommendation For all of the foregoing reasons, it is recommended that a final order be entered to the following effect: Concluding that the bid submitted by Datamaxx USA Corporation on Bid No. 86 ATM should be rejected on the grounds that it is not responsive, Concluding that the bid submitted by Burroughs Corporation should be rejected on the basis of Rule 13A-1.002(3), Florida Administrative Code, and, Providing for the agency to issue a second invitation to bid/request for proposals or take other action provided by Rule 13A-1.002(3), Florida Administrative Code. DONE AND ENTERED this 25th day of June 1987, at Tallahassee, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 25th day of June 1987. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 86-4460B1D The following are my specific rulings on each of the proposed findings of fact submitted by both parties: Findings proposed by Petitioner Paragraphs 1 through 19 are accepted with a few minor editorial modifications. The first two lines of paragraph 20 are rejected as redundant. The remainder of paragraph 20 is accepted. Findings proposed by Respondent Paragraphs 1 and 2 are accepted in substance. Paragraph 3 is rejected as constituting unnecessary details. Paragraphs 4 through 7 are accepted. Paragraphs 8, 9, and 10 are rejected as irrelevant. Paragraph 11 is rejected in part as irrelevant and in part as contrary to the greater weight of the evidence. Paragraph 12 is accepted. Paragraph 13 is rejected as constituting irrelevant and unnecessary details. COPIES FURNISHED: Robert L. Powell Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407 Tallahassee, Florida 32399-0700 Edgar Lee Elzie, Jr., Esquire MacFarlane, Ferguson, Allison & Kelly 804 First Florida Bank Building Tallahassee, Florida 32301 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact On or about December 29, 1981, the College solicited sealed bids for construction of alterations and additions to the Technical and Gymnasium Buildings located on its campus in Madison, Florida. In response, seven general contractors submitted bids. (P-1, P-2, P-3.) Bids were publicly opened on February 9, 1982. Griffin Construction, with a bid of $536,575, was the apparent low bidder; the second lowest bidder was Long Contractors, with a bid of $539,512. (Testimony of Griffin, Sims, Rutherford; P-3, P-4, P-5.) After the low bid was identified, Tom McClanahan, representing Long Contractors, asked that the subcontractor list accompanying the low bid be opened. Griffin Construction's subcontractor list was then opened. McClanahan asked if the license and charter numbers of the subcontractors were listed. 2/ Upon learning that these numbers were not included on Griffin Construction's subcontractor list, McClanahan protested. (Testimony of Sims, Rutherford, Griffin.) At its February 15, 1982, meeting, the College District Board of Trustees ("Board") rejected the low bid of Griffin Construction on the sole ground that the omission of subcontractor license and charter numbers constituted a failure to comply with the conditions of the bid documents. 3/ The Board then voted to award the contract to Long Contractors, the second lowest bidder, on the ground that it was the lowest bid conforming to the bid documents. In so doing, the Board followed the College president's recommendation--a recommendation based on his belief that the non-complying bid must be rejected, that it did not involve a matter of Board discretion. (Testimony of Sims, Rutherford, Griffin; Stipulation of Parties; P-41.) The bid specifications contain instructions to bidders requiring "each Bidder . . . [to] submit with his proposal a list of the subcontractors who will perform the work . . . as indicated by the `List of Subcontractors' form." (P-1, P-2.) The instructions further provide: The applicable subcontractor license registration or certification number must be noted on the bid opposite his name, and in the event that the subcontractor is a corporation, his State Corporate Charter number shall also be noted. If the subcontractor is an out of state firm, their Charter number with the Secretary of State to do business in the State of Florida should also be noted. The "Listing of Subcontractors" form provided with the specifications contains column headings for the names and addresses of the subcontractors but does not contain a separate heading for the requested license or corporate charter numbers. 4/ The form states that the subcontractor list "is an integral part of the bid." (P-1, P-2.) The bid instructions further require bidders to evaluate and determine the qualifications of their listed subcontractors. The bidder shall have determined to his own complete satisfaction that a listed subcontractor has been successfully engaged in this particular type of business for a reasonable length of time, has successfully completed installations comparable to that which is required by this agreement and is qualified both technically and financially to perform that pertinent phase of the work for which he is listed. (P-1, P-2.) The bid documents expressly reserve to the College the right "to reject any or all bids, and to waive informalities." (P-1 P-2.) No bidder correctly listed the required license and corporate charter numbers on its "Listing of Subcontractors" form. Griffin Construction. Griffin failed to include any license or corporate charter numbers. However, by subsequent letters dated February 9 and February 18, 1982, and at hearing, it supplied the required subcontractor license and charter numbers. Long Contractors. Long listed for its roofing subcontractor a sheet metal registration number, not the required roofing license number. [A sheet metal registration does not qualify a contractor for roofing work. See, 489.105, 489.113, Fla. Stat. (1981).] For its electrical subcontractor, Long omitted the prefix, "ER" from the listed number. For its plumbing subcontractor, Long listed a mechanical registration number instead of the required plumbing certification or registration number. [A mechanical registration does not qualify a contractor to perform plumbing work. See, 489.105, 489.113, supra.] Of the four areas requiring state licenses--roofing, heating and air conditioning, electrical, and plumbing--Long listed correctly only the registration number for its heating and air conditioning subcontractor. Long incorrectly listed No. FO6962 as the corporate number of Gandy Enterprises, its painting subcontractor. This is the number of a related corporation, Industrial Coatings, Inc. Remaining Bidders. Of the five other general contractors submitting bids, two-- Richard Walker Construction Company and GRC Contracting, Inc.--omitted all subcontractor license and charter numbers. The other three bidders failed to completely list all the required numbers. (Testimony of Rutherford; P-11, P-12, P-13, P-14, P-15, P-16, P-17, P-34, P-37, R-1, R-5.) The project architect testified that the submittal of incorrect or incomplete subcontractor license and charter numbers was a deficiency which a bidder should be allowed to cure after bid opening. But the failure to submit any required "number" was a deficiency which, in his opinion, could not be similarly corrected. He failed, however, to supply a reasonable basis for drawing such a distinction. Therefore, his opinion on this question is given little weight. 5/ (Testimony of Rutherford.) Subcontractor license and charter numbers are readily obtainable and can be verified by contacting the pertinent state agency--the Florida Department of Professional Regulation, Construction Industry Licensing Board, or the Florida Department of State. (Testimony of Griffin, Rutherford; P-32, P-33, P- 34, P-35, P-36, P-37.) The project architect, William Rutherford, routinely requires the listing of subcontractor license and charter numbers on bids for public construction projects. The main purpose it serves is that it would enable him to identify the listed contractor, since sometimes subcontractors have similar business names. Although if he was uncertain about the qualifications of a subcontractor, he would ordinarily question the general contractor. (Testimony of Rutherford.) Although Mr. Rutherford has customarily required the listing of subcontractor "numbers" on public projects, he has never made any use of those numbers in the past. (Testimony of Rutherford.) The general contractor who is awarded the contract is responsible to Mr. Rutherford and the College for construction of the project in accordance with the bid specifications. If, after bid opening, a listed subcontractor is unable to perform, Mr. Rutherford would ordinarily arrange for substitution of a new subcontractor acceptable to the general contractor and owner. (Testimony of Rutherford.) Griffin Construction's failure to list the license and charter numbers of its listed subcontractors, and its subsequent curing of that failure, did not affect the amount of its bid 6/ by giving it an advantage or benefit not enjoyed by other bidders. The bid omission did not allow Griffin Construction the opportunity to change any material element of its bid after bid opening. The inclusion or exclusion of subcontractor "numbers" at bid opening does not affect the ability of a contractors to obtain the required bond, the quality of bidding general contractors, the quality of listed subcontractors, the quality of work performed, or any material feature of the competitive bidding process. (Testimony of Griffin, Rutherford.)
Recommendation Based on the foregoing, it is RECOMMENDED: That the construction contract in question be awarded to Vick Griffin Construction Company, the lowest responsible bidder. DONE AND RECOMMENDED this 29th day of April, 1982, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of April, 1982.
