Findings Of Fact Background On May 6, 1988, Respondent, Department of Insurance and Treasurer (Department), issued an invitation to bid (ITB), numbered DIT-87/88-26, whereby it sought to establish a 12-month germ contract for the purchase of Unisys personal computers, peripheral equipment and accessories. On May 9, 1988, Petitioner, Palm Beach Group, Inc., requested a copy of the ITB from the Department, and was mailed a copy of the ITB that day. Petitioner received its copy of the ITB on May 14, 1988, and filed its bid with the Department on May 19, 1988. By May 20, 1988, the bid opening date, three bids had been filed with the Department. Pertinent to this case are the bids of Unisys Corporation, which bid total unit prices of 140,792.00, and petitioner, which bid total unit prices of 16, 753.002 On May 23, 1988, the bid results were posted by the Department. The bid results revealed that the bid of petitioner had been rejected as nonresponsive to the ITB because it did not include page 13 of the ITB, and therefore did not include a bid on the 14 items listed on that page of the ITB. The bid results further revealed that the Department proposed to award the contract to Unisys Corporation. Petitioner timely filed its notice of protest and formal protest with the Department. On May 24, 1988, petitioner submitted to the Department page 13 of its bid, and proposed to supply the 14 items listed on that page at "no charge." The bid documents The ITB consisted of 18 consecutively numbered pages. Page 1 included the bidder acknowledgment form an some of the general conditions of the bid. Page 2 Included the remainder of the general conditions. Notably, page 1 of the ITB conspicuously provided that it was "Page 1 of 18 pages." Pertinent to this case, the ITB contained the following general conditions: SEALED BIDS: All bid sheets and this form must be executed and submitted in a sealed envelope....Bids not submitted on attached bid form shall be rejected. All bids are subject to the condition specified herein. Those which do not comply with these conditions are subject to rejection. * * * BID OPENING:...It is the bidder's responsibility to assure that his bid is delivered at the proper time and place of the bid opening. Bids which for any reason are not so delivered will not be considered....A bid may not be altered after opening of the bids... PRICES, TERMS, AND PAYMENT * * * (c) MISTAKES: Bidders are expected to examine the specifications, delivery schedule, bid prices, extensions and all instructions pertaining to supplies and services. Failure to do so will be at a bidder's risk.... INTERPRETATIONS/DISPUTES: Any questions concerning conditions and specifications shall be directed in writing to this office for receipt no later than ten (10) days prior to the bid opening. Inquiries must reference the date of bid opening and bid number. No Interpretation shall be considered binding unless provided in writing by the State of Florida in response to requests in full compliance with this provision. Any actual or prospective bidder who disputes the reasonableness necessity or competitiveness of the terms and conditions of the Invitation to bid, bid selection or contract award recommendation shall file such protest in form of a petition in compliance with Rule 13A-1.006 Florida Administrative Code. Fail to file a protest within the time prescribed in Section 120.53(5), Florida statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. NOTE ANY AND ALL SPECIAL CONDITIONS AND SPECIFICATIONS ATTACHED HERETO WHICH VARY FRONT THESE SPECIAL CONDITIONS SHALL HAVE PRECEDENCE. ATTACHMENTS: Special Conditions-Page 3 Bid sheets-pages 4-16 Minority Certification-Page 17 Attachment to all bids, etc.-page 18 Among the special conditions which appeared on page 3 of the ITB were the following The purpose of this bid is to obtain competitive prices per unit for the purchase of UNISYS personal computers, peripheral equipment and accessories for the Department of Insurance. * * * No substitutes or equivalents will be acceptable to the Department. The bid shall be awarded on an "all or none" basis using the low total bid price comprised of the total of all sections. Following the special conditions of the ITB appeared the bid sheets; pages 4-16 of the ITB. These sheets were divided into 10 sections: processors, displays, display controllers, keyboards, diskette drive, hard disk drives, memory, operating systems, miscellaneous devices, and lan options. Under each section the Department listed by part number and description the items that must be bid. The last page of the bid sheets, page 16, provided space to total the prices bid on sections 1-10. Notably, the following language appeared at the bottom of page 16: NOTE. RETURN ENTIRE UNIT PRICING, SECTION 1 THRU 10, PAGE 4 THRU 15 WITH THIS BID SHEET FOR EVALUATION AND AWARD PURPOSES. Petitioner did not protest the bid specifications or conditions within 72 hours after receipt of the ITB, nor did it raise any question or seek any interpretation of the conditions or specifications. The bid protest At hearing, petitioner contended that it should be excused for failing to include page 13 of the ITB in its bid and to bid those items, because such page was not included In the ITB forwarded to it by the Department or, alternatively, that its to include page 13 and to bid those items was a minor irregularity that could be cured by its submittal, after bid opening, of page 13 with an offer to supply the items on that page at "no charge." Petitioner's contentions and the proof offered to support them are not persuasive. First, the proof failed to establish that page 13 was not included in the ITB forwarded to the petitioner. Second, there was no ambiguity in the ITB. Rather, the ITB clearly provided as discussed supra, that the bid sheets consisted of pages 4-16, and that the bid sheets must be submitted to the Department for evaluation and award purposes. Under such circumstances, even if page 13 had been missing from the ITB forwarded to the petitioner, petitioner can not be excused for its failure to include page 13 and to bid the items on that page, and the Department's invalidation of petitioner's bid for such failure cannot be deemed arbitrary, capricious, or an abuse of discretion. A minor irregularity? Minor irregularity is defined by Rule 13A-1.002(10), Florida Administrative Code, as: ...a variation from the invitation to bid... which does not affect the price of the bid..., or give the bidder... an advantage or benefit not enjoyed by other bidders..., or does not adversely impact the interests of the agency. Variations which are not minor can not be waived. The items listed on page 13 of the ITB were an integral part of this bid, which was to be awarded on an "all or none" basis. Under such circumstances, the deficiency cannot be deemed minor, because it could affect the price of the bid or give petitioner an advantage not enjoyed by other bidders. Succinctly, petitioner could revisit its bid after the bids had been made public and, considering how badly it wanted the contract, bid or not bid the omitted items. If it elected not to bid the items, petitioner could effectively disqualify itself and withdraw its bid. The other bidders who timely submitted their bids would not have an opportunity to revisit their bids to the Items listed on page 13 or to withdraw their bids, but would be held to the provision of the ITB that prohibited such withdrawal for 45 days after bid opening.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered dismissing the formal protest filed by Palm Beach Group, Inc. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of June, 1988. WILLIAM J. KENDRICK 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 24th day of June, 1988.
The Issue Whether Respondent acted contrary to the agency's governing statutes, rules, or policies or the bid specifications in its proposed decision to award Contract No. T7380 to Astaldi Construction Corporation ("Astaldi").
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, and on the entire record of the proceeding, the following Findings of Fact are made: The Department is a state agency authorized by section 337.11 to contract for the construction and maintenance of roads within the State Highway System, the State Park Road System, and roads placed under its supervision by law. The Department is specifically authorized to award contracts under section 337.11(4) to “the lowest responsible bidder.” On April 15, 2016, the Department advertised a bid solicitation for Contract T7380, seeking contractors for the widening of a 3.8 mile portion of U.S. Highway 301 in Hillsborough County from two lanes to six lanes between State Road 674 and County Road 672 and over Big Bull Frog Creek. The advertisement provided a specification package for the project and the “Standard Specifications for Road and Bridge Construction” (“Standard Specifications”) used on Department roadway projects. The work included seven components: bridge structures (Section 0001), roadway (Section 0002), signage (Section 0003), lighting (Section 0004), signalization (Section 0005), utilities (Section 0006), and intelligent transportation systems (Section 0007). The advertisement identified 666 individual items of work to be performed and quantity units for each item. The project was advertised as a low-bid contract with a budget estimate of $51,702,729. The Department’s bid proposal form contains five columns with the following headings: Line Number; Item Number and Item Description; Approximate Quantities and Units; Unit Price; and Bid Amount. The bid proposal form contains line items for the seven components of the project. The utilities component contains 42 line items, each with an Item Number and Item Description. For example, Line Number 1410 corresponds with the following Item Number and Item Description: “1050 11225 Utility Pipe, F&I, PVC, Water/Sewer, 20–40.9 [inches].” Each bidder inserts a Unit Price for the line item in the corresponding “Unit Price” column. The “Bid Amount” column for each line item is an amount generated by multiplying a bidder’s Unit Price by the Quantities (determined by the Department) for each Line Number. The Bid Amount for each Line Number is then added together to generate the “Total Bid Amount” representing the bid for the entire project. Astaldi, Prince, Hubbard, and other potential bidders attended the mandatory pre-bid meeting. Prequalified contractors were given proposal documents that allowed them to enter bids through Bid Express, the electronic bidding system used by the Department. Plan revisions were issued by addenda dated May 10, 2016, and June 7, 2016. A Question and Answer Report was published and updated as inquiries were addressed. Bids were opened on the letting date of June 15, 2016. Bids for Contract T7380 were received from Astaldi, Prince, Hubbard, the DeMoya Group (“DeMoya”), Ajax Paving Industries of Florida, LLC (“Ajax”), and Cone & Graham, Inc. (“Cone & Graham”). The bids were reviewed by the Department’s contracts administration office to ensure they were timely, included a Unit Price for each line item, and contained the completed certifications required by the specifications. Bidders were checked against the Department’s list of prequalified bidders to confirm they possessed a certification of qualification in the particular work classes identified by the bid solicitation. Each bidder’s total current work under contract with the Department was examined to ensure that award of Contract T7380 would not place the bidder over its Department-designated financial capacity limit. Astaldi submitted the lowest bid, a total amount of $48,960,013. Prince submitted the next lowest bid, a total amount of $57,792,043. Hubbard’s total bid was the third lowest at $58,572,352.66. The remaining bidders came in as follows: DeMoya, $63,511,686.16; Ajax, $68,617,978.10; and Cone & Graham, $70,383,697.74. All bidders were prequalified in the appropriate work classes and had sufficient financial capacity, in accordance with section 337.14 and Florida Administrative Code Chapter 14-22. The Department’s construction procurement procedure, from authorization to advertisement through contract execution, is outlined in the Department’s “Road and Bridge Contract Procurement” document (“Contract Procurement Procedure”). The scope statement of the Contract Procurement Procedure provides: “This procedure applies to all Contracts Administration Offices responsible for advertising, letting, awarding, and executing low bid, design-bid-build, construction, and maintenance contracts.” Limited exceptions to the procedure may be made if approved by the assistant secretary for Engineering and Operations. If federal funds are included, the Federal Highway Administration division administrator, or designee, must also approve any exceptions from the procedure. The stated objectives of the Contract Procurement Procedure are: “to standardize and clarify procedures for administering low-bid, design-bid-build, construction, and maintenance contracts” and “to provide program flexibility and more rapid response time in meeting public needs.” The Department’s process for review of bids is set forth in the “Preparation of the Authorization/Official Construction Cost Estimate and Contract Bid Review Package” (“Bid Review Procedure”). The scope statement of the Bid Review Procedure states: This procedure describes the responsibilities and activities of the District and Central Estimates Offices in preparing the authorization and official construction cost estimates and bid review packages from proposal development through the bid review process. Individuals affected by this procedure include Central and District personnel involved with estimates, specifications, design, construction, contracts administration, work program, production management, federal aid, and the District Directors of Transportation Development. The Bid Review Procedure contains a definitions section that defines several terms employed by the Department to determine whether a bid or a unit item within a bid is “unbalanced.” Those terms and their definitions are as follows: Materially Unbalanced: A bid that generates reasonable doubt that award to that bidder would result in the lowest ultimate cost or, a switch in low bidder due to a quantity error. Mathematically Unbalanced: A unit price or lump sum bid that does not reflect a reasonable cost for the respective pay item, as determined by the department’s mathematically unbalanced bid algorithm. Official Estimate: Department’s official construction cost estimate used for evaluating bids received on a proposal. Significantly Unbalanced: A mathematically unbalanced bid that is 75% lower than the statistical average. Statistical Average: For a given pay item, the sum of all bids for that item plus the Department’s Official Estimate which are then divided by the total number of bids plus one. This average does not include statistical outliers as determined by the department’s unit price algorithm. For every road and construction project procurement, the Department prepares an “official estimate,” which is not necessarily the same number as the “budget estimate” found in the public bid solicitation. The Department keeps the official estimate confidential pursuant to section 337.168(1), which provides: A document or electronic file revealing the official cost estimate of the department of a project is confidential and exempt from the provisions of s. 119.07(1) until the contract for the project has been executed or until the project is no longer under active consideration. In accordance with the Bid Review Procedure, the six bids for Contract T7380 were uploaded into a Department computer system along with the Department’s official estimate. A confidential algorithm identified outlier bids that were significantly outside the average (such as penny bids) and removed them to create a “statistical average” for each pay item. Astaldi’s unit pricing was then compared to the statistical average for each item. The computer program then created an “Unbalanced Item Report,” flagging Astaldi’s “mathematically unbalanced” items, i.e., those that were above or below a confidential tolerance value from the statistical average. The unbalanced item report was then reviewed by the district design engineer for possible quantity errors. No quantity errors were found.1/ The Department then used the Unbalanced Item Report and its computer software to cull the work items down to those for which Astaldi’s unit price was 75 percent more than or below the statistical average. The Department sent Astaldi a form titled “Notice to Contractor,” which provided as follows: The Florida Department of Transportation (FDOT) has reviewed your proposal and discovered that there are bid unit prices that are mathematically unbalanced. The purpose of this notice is to inform you of the unbalanced nature of your proposal. You may not modify or amend your proposal. The explanation of the bid unit prices in your proposal set forth below was provided by ASTALDI CONSTRUCTION CORPORATION on ( ) INSERT DATE. FDOT does not guarantee advanced approval of: Alternate Traffic Control Plans (TCP), if permitted by the contract documents; Alternative means and methods of construction; Cost savings initiatives (CSI), if permitted by the contract documents. You must comply with all contractual requirements for submittals of alternative TCP, means and methods of construction, and CSI, and FDOT reserves the right to review such submittals on their merits. As provided in section 5-4 of the Standard Specifications for Road and Bridge Construction you cannot take advantage of any apparent error or omission in the plans or specifications, but will immediately notify the Engineer of such discovery. Please acknowledge receipt of this notice and confirmation of the unit bid price for the item(s) listed below by signing and returning this document. Section 5.4 of the Bid Review Procedure describes the Notice to Contractor and states: “Contracts are not considered for award until this form has been signed and successfully returned to the Department per the instruction on the form.” State estimating engineer Greg Davis testified that the stated procedure was no longer accurate and “need[s] to be corrected” for the following reason: Since the procedure was approved back in 2011, we’ve had some subsequent conversations about whether to just automatically not consider the award for those that are not signed. And since then we have decided to go ahead and just consider the contract, but we are presenting a notice, of course, unsigned and then let the technical review and contract awards committee determine. Astaldi signed and returned the Notice to Contractor and noted below each of the ten listed items: “Astaldi Construction confirms the unit price.” Mr. Davis explained that the purpose of the Notice to Contractor form is to notify the contractor that items have been identified as extremely low and to ask the contractor to confirm its understanding that in accepting the bid, the Department will not necessarily approve design changes, methods of construction, or maintenance of traffic changes. Section 6.6 of the Contract Procurement Procedure sets forth the circumstances under which an apparent low bid must be considered by the Department’s Technical Review Committee (“TRC”) and then by the Contract Awards Committee (“CAC”). Those circumstances include: single bid contracts; re-let contracts; “significantly mathematical unbalanced” bids; bids that are more than 25 percent below the Department’s estimate; 10 percent above the Department’s estimate (or 15 percent above if the estimate is under $500,000); materially unbalanced bids, irregular bids (not prepared in accordance with the Standard Specifications); other bid irregularities2/; or “[a]ny other reason deemed necessary by the chairperson.”3/ Bids that are not required to go before the TRC and CAC are referred to as “automatic qualifiers.” Because it was mathematically unbalanced, the Astaldi bid was submitted to the TRC for review at its June 28, 2016, meeting. The TRC is chaired by the Department’s contracts administration manager, Alan Autry, and is guided by a document entitled “Technical Review Committees” (“TRC Procedure”). The TRC Procedure sets forth the responsibilities of the TRC in reviewing bid analyses and making recommendations to the CAC to award or reject bids. The TRC voted to recommend awarding Contract T7380 to Astaldi. The TRC’s recommendation and supporting paperwork was referred to the CAC for its meeting on June 29, 2016. The duties of the CAC are described in a document entitled “Contracts Award Committees” (“CAC Procedure”). Pursuant to the CAC Procedure, the CAC meets approximately 14 days after a letting to assess the recommendations made by the TRC and determines by majority vote an official decision to award or reject bids. Minutes for the June 29, 2016, CAC meeting reflect 21 items before the committee including: two single bid contracts; four bids that were 10 percent or more above the official estimate; one bid that was 15 percent or more above the official estimate on a project under $500,000; three bids that were more than 25 percent below the official estimate; and 11 bids with significantly unbalanced items, including Contract T7380 with an intended awardee of Astaldi. The CAC voted to award Contract T7380 based on the low bid submitted by Astaldi. A Notice of Intent to award the contract to Astaldi was posted on June 29, 2016. As noted at Finding of Fact 2, supra, Contract T7380 consisted of seven components: structures, roadway, signage, lighting, signalization, utilities, and intelligent transportation system. The Department does not compare bids by component, but looks at the total bid amount to find the lowest bidder. The Department also reviews the bids for discrepancies in individual unit items using the process described above. Astaldi’s bid of $48,960,013 was approximately $8.8 million below Prince’s bid of $57,792,043, $9.6 million less than Hubbard’s bid of $58,572,352, and $2.7 million below the Department’s public proposal budget estimate of $51,702,729. As part of its challenge to the intended award, Prince performed a breakdown of bids by individual components and discovered that nearly all of the differences between its bid and Astaldi’s could be attributed to the utilities component. Astaldi’s bid for the utilities component was $7,811,720, which was roughly $8.5 million below Prince’s utilities bid of $16,305,903 and $5.8 million below Hubbard’s utilities bid of $13,603,846.4/ The utilities component was included pursuant to an agreement between the Department and Hillsborough County, the owner of the water and sewer lines, relating to the improvement of water and sewer lines along the roadway limits of the project. The utility work consists of installing a new water- line and force main sewer. The existing water main and the existing force main conflict with the proposed location of the new storm drainage system. The new water main and force main must be installed, tested, and approved before being put into active service. To prevent water utility outages to customers, the new system must be installed and approved before the existing waterline and existing force main can be cut off and removed. Utility work is therefore the first task to be performed on Contract T7380. Once the utility component is completed, the contractor will furnish and install the stormwater system, the roadway, the bridgework, and all other components. Article 3-1 of the Standard Specifications5/ reserves to the Department the right to delete the utility relocation work from the contract and allow the utility owner to relocate the utilities. Utilities are the only portion of a Department contract subject to deletion because the funding is provided by the utility owner, which usually has allocated a certain dollar figure to contribute towards the contract prior to the bidding. If the bid for utilities comes in over the utility owner’s budget, the owner can opt out of the contract and self-perform. In this case, Hillsborough County had contracted with the Department to contribute $8.9 million for utility relocation work. The Department did not exercise the option to delete the utilities portion of the contract. Jack Calandros, Prince’s chief executive, testified that Prince uses a computer program called HeavyBid, created and supported by a company called HCSS, to build the cost components of its bids. Every witness with industry knowledge agreed that HeavyBid is the standard program for compiling bids in the construction field. Mr. Calandros testified that cost components include material quotes provided by third-party vendors and quotes from potential subcontractors. Labor and equipment costs are ascertained by using historical rates and actual cost estimates that are tracked by the HeavyBid software. Prince maintains its own database of costs derived from 20 years’ experience. Mr. Calandros stated that Prince’s internal labor and equipment rates are checked and adjusted at least once a year to ensure they are current and accurate based on existing equipment and personnel. Prince received three vendor quotes for the materials to perform the utility work on Contract T7380. In compiling its bid, Prince ultimately relied on a final quote from Ferguson Waterworks (“Ferguson”) of $8,849,850. Based on this materials quote and Prince’s overall utilities bid of $16,305,903, Mr. Calandros opined that it would not be possible for Astaldi to perform the utilities component for its bid amount of $7.8 million. Prince’s estimating expert, John Armeni, reviewed Astaldi’s bid file, read the deposition testimony of Astaldi’s chief estimator, Ed Thornton, and spoke to Mr. Thornton by telephone. Mr. Armeni also reviewed Prince’s bid and the bid tabulation of all bidders’ utilities component line items. Based on his review and his extensive experience in the industry, Mr. Armeni concluded that Astaldi’s bid does not include all costs for labor, material, and equipment necessary to construct the utilities portion of this project. Mr. Armeni reviewed the materials quote from Ferguson that Prince used in its bid. He noted that Astaldi’s bid file contained an identical quote from Ferguson of $8.8 million for materials, including some non-utilities materials. Mr. Armeni noted that the Ferguson quote for utilities materials alone was approximately $8 million, an amount exceeding Astaldi’s entire bid for the utilities portion of the project. Mr. Armeni also noted that Astaldi’s overall bid was 18 percent below that of the second lowest bidder, Prince. He testified that 18 percent is an extraordinary spread on a bid where the Department is providing the quantities and all bidders are working off the same drawings and specifications. Mr. Armeni believed that the contracting authority “should start looking at it” when the difference between the lowest and second lowest bidder is more than 10 percent. In his deposition, Mr. Thornton testified he was not aware of how Astaldi arrived at its bid prices for the utility section of the project. Mr. Thornton indicated multiple times that he was not Astaldi’s most knowledgeable person regarding the bid submitted by Astaldi on Contract T7380 project. He testified that Astaldi intended to subcontract the utilities work and acknowledged that the company received a subcontractor quote of $14.9 million after the bids were submitted. Mr. Thornton did not know if Astaldi had solicited the quote. He said it is not unusual for a company to receive subcontractor bids after it has been named the low bidder on a project. Mr. Thornton conceded that Astaldi’s bid did not include all the costs necessary to construct the utilities portion of Contract T7380. At his deposition, he did not have before him the materials needed to determine which items of cost Astaldi had omitted. Mr. Thornton testified that Astaldi was not missing any information it needed at the time of bid submission and understood that its price was to include all labor, materials, and subcontracting costs to perform the contract. After the proposed bid award, Astaldi used HeavyBid to produce a report indicating that the company now estimates its cost of performing the contract at $53,708,129.03, or roughly $4.75 million more than its winning bid. Mr. Thornton testified that Astaldi nonetheless stood ready to execute the contract and perform the work at its bid price. Central to the dispute in this case is Standard Specifications Section 9, “Measurement and Payment,” article 9-2 of which is titled “Scope of Payments.” In particular, subarticle 9-2.1 provides: 9-2.1 Items Included in Payment: Accept the compensation as provided in the Contract as full payment for furnishing all materials and for performing all work contemplated and embraced under the Contract; also for all loss or damage arising out of the nature of the work or from the action of the elements, or from any unforeseen difficulties or obstructions which may arise or be encountered in the prosecution of the work until its final acceptance; also for all other costs incurred under the provisions of Division I. For any item of work contained in the proposal, except as might be specifically provided otherwise in the payment clause for the item, include in the Contract unit price (or lump sum price) for the pay item or items the cost of all labor, equipment, materials, tools and incidentals required for the complete item of work, including all requirements of the Section specifying such item of work, except as specially excluded from such payments. Prince contends that the second paragraph of subarticle 9-2.1 renders Astaldi’s bid nonresponsive because Astaldi admittedly failed to include “the cost of all labor, equipment, materials, tools and incidentals” in its bid. Prince points out that the “Technical Special Provisions” governing the utilities portion of the project reinforce the requirement that each bidder include all costs for the work. Technical Special Provisions Section 1-7.1 provides that “[p]ipe installation cost shall include all necessary work, equipment, and labor needed for installing the pipe, such as, coordination with existing utilities and support during construction and support of existing power poles during construction.” Technical Special Provisions Section 1-8.1 goes on to say that “[n]o separate payment will be made for the following items for work under this Technical Special Provision and the cost of such work shall be included in the applicable contract pay items of work,” followed by a comprehensive list of 30 items. Prince concludes that the requirement that each bidder include all costs, including costs of all necessary labor, equipment, and materials, in the Unit Price for each work item is “manifest” in the bid specifications and requires rejection of any bid that does not include all costs. Mr. Armeni opined that if one bidder excludes a portion of its costs, the other bidders are placed at a competitive disadvantage. Alan Autry, the Department’s central contracts administration manager, testified that five other projects were let as part of the bid package that included Contract T7380. He stated that it is typical for the Department to list multiple projects on one day. Mr. Autry’s office usually performs one bid letting per month, with the holiday months of November and December rolled together in a single letting. Mr. Autry stated that his office lets between 200 and 300 projects per year, not counting contracts that are let at the district level. Twenty other contracts were before the CAC at the June 29, 2016, meeting at which the Astaldi award in this case was approved. As noted at Finding of Fact 2, supra, Contract T7380 included 666 line items. Six companies submitted bids, meaning there were a total of 3,996 line items in this single contract. Assuming that the 200 to 300 other projects let by the Department’s Tallahassee office contain similar numbers, there are more than one million line items bid in any given year. If Prince’s reading of the bid specifications is correct, the Department is required to examine each of these line items and somehow make a determination whether the item includes all of the bidder’s costs. This problem of determining bidder cost is complicated by the presence of “companion” or “sister” items in bids, i.e., two items that must be considered in tandem to arrive at something like the actual cost of the work. Prince provided an example of such companion items in its analysis of the bids in this project. Two bid items included in the structures section of the bid proposal form were concrete culverts and reinforcing steel. The contractor may cast the culverts in place at the worksite or purchase them precast. If the concrete culvert is cast in place at the worksite, then reinforcing steel must be used to strengthen the culvert. If the concrete culvert is precast by a materials supplier, then the reinforcing steel has already been incorporated into the culvert at the time of installation. Mr. Calandros explained that when a contractor uses precast culverts, there is no need to list a separate additional cost for reinforcing steel; all costs are captured in the line item for concrete culverts. In this bid, Prince used precast culverts and therefore bid a penny per unit for reinforcing steel.6/ Bidders who cast the culverts in place showed a much higher cost for reinforcing steel but a lower cost for the concrete culverts. When the “companion items” were considered in tandem, the total cost for each vendor was fairly consistent. Prince’s explanation for companion items was coherent but did not explain how the Department is supposed to know which items are companion items as it undertakes the line-by-line cost examination of each bid in accordance with Prince’s reading of the bid specifications. Prince also failed to provide an explanation as to how the Department is to determine a bidder’s costs for any one line item or, for that matter, for its overall bid on a project. Bidders consider their cost information and the processes by which they build bids to be confidential proprietary information. In the instant case, Prince disclosed its own information (aside from materials costs) only under seal during litigation. In its ordinary course of business, the Department does not have access to this information. In fact, as noted at Finding of Fact 23, supra, the Department does not compare bids by component. It looks only at the total bid amount in determining the lowest bidder. Standard Specifications Article 3-8 reserves to the Department the right to perform an audit of the contractor’s records pertaining to the project upon execution of the contract. No authorization is provided to audit records of bidders prior to contracting. Standard Specifications Subarticle 2-5.1 allows bidders to indicate “free” or “$.00” for items that will be supplied at no cost to the Department. Though the Department’s practice, according to Mr. Autry, is to include zero bid items on the Notice to Contractor for confirmation of the price, subarticle 2-5.1 requires no Department investigation as to whether the bidder’s cost for a zero bid is actually zero. Bidders often bid a penny on items, as Prince did on reinforcing steel in this case. Standard Specifications Article 3-5 requires all contracts to be secured by a surety bond such that, in the event of a default by the contractor, the surety company will indemnify the Department on all claims and performance issues. Standard Specifications Section 4 provides that the scope of work is to be determined within the contract, including the furnishing of all labor, materials, equipment, tools, transportation, and supplies required to complete the work. The Department is authorized to make changes to the scope of work and make equitable adjustments of payments. If necessary, the Department may enter into supplemental agreements for additional or unforeseen work. Prince cautions that these change provisions could become relevant because Astaldi’s bid contains no information explaining how Astaldi will cover the $4.75 million difference between its bid price and its actual cost to perform the contract. Prince accurately states that nothing in Astaldi’s bid demonstrates that it has cash reserves to cover the loss and still complete the entire scope of the work.7/ Prince contends that this lack of demonstrable reserves renders Astaldi nonresponsible as to this project. Prince argues that it is error for the Department to rely on Astaldi’s certificate of qualification as proof of the company’s responsibility. The certificate of qualification process considers a contractor’s financial status at the time it submits its financial statements and other information regarding company resources. Prince contends that the Department’s assessment of the contractor’s financial statements and issuance of a certificate of qualification is insufficient to determine the contractor’s responsibility on a given bid. Prince argues that the Department is required by its governing statutes and the Standard Specifications to award a particular contract to the particular bidder that is the lowest, responsive, and responsible bidder, and that “responsible” for a given project is not synonymous with “prequalified.” Prince hypothesizes that under the Department’s practice, a bidder could possess a certificate of qualification issued in January, be indicted in another state for fraud and bribery in February, submit the lowest bid for a Department project in March, and be awarded the contract. By relying solely on the bidder’s certificate of qualification to determine responsibility, the Department could award a contract to a nonresponsible bidder. Section 337.14 provides that any person desiring to bid on any construction contract in excess of $250,000 must first be certified by the Department. Mr. Autry explained that the Department prequalifies contractors to submit bids on certain types of contract, such as major bridges and structures. Contractors applying for certification are required to submit their latest annual financial statements. The Department is charged with reviewing applications to determine “whether the applicant is competent, is responsible, and possesses the necessary financial resources to perform the desired work.” § 337.14(3), Fla. Stat. The Department assigns the contractor work classes and a total capacity after evaluating its experience and financials. The Department’s certificate is good for 18 months, though the contractor’s capacity is reviewed annually. At the time of a particular bid, the Department verifies the contractor’s available capacity, which is simply its total assigned capacity minus current work the contractor is performing for the Department. Mr. Autry testified that the Department does not go back and look at a bidder’s financials to determine whether it can sustain a loss on a given project. The Department does not repeat its capacity analysis during the year, regardless of how many projects the company bids on. The Department’s analysis is limited to whether the company’s current capacity is sufficient for the project on which it is bidding.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Transportation enter a final order dismissing Prince Contracting, LLC’s, second amended formal written protest and awarding Contract T7380 to Astaldi Construction Corporation. DONE AND ENTERED this 22nd day of December, 2016, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of December, 2016.
Findings Of Fact The Department issued an invitation to bid (ITB) and solicited bids for district-wide miscellaneous property management maintenance services pursuant to ITB-DOT-94-95-4004. Kemp Services, Inc. (Kemp), submitted the lowest bid for the subject ITB. Petitioner, Urban Group, Inc., submitted the second lowest bid for the subject ITB. Section 1.1 of the ITB provided: Invitation The State of Florida Department of Transport- ation requests written bids from qualified firms to MAINTAIN RIGHT-OF-WAY STRUCTURES AND VACANT LOTS BY PROVIDING CLEAN-UP SERVICES, LAWN SERVICES, LANDSCAPE SERVICES, SECURING OF BUILDINGS, AND OTHER MISCELLANEOUS HANDYMAN AND SKILLED LABOR SERVICES. ALSO PROVIDE SERVICES FOR SIGN REMOVAL FOR STRUCTURES ILLEGALLY ON THE DEPARTMENT'S RIGHT-OF-WAY OR ILLEGALLY ON PRIVATE PROPERTY IN THE FOLLOWING FIVE COUNTY AREA: BROWARD, MARTIN, PALM BEACH, ST. LUCIE AND INDIAN RIVER COUNTIES. For the purpose of this document, the term "bidder" means the prime Consultant acting for itself and those individuals, partnerships, firms, or corporations comprising the bidder's team by joint venture or subcontract. The term "bid package" means the complete response of the bidder to the Invitation To Bid, including properly completed forms and supporting documentation. [Emphasis in text.] The services were to be provided on an as-needed basis for the term of the agreement, two years. Section 1.7.1 of the ITB provided: Qualifications 1.7.1 Bidders must meet the following minimum qualifications: BIDDERS MUST HAVE AT LEAST TWO YEARS EXPERIENCE PROVIDING AT LEAST TWO (2) OF THE SIX SERVICES OUTLINED IN THE SCOPE OF SERVICES IN EXHIBIT "A". BIDDERS MUST HAVE BEEN IN CONTINUOUS BUSINESS FOR THE PAST TWO (2) YEARS AND COMPLETE FORM "F" WITH THE INFORMATION REQUESTED REGARDING WORK EXPERIENCE AND REFERENCES. ALL REFERENCES WILL BE CHECKED. FAILURE TO PROVIDE FORM "F" AND THE WORK EXPERIENCE REQUESTED WILL CONSTITUTE A NON- RESPONSIVE BID. [Emphasis in text.] Section 1.7.4 of the ITB provided: Qualifications of Key Personnel Those individuals who will be directly involved in the project must have demonstrated experience in the areas delineated in the scope of work. Individuals whose qualifications are presented will be committed to the project for its duration unless otherwise accepted by the Department's Contract Manager. Where State of Florida registration or certification is deemed appropriate, a copy of the registration or certificate should be included in the bid package. Section 1.7.5 of the ITB provided: Authorizations and Licenses The Consultant must be authorized to do business in the State of Florida. Such authorization and/or licenses should be obtained by the bid due date and time, but in any case, will be required prior to award of the contract. For corporate authorization, contact: Florida Department of State Division of Corporations The Capitol Building Tallahassee, Florida 32399 (904)487-6052 Other than the provisions above, no other licensure or authorization to do business was required by the ITB. Section 1.8.2 of the ITB provided: Responsiveness of Bids All bids must be in writing. A responsive bid is an offer to perform the scope of services called for in this Invitation to Bid. Bids found to be non-responsive shall not be considered. Bids may be rejected if found to be irregular or not in conformance with the requirements and instructions herein contained. A bid may be found to be irregular or non-responsive by reasons, including, but not limited to, failure to utilize or complete prescribed forms, conditional bids, incomplete bids, indefinite or ambiguous bids, improper undated or unsealed signatures (where applicable). Section 1.8.4 of the ITB provided: Other Conditions Other conditions which may cause rejection of bids include evidence of collusion among bidders, obvious lack of experience or expertise to perform the required work, or failure to perform or meet financial obligations on previous contracts, or in the event an individual, firm, partnership, or corporation is on the United States Comptroller General's List of Ineligible Contractors for Federally Financed or Assisted Projects. Bids will be rejected if not delivered or received on or before the date and time specified as the due date for submission. Section 1.8.5 of the ITB provided: Waivers The Department may waive minor informalities or irregularities in bids received where such is merely a matter of form and not substance, and the correction or waiver of which is not prejudicial to other bidders. Minor irregular- ities are defined as those that will not have an adverse effect on the Department's interest and will not affect the price of the Bids by giving a bidder an advantage or benefit not enjoyed by other bidders. Section 1.18.1 of the ITB provided: Award of the Contract The Department intends to award a contract to the responsible and responsive bidder who bids the lowest cost as identified in Form "C", Bid Blank, attached hereto and made a part hereof. The ITB did not specify a minimum number of employees, vehicles or hours of service for a bidder to be deemed responsible or responsive. At all times material to this case, Kemp has been in continuous business for the past two (2) years, and completed form "F" with the information requested regarding work experience and references. The Department's agent, Mr. Gentile, checked with two of the references listed by Kemp to verify information relative to this bid requirement. At all times material to this case, Kemp had at least two years experience providing at least two (2) of the six services outlined in the scope of services. The Department's agent, Mr. Gentile, checked with two of the references listed by Kemp to verify information relative to this bid requirement. While Mr. Gentile was authorized to check with all references listed by Kemp, the failure to do so does not discount the information obtained from the sources that were checked. Kemp had an appropriate occupational license to perform work in the tricounty area, but did not have occupational licenses with the City of Hollywood or Broward County. At all times material to this case, Kemp maintained a warehouse to secure the equipment to be used such as lawnmowers, trimmers, and cleaning supplies/equipment. After the bid protest was filed, the Department verified that Kemp had used the warehouse as it claimed. No evidence to the contrary was presented. The mailing address Kemp listed on the first page of its bid response was 8637 S. Sutton Drive, Miramar, Florida. Mr. Faluade resides at that address. He listed that address for mail purposes. The business address for Kemp listed on the bid response was 6200 Johnson Street, Miramar, Florida. This address is a store-front facility with limited office equipment and furniture. Kemp maintains an office at this location but stores its equipment elsewhere as noted above. Kemp was the lowest responsive, responsible bid for ITB-DOT-94-95- 4004.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Transportation enter a final order dismissing Petitioner's challenge to the award of ITB-DOT-94-95-4004 to Kemp Services, Inc. DONE AND RECOMMENDED this 14th day of February, 1995, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of February, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-5967 Rulings on the proposed findings of fact submitted by the Petitioner: Paragraphs 1 through 4, 6, and 8 are accepted. With regard to paragraphs 5, 7, and 16 noting that the additional emphasis is not in the text and that the citations are incomplete (and perhaps misleading), they are accepted. Paragraph 9 is rejected as contrary to the weight of credible evidence. Paragraph 10 is rejected as contrary to the weight of credible evidence. Paragraph 11 is rejected as incomplete, and therefore, misleading. Corporate documents may have been filed on that date, however, the weight of the credible evidence established that Kemp had been in business the requisite amount of time. Paragraph 12 is rejected as incomplete, and therefore, misleading. The business conducted by the Kemp personnel continued regardless of the business entity structure that was used. Paragraph 13 is rejected as contrary to the weight of credible evidence. Paragraph 14 is rejected as contrary to the weight of credible evidence or irrelevant. Paragraph 15 is rejected as contrary to the weight of credible evidence. Paragraph 16 is rejected as contrary to the weight of credible evidence. Moreover, no credible evidence was presented to establish that Kemp did not provide services as described in the ITB or that it was not in business the requisite time. Paragraph 17 is rejected as incomplete, and therefore, misleading. The mailing address listed by Kemp was a residential address. Paragraph 18 is rejected as irrelevant. Paragraph 19 is rejected as contrary to the weight of credible evidence. Paragraph 20 is rejected as irrelevant. Kemp probably does not have a Leon County occupational license either. It did have an appropriate occupational license at all times material to this case. Rulings on the proposed findings of fact submitted by the Respondent: 1. Paragraphs 1 through 29 are accepted. COPIES FURNISHED: Thomas H. Duffy Assistant General Counsel Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0450 Mitchell B. Polay Mark H. Klein 750 S.E. Third Avenue Suite 205 Fort Lauderdale, Florida 33316 Thornton J. Williams General Counsel Department of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450
Findings Of Fact In order to meet its need for new equipment in the new district administration building, the School Board advertised for competitive bid proposals for clerical, professional task, guest and conference chairs (task seating). Five bids were timely received by the School Board, two of which were determined to be responsive. The bid opening occurred on April 17 1990, and the Knoll Source was determined to be the lowest responsive bidder. In spite of this determination, the bid was rejected by the Director of Purchasing or the appointed designee because sales tax was not included in the bid. The Notice of Award was issued to Haworth, who submitted its bid showing the price it was willing to accept for the sale of the task seating, with and without sales tax. The initial decision to reject the Knoll Source bid, which was $10,393.72 less than Haworth in Sequence I; $12,231.94 less in Sequence II; and $994.17 less in Sequence III, was based upon Section 9.2.2.a in the "Instructions to Interior Bidders". This section of the bid documents provided that the contract for purchase of the task seating would not be exempt from sales tax. This bid specification is incorrect because the School Board does not pay sales tax on acquisitions of furnishings for the Pinellas County School System. Knoll Source was aware of the School Board's sales tax exemption prior to its bid submission. As Section 9.2.2.a of the instructions was inappropriate, the vendor relied on Section 9.2.2.c, and excluded sales tax from the bid because the cost of such tax was not applicable. Section 9.2.2.c instructed bidders to exclude inapplicable taxes from their bids. Pursuant to Section 5.3.1 of the bid instructions, the School Board has the right to waive any irregularity in any bid received and to accept the bid which, in the Board's judgment, is in its own best interest. The Knoll Source and Haworth bids can be comparatively reviewed, and Knoll Source is the lowest responsive bidder if the failure to include sales tax in the bid amount is waived by the School Board. It is in the Board's best interest to waive Knoll Source's failure to include a sales tax in the bid because sales tax does not apply to this purchase.
Findings Of Fact Respondent issued a Call For Bids, in Florida Administrative Weekly, Volume 15, No. 38, September 22, 1989, for a construction project referred to as the Reitz Union Addition, BR-116, University of Florida. The Call For Bids provided that at least 15 percent of the project contract amount would be expended with minority business enterprises certified by the Florida Department of General Services as set forth under the Florida Small and Minority Business Assistance Act, Chapter 287, Florida Statutes. If 15 percent were not obtainable, the State University System would recognize good faith efforts by the bidder. The Call For Bids provided that all bidders must be qualified at the time of their Bid Proposal in accordance with the Instructions to Bidders, Article B-2. The Instructions to Bidders, Article B-2, provides in pertinent part that in order to be eligible to submit a Bid Proposal, a bidder must meet any special requirements set forth in the Special Conditions of the Project Manual. The Project Manual Index provides that "L-Special Conditions" pages are numbered separately. The Project Manual, Instructions to Bidders B-23, as revised by Section L, Special Conditions, Supplement #1, at supplement page 2, provides that the contract will be awarded by Respondent for projects of $500,000 or more, to the lowest qualified bidder, provided it is in the best interest of the Respondent to accept it. The award of the contract is subject to the provisions of Section 237.0945, Florida Statutes, and the demonstration of "good faith effort" by any bidder whose Bid Proposal proposes less than 15 percent participation in the contract by MBEs. Demonstrated good faith effort as set forth in the Special Conditions would be in lieu of all or part of the 15 percent requirement. The contract award will be made to the bidder that submits the lowest responsive aggregate bid within the preestablished construction budget. The aggregate bid shall consist of the base bid plus accepted additive alternate bids, or less accepted deductive alternate bids, applied in the numerical order in which they are listed on the bid form. The Project Manual, Instructions to Bidders, B-25 at page 17, provides that the Respondent/Owner has adopted a program for the involvement of minority business enterprises in the construction program. The application of that program is set forth in the Special Conditions of the Project Manual. The Project Manual, Instructions to Bidders, B-26 at page 17, provides that bidders shall be thoroughly familiar with the Special Conditions and shall strictly adhere to their requirements. A representative from D.E. Wallace Construction Corp., Ms. Betsy Wallace, attended the pre-solicitation/pre-bid meeting on October 5, 1989. One of the purposes of the pre-solicitation/pre-bid meeting was to explain the MBE program to the general contractors and others in attendance. Mr. Larry Ellis, the minority purchasing coordinator for the University of Florida, provided the contractors with information as to how they could obtain the 15 percent minority participation requirement or how they could satisfy the requirements of the good faith effort. Mr. Ellis informed those in attendance that the listing of subcontractors form required that the bidder reveal the 15 percent MBE participation on the face of the form, that such form was located in the Special Conditions section, and that the form must be completed and submitted at the time of bid opening, if in fact the general contractor was seeking to show he or she had met the 15 percent participation requirement. Sealed bids for BR-116 were opened on October 19, 1989. Petitioner was the lowest monetary bidder. Anglin Construction Company, Intervenor, was the second lowest monetary bidder. Petitioner was notified by letter dated October 24, 1989, that its bid proposal was found not to be in compliance with the requirements of the Project Manual because an incorrect list of subcontractors form was submitted, that Petitioners proposed MBEs were not identified at the time of bid opening, and that Petitioner failed to show a good faith effort in meeting the 15 percent MBE participation. By letter dated October 30, 1989, the University of Florida recommended to the Respondent that the construction contract for BR-116 be awarded to the Intervenor for the base bid and alternates 1 through 9 in the amount of $991,272 The Project Manual for BR-116 contains Section L, Special Conditions, which contains Supplement 1, with pages numbered supplemental pages 1 through The Call for Bids provides that bids must be submitted in full and in accordance with the requirements of the drawings and Project Manual. The Project Manual provides that bidders are required to examine carefully the drawings, specifications, and other bidding documents and to inform themselves thoroughly regarding any and all conditions and requirements that may in any manner affect the work. Mr. D.E. Wallace testified that he is a certified general contractor licensed by the State of Florida for 13 years and that as part of his licensing examination he was required to demonstrate proficiency in reading and understanding bidding documents, manuals, instructions, plans, and drawings. Mr. Wallace testified that he skimmed over the Project Manual and the Special Conditions section but that he really did not review them. Petitioner submitted its list of subcontractors on an outdated form, dated January 20, 1988, contained in the Project Manual at Section D, page 21. In Supplement #1 of Section L, Special Conditions, at page 1, of the Project Manual, the bidder is instructed to delete the January 29, 1988, version of the subcontractors form and substitute in lieu thereof the List of Subcontractors form included in the Supplement dated June 15, 1988. The form was revised to allow contractors who could not meet the MBE requirements to show good faith effort in obtaining participation, to restrict MBEs, to those certified by the Florida Department of General Service, and to eliminate any bid shopping attempts by requiring that contractors reveal their MBE participation at the timed of the bid opening. Petitioner admitted that the wrong list of subcontractors form was used when its bid was submitted. The Respondents Project Manual contains a licensed version of a standard American Institute of Architects (AIA) document which could not be revised without AIA permission. The revised list of subcontractors form and revised MBE requirements were placed within the Special Conditions section of the Project Manual, which did not require AIAs permission. It is not unusual, in the construction industry, have supplemental or special conditions within a project manual. The construction budget for this project was $1,096,800. Petitioner did not submit its MBE subcontractors at the time of bid opening. Petitioner submitted its MBE plan on October 26, 1989, seven days after bid opening. Petitioners MBE subcontractor participation was less than 15 percent of the contract sum required for BR-116. The contract sum is comprised of the base bid and the alternates for the project.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Board of Regents enter a Final Order rejecting Wallace Construction Corporations bid for project BR-116, denying the protest, and awarding the contract for project BR-116 to Anglin Construction Company. DONE and ENTERED this 26th day of February, 1990, in Tallahassee, Florida. DIANE K. KIESLING Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of February, 1990. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 89-6844BID The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, D.E. Wallace Construction Corp. Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 6(7). Proposed findings of fact 1, 3-5, 7, and 8 are subordinate to the facts actually found in this Recommended Order. Proposed findings of fact 2 and 9 are unsupported by the competent substantial evidence. Specific Rulings on Proposed Findings of Fact Submitted by Respondent, Florida Board of Regents 1. Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1-16(1-16). Specific Rulings on Proposed Findings of Fact Submitted by Intervenor, Anglin Construction Company Each of the following proposed findings of fact is adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding Of Fact which so adopts the proposed finding of fact: 2(6); 5,(8); and 6(16). Proposed findings of fact 1, 3, and 4 are subordinate to the facts actually found in this Recommended Order. COPIES FURNISHED: Gary Moody Attorney at Law Post Office Drawer 2759 Gainesville, Florida 32602 Jane Mostoller Assistant General Counsel Gregg A. Gleason General Counsel Florida Board of Regents 325 West Gaines Street, Suite 1522 Tallahassee, Florida 32399-1950 Raymond M. Ivey Attorney at Law 703 North Main Street, Suite A Gainesville, Florida 32601 Chancellor Charles B. Reed State University System of Florida 107 West Gaines Street Tallahassee, Florida 32399-1950 =================================================================
Findings Of Fact On May 19, 1983, Respondent mailed official Invitations to Bid (IFB) forms to 18 different firms, including Petitioner, soliciting bids for Class VI printing in accordance with the specifications and conditions attached to the letter, signed by R. E. Read, Jr. This letter contained the comment, "As the best interests of the State may require, the right is reserved to reject any and all bids and to waive any irregularities in bids received." This letter also advised prospective bidders who had questions regarding the IFB to call Larry Amison, the individual who had drafted the accompanying specifications. The notice of IFB, published in the Tallahassee Democrat on Thursday, May 19, 1983, also contained a notice of reservation of the right to reject all bids. Only five IFB forms were returned. Three of the five were returned without bids for various reasons, such as "Not Competitive," "Unable to meet specified delivery date" and "Cannot schedule job of this proportion at this time." This type of explanation, in government procurement circles, need not be taken at face value, but is often used to signal the recipient's thanks for the invitation to bid and a desire to be invited to bid again at some time in the future. The other two forms received were bids: one from Zenith Communications Group, and one from Petitioner. This procurement was somewhat unusual in that the IFB stipulated the amount of money the agency had to spend and requested a hid as to the most product it could get for that money. There were two publications involved: "A" and "B." An alternative was given on delivery date options: one within 30 working days of receipt of approved proofs, and one within 45. Zenith offered to provide 7,180 copies of Book "A" and 7,155 copies of Book "B" (14,335 total books) for a total price of $53,400 1/ within 30 working days. Petitioner offered to provide 9,473 copies of Book "A" and 4,950 copies of Book "B" (15,423 total books) for a total price of $53,344.64 within 45 days. The bids were opened on June 1, 1983, and published from June 1 through June 10, 1983. They were brought to the Director for consideration upon opening. It is his responsibility to evaluate the bids and make a recommendation to the Commissioner of Agriculture on the successful low bidder. Since there was only one bid on each delivery date, the Director felt there were not two comparative bids. As a result, he forwarded the bid package to Ms. Grace Harrison, a purchasing agent with the Department of Agriculture and Consumer Services and an individual very familiar with the procurement of printing services. After a review of the entire bid package, Ms. Harrison's studied opinion was that there were two valid bids and Douglas was the low bidder, and it is so found. Ms. Harrison also felt it was unusual not to receive any more responses than were received on a procurement of this magnitude. This same opinion is held by Mr. Amison, who drafted the specifications. Others have differing opinions, however. Whether it was unusual or not, however, is immaterial. There were two valid bids, and only two are required for an award. However, even in the case of two bids, the agency reserved the right to reject any and all bids. As a result, on or about June 6, 1983, the Director decided, based on his understanding of state policy on the matter and in light of the size of the procurement, to seek more bids through rebidding. In this case, the Director felt more bids were available because of the responses of the nonbidders which referred to the response times being so short. Therefore, he directed a rebid, and this information was communicated to all bidders, including Petitioner. On June 7, 1983, Petitioner wrote to the Director, disagreeing with his decision and notifying him of its protest. On the following day, the Director notified Petitioner the rebidding was being delayed, giving Petitioner 10 days to file a formal notice of protest. This was done in a timely manner. The phrase regarding the agency's right to reject bids is contained in every State IFB. Its purpose is to permit state agencies to reject bids where it becomes apparent there is a valid and legitimate benefit to be gained by the agency in doing so. One such situation is when, in the bona fide opinion of the agency, there are insufficient bids. While there is a difference of opinion as to whether only two bids are unusual in a procurement of this nature, there is no dispute that it would have been beneficial to the agency to have received more than two, since more bids would increase competition. To rebid the contract at this juncture would undoubtedly increase competition to the potential benefit of the Respondent. However, Petitioner claims it would also work to its detriment because other potential bidders would have access to the details of the two present bids and would thereby gain an advantage. This may be the result of rebidding.
Recommendation In light of the foregoing, it is RECOMMENDED: That Petitioner, Douglas Printing Company, Inc., be awarded Contract DOF- ADM-79. RECOMMENDED this 8th day of September, 1983, in Tallahassee, Florida. ARNOLD H. POLLOCK, 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 8th day of September, 1983.
The Issue Whether the Barton-Malow Southern, Inc., deviated from the bid requirements, and if so, whether such deviation consists of a minor deviation which may be waived by the respondent, or whether Ron A. Royal, Inc., should be awarded the elementary school "C" project as the lowest responsive bidder.
Findings Of Fact On April 20, April 27, and May 4, 1986, the Board advertised its Notice of Call for Sealed Bids, soliciting bids for the construction of Elementary School "C". The notice advised that the contract to be awarded would require approval of subcontractors by the Board and stated that the Board "reserves the right to reject any and all bids received and to waive any and all informalities in regard thereto." A pre-bid conference was held on May 15, 1986, at which time the potential bidders were advised that page 14 of the bid documents entitled "List of Subcontractors" would be deleted and addendum #1 would include a more specific list of subcontractors to be completed by the bidder. The original list of subcontractors stated: The undersigned, hereinafter called "Bidder", list below the names of all the subcontractors who will perform under the Bidder. Any work item (Trade) not included will be assumed by the owner as being performed by the Bidder's own forces." A space was provided for the bidder to state the work item and the name of the subcontractor who would perform the work. Addendum #1 instructed the bidders to delete the original page C.14 and insert the enclosed sheet C.14 (addendum #1) "List of Subcontractors" for submission with the sealed bids. The substituted list of subcontractors provided as follows: The undersigned, hereinafter called "Bidder", lists below the names of the subcontractors who will perform under the Bidder. In the event the general contractor will perform one of the phases listed with his own personnel, he shall state by "general contractor". The form listed 20 specific areas of work, such as site work, iron and steel work, roof decks, and electrical, and provided a space for the bidder to fill in the firm name and address of the subcontractor for each specific area. Bids were submitted to the Board by nine (9) general contractors. The lowest bid by $310,000, was submitted by Barton-Malow; the second lowest bid was submitted by Royal. On the list of contractors submitted with Barton Malow's bid, Barton- Malow listed "G.C". (General Contractor) for the work areas described as site work, concrete work, masonry work iron and steel work, and lathing and plastering. Barton-Malow listed a subcontractor and "G.C." for phases described as hard tile and electrical. For the work areas described as "roof decks" and "roofing and sheet metal" three (3) subcontractors were listed for each of the areas. The list submitted by Royal with its bid provided that the concrete work would be performed by the general contractor and listed a single subcontractor for each of the other 19 areas of work specified. Barton-Malow was the only bidder who listed multiple subcontractors for a specified work area. In the blanks provided for the subcontractors' addresses, Royal listed the city where each subcontractor was located; Barton-Malow did not provide any addresses bout stated at the top of the column "will be advised upon request." None of the bidders provided street addresses for the subcontractors, however, only one bidder other than Barton Malow failed to provide the city in which the subcontractor was located. Immediately after the bids were opened and read, 1/ the meeting was adjourned and Mr. Derryberry, Mr. Collins, and two other people reviewed the bids. Mr. Derryberry concluded that the Barton-Malow bid was not in compliance with the bid requirements due to the manner in which Barton-Malow had filled out the subcontractor list. Mr. Derryberry therefore recommended to the Board that the Barton-Malow bid be rejected because of the perceived irregularities and the bid of Royal be accepted. The recommendation of the architect was adopted as the recommendation of the school administration and presented to the Board at a public meeting on June 3, 1986. The Board received the report of the architect and the administration, heard from the attorneys and representatives of Barton- Malow and Royal, and then voted to waive any irregularities and accept the Barton-Malow bid. The original page C.14 was approved by the Board in about 1980 and used since that time. However, there had been some difficulty with that form on two different jobs within the last six months, and therefore it was decided to clarify the purpose of the form by specifically listing all the major subcontracting areas. The intent was to require all bidders to list the primary subcontractor in each of the major work areas, and thus prevent bid shopping after the bids were opened. The architect, Mr. Derryberry, prepared and included the amended form C.14 as part of Addendum #1 to the bid documents. Although the Board never formally approved the amended form, Mr. Derryberry had the authority to clarify any of the bid documents by addendum. Page C.14 (Addendum #1) lists 20 major subcontracting areas; however, in almost all of the areas it would be possible for more than one subcontractor to perform the designated work, and in several areas it would be unlikely that one subcontractor would perform all the required work. For example, site work includes paving, earth moving, culvert work, fencing, and irrigation, and one subcontractor would not normally do the work in all those areas. The amended page C.14 does not state that only one subcontractor should be listed for each specified work area. The bidders were not advised at the pre-bid conferences or subsequent thereto, that only one subcontractor should be listed in each category. The only information the bidders received regarding the list of subcontractors was the information contained on the revised page C.14. In other words, the bidders were simply directed to list "the names of the subcontractors who will perform under the Bidder", and to list general contractor when "the general contractor will perform one of the phases listed with his own personnel." In the subcontractor list submitted with their bid, Barton-Malow listed "Batten Electric Co./G.C." for the subcontract "Electrical", and listed "Bauer & Assoc./G.C." for the "Hard Tile" subcontract. The listing of a subcontractor and the general contractor in these areas is not a deviation from the bid requirements. There is no indication on the list submitted by Barton- Malow that the listing of a subcontractor and the general contractor in the hard tile and electrical categories meant anything other than both the subcontractor and the general contractor would perform the work required in those areas, and there was no evidence presented at the hearing that would require a different conclusion. 2/ Categories 5 and 6 on the subcontractor list are "roof decks" and "roofing and sheet metal." Although listed as two separate categories, the same subcontractor would have to perform both due to the bid requirements. Further only one subcontractor can perform the roofing work; it is not an area that is divisible into subcategories that can be performed by different subcontractors. For categories 5 and 6, Barton-Malow listed "H. H. Robertson/Architectural Exteriors/Commercial Roof Decks." As admitted by Barton-Malow, that all three subcontractors "will perform" the subcontract is an impossibility. 3/ From the list submitted by Barton-Malow it cannot be determined who will perform and be responsible for the roofing work. When asked at the hearing who was going to perform the roofing work for Barton Malow, the vice-president of operations for Barton-Malow responded, "One of those three would have done it." He indicated that a submission would have been made to the Board designating the subcontractor. By listing three subcontractors for the two roofing categories, Barton-Malow deviated from the bid requirements. The subcontractor list contained one basic requirement, that the subcontractors listed "will perform." By listing three subcontractors for the roofing, when only one subcontractor could performs Barton-Malow would be able to bid shop for subcontractors after the bid submission. This would give Barton Malow a definite advantage over the other bidders who complied with the bid requirements and listed only the one contractor who would perform the work. The other bidders would be bound to use the subcontractor listed and therefore, would be unable to negotiate for a better price after obtaining the contract. However, by listing multiple subcontractors, Barton-Malow would be able to negotiate for a better price because it had not committed itself to any one subcontractor. In five categories, site work, concrete work, masonry work, iron and steel work, and lathing and plastering, Barton Malow listed general contractor. About an hour after bid opening, Mr. Derryberry called Mr. Polso, the Vice- President of Operations for Barton-Malow, to inquire about the bid because it was so much lower than the other bids. Mr. Polso assured Mr. Derryberry that there had been no mistake in the amount bid. Mr. Derryberry then asked about the listing of general contractor for the iron and steel work because he had never known of a general contractor doing that type of work. Mr. Polso stated that he had not had time to determine the low bidder in that category and was still getting prices. He also said that Barton-Malow would not be doing the lathing and plastering. However, when Mr. Derryberry advised that he was recommending that the bid be disqualified due to the incompleteness of the subcontractors form and asked whether Barton-Malow wished to withdraw its bid, Mr. Polso stated that Barton-Malow had no intention of withdrawing its bid. Subsequently, Mr. Polso met with Mr. Derryberry and Mr. Collins at the school offices and advised them that Barton-Malow had every intention of performing the work where general contractor had been listed. Barton-Malow is a wholly owned subsidiary of Barton Malow Company and has the resources of Barton-Malow Company available when necessary. In 1985, Barton-Malow did between 60 and 70 million dollars of construction work; Barton- Malow Company had a dollar volume of 600 million dollars. Barton-Malow has the capacity to perform work in the areas where it listed general contractor. Barton-Malow prepares its bid by estimating the value of the total project and the value of the majority of the specific trades involved. If Barton-Malow does not receive a bid from a subcontractor that it feels is competitive in a particular trade area, it performs that work itself. The C.14 (Addendum #1) form permitted a bidder to list "general contractor" in any or all subcontract areas in which it would perform the work with its own personnel. Once the bids are opened, the bidder cannot unilaterally substitute a subcontractor for the general contractor. The general contractor would be required to do the work unless it received authorization to substitute a subcontractor based upon a showing of good cause. The evidence does not support a finding that Barton-Malow was incapable of performing the work in the areas in which it listed "general contractor." Therefore Barton- Malow did not deviate from the bid requirements by listing "general contractor" in five of the twenty specified areas. Although Baron-Malow deviated from the bid requirements by failing to list any addresses on its subcontractor list, this was a minor irregularity which did not give Barton-Malow any competitive advantage over the other bidders. In Division C, Article 5, Section 5.3.1., the bid documents provide: It is the intent of the owner to award a Contract to the lowest responsible Bidder provided the Bid has been submitted in accordance with the requirements of the Bidding Documents....The Owner shall have the right to waive any informality or irregularity in any Bid or Bids received and accept the Bid or Bids which in his judgment, is in his own best interests.
Findings Of Fact This case concerns what is called a "turnkey lease." The program was developed by the State of Florida in 1971. It encompasses a situation whereby agencies seeking space for their operation may, after a specific need is determined that cannot be filled by existing adequate space, solicit competitive bids from developers for the provision of land and the construction of a building there sufficient to meet the agency's needs, for lease specifically to the agency requesting it. The Bureau of Property Management within DGS was given the initial responsibility to develop the guidelines, promulgate the rules, and seek statutory authority for such a program. The Bureau's current role is to work with agencies requesting this program. The agency certifies the need to the Bureau, in addition to the fact that there is no available existing space present. The Bureau then determines agency needs and gives the agency the authority to solicit the bids for the turnkey project. Once the bids have been solicited and the preproposal conferences have been held, the bids are then received, evaluated, and a recommendation for an award is forwarded by the agency to the Department of General Services. DGS reviews the supporting documents required by the provisions of the Florida Administrative Code and either concurs or does not concur in the recommendation. If DGS concurs, the submitting agency is notified and is permitted to then secure the lease. Once the lease has been entered into, it is then sent back to DGS for review and approval, as to the conditions, and thereafter the plans and specifications for the building are also referred to DGS for review and approval as to the quality and adequacy of the plans and specifications and code compliance. Section 255.249 and Section 255.25, Florida Statutes, sets forth the requirement for soliciting and awarding bids for lease space in an amount in excess of 2500 square feet. This provision requires that an award of this nature be made to the lowest and best bidder, and DGS subscribes to that standard in evaluating and determining whether or not it will concur with an agency's recommendation. In the instant case, DHRS advertised for bids for the construction of office space in Palatka, Florida for its District III facilities. Before seeking to solicit bids, District III staff conducted a search for other possible existing space within a five mile radius of the downtown area and located no adequate facilities. Thereafter, a certification of need was processed for a solicitation of proposals and approval was granted by DGS to follow through with the solicitation. A preproposal conference was advertised and held on October 14, 1983 and after review by those present at the conference, bid opening date was set for November 22, 1983. Thirty-two bid packages were distributed and twelve bidders submitted proposals. The public bid opening was held as scheduled at 2:00 P.M. on November 22, 1983, in Palatka, Florida by Robert E. Litza, Facilities Service Coordinator for DHRS District III. Of the bids submitted by the twelve bidders, the lowest bid was rejected because of the failure of the bidder to comply with the requirements of the bid package. Of the remaining eleven bids, the four lowest were evaluated with the understanding that additional high bids would be evaluated if the four lowest were found to be unacceptable. Among the four bids considered were bids of Chuck Bundschu, Inc.; Kenneth McGunn, the Intervenor (Mr. McGunn submitted five price schedules for his bid and of these only one was considered); Elizabethan Development, Inc.; and TSU. A recommendation by the evaluation committee which met at DHRS District III that Intervenor's bid be selected was forwarded to DGS in Tallahassee through the Director of DHRS's General Services in Tallahassee on December 22, 1983. The terms of the successful bid and the reasons for its being considered lowest and best are discussed below. The successful bid for the lease in question, lease number 590:8030, was, upon completion of the committee's evaluation, also evaluated by Mrs. Goodman in the Bureau of Property Management of DGS. She also considered the McGunn bid as the lowest and best of the eleven non-disqualified bids. In that regard, not only Mr. McGunn's bid but all of the twelve bids received were considered and reviewed not only at the local level but at DHRS and DGS Headquarters as well. In her evaluation of the proposal and the bids, Mrs. Goodman considered the documentation submitted by DHRS. This included a letter of recommendation supported by a synopsis of all proposals, the advertisements for bids, and any information pertinent to the site selection process. The letter from DHRS dated December 22, 1983, which recommended award of the lease to Mr. McGunn, included Mr. Litza's December 21, 1983 analysis and recommendation letter which, itself, was attached to McGunn's primary bid documents. Her analysis did not include a prior award recommendation and analysis from Mr. Litza, dated December 8, 1983. It also did not include the site plan, the floor plan for the proposed building, or a survey of the site, but these areas are considered to be within the discretion of the leasing agency. Their absence is not considered to be particularly significant. In her analysis, Mrs. Goodman found that Petitioner's bid was also responsive. However, comparing it with Mr. McGunn's bid, she and her staff found that the latter was the lowest bid submitted. The determing factor in her decision was cost. In determining that McGunn's bid was the lowest as to cost of all bids, Mrs. Goodman compared the average rate per square foot per year for each. This did not take into consideration proration of costs per year, but strictly the average over the fifteen years of the term of the lease (10 year basic plus 5 year option) . According to Mrs. Goodman, this same method of calculating cost has been used in every lease involving a turnkey situation and in fact in every lease since 1958 - as long as she has been with DGS. This particular method, admittedly, is not set forth in any rule promulgated by DGS. However, the agencies are instructed by DGS to advertise and bidders to bid on an average square foot basis, the basis utilized by Mrs. Goodman and her staff in analyzing the bids submitted. In that regard, the request for proposals does not, itself, indicate how the calculation of lowest cost would be made by DHRS and DGS but it does tell prospective bidders what information to submit. This procedure has been followed exclusively in situations like this for many years and many of the bidders have bid before using this same system. While Mrs. Goodman is not certain whether TSU has ever bid before, using this system, she does not consider it to be unfair because all bidders are considered on the same footing in an evaluation. They are notified of what information to submit and if they do so, their information will be considered along with all other bidders. Further, anyone who inquires as to the basis for evaluation will be given a straight and complete answer as to the method to be used. In the instant case, DHRS followed procedure for solicitation and evaluation utilized in the past and DGS followed its own policy in evaluating the submissions. In short, the primary consideration for DGS is the price factor and all other factors are considered to be within the expertise of the requesting agency. In Mrs. Goodman's opinion, based on the fact that she worked with the Florida Legislature on the development of the controlling statute, and helped develop the existing rule within DGS, that was the intent of the Legislature. Consequently since the statute requires award to the lowest and best bidder, it can be said that in this case the term "lowest" falls within the purview of both DHRS and DGS but "best" is solely within the purview of DHRS. Therefore, utilizing the lowest and best criteria and accepting the fact that the lowest bid may not be the best bid, the determination of "non-best" should be based on the reasonable "end objective" of the agency and need not be based on a criterion which is set forth in the bid proposal. In other words, it is not necessary for the agency to set forth the manner of evaluation it will use or the factors it will consider, according to Mrs. Goodman. With regard to the bid and evaluation committee process, Mr. Litza, the facilities manager for DHRS in Gainesville, was involved in putting together the bid package along with Mr. George Smith from Tallahassee, Litza's predecessor in the job in Gainesville. He worked with Mr. Smith in order to take advantage of Smith's experience in evaluating bids for leases. So far as he knew, the bid package contained minimum standards for all parts of the bid, and the package was, in fact, approved by officials in Tallahassee before being released. While no particular factors were identified to prospective bidders as being significant, Mr. Litza did conduct a bid conference for them prior to the date the bid was due and was available to answer any questions that prospective bidders might have. He did not receive any questions regarding the significance of any particular factor from any bidder. The bids were advertised and when received, were opened and read properly in accordance with the terms of the solicitation. When the bids were received and opened, it was seen that Mr. McGunn had submitted five different bids for the same project. Litza had not been confronted with this situation before and asked Mr. Smith what to do about it. Mr. Smith's reply was to put all five McGunn bids in with the rest and extract the lowest five of all bids. When this was done, Mr. McGunn was shown to have submitted two of the lowest five bids. In determining which were the lowest five bids, Mr. Litza utilized the average cost per square foot formula utilizing therein the entire 15,772 square feet authorized for the project. Once the five lowest bids were determined, Mr. Litza selected an evaluation committee made up of local Palatka DHRS supervisors except for the fiscal member, Mr. Foust, Mrs. Shinholster, Litza's secretary and Litza himself. He gave each of the members a score sheet with point values for each area. Each member filled out the form independently. Though he gave very little briefing to the evaluation committee, he admits that he did, in advance, tell each member that Mr. McGunn was the lowest bidder and should be awarded the highest points for criteria number 1, which related to cost. There were several irregularities in Mr. Litza's processing of the evaluation committee's results. For example, on the evaluation of the file conducted by member Sheryl Dollar, regarding criteria number 2, which relates to the conformity of space offered to the specific requirements contained in the invitation to bid (with a weight of 25 points), Mr. Litza admitted he lowered Mrs. Dollar's point award in that area from 35 to 25 without first checking with her to insure that his action would meet with her approval. While this is irregular, it is of little or no consequence since - the maximum number of points that could be given for that particular item was 25 and Mr. Litza's actions did not reduce that member's award to less than the maximum allowable. He contends that his action was based on what he considered to be a mistake on her part. In another apparent irregularity, Mr. Litza prepared a recommendation letter based on his and the other committee members' evaluation of the files to DHRS Headquarters in Tallahassee on December 8, 1983. In that letter, be indicated that McGunn would provide gas heat for the proposed building for free. Though McGunn had not specifically stated this, he implied it from the energy features paragraph in the Intervenor's bid. On the other hand, the bid by TSU contained an express comment offering to pay the utility charges. This specific provision was overlooked and omitted from the evaluation and report to Tallahassee by Litza, who contends that this omission was merely an oversight. There are other discrepancies as well. In his testimony, Mr. Litza indicated Mr. McGunn proposed to build one building but his letter of December 8th and that of December 21, 1984, both reflect two buildings. Here again, Mr. Litza explains this as the result of his being confused. Nonetheless, this erroneous information was referred to Mrs. Goodman at DGS. This is significant in that at the evaluation committee meeting, when the forms were given out, several of the members expressed a preference for a two-building complex. After the award, Mr. Litza secured agreement from McGunn to build two buildings. Mr. Litza admits that much of this was done in an attempt to insure that McGunn, as the low bidder, got the award. Mr. Litza equated the lowest bid with the best and had Petitioner been the low bidder, he contends he would have done the same thing. In most areas, he would not, however, have given Petitioner's four-building concept a high score because of the increased heat and air requirements of four buildings. Mr. Litza also downgraded Petitioner on that bid criteria which relates to the proximity of offered space to the clients to be served because Petitioner's site, he contends, was too close to the clients to be served. In this case, a housing project for low income families which make up much of the clientele to be served by DHRS, was located across the street from the proposed site offered by the Petitioner. Mr. Litza contends that he was thinking of the potential damage to the building because of increased activity by virtue of the facility being so close. There were other questionable areas in Mr. Litza's testimony. For example, he testified that though Petitioner provided 15 more parking spaces than Intervenor, this would result in mud being tracked in from the adjacent dirt road 200 feet away in greater quantities than in Intervenor's proposal. He also considered positively that the Intervenor's proposed site was closer to a restaurant than that of the Petitioner. Though it was recommended by DHRS Headquarters in Tallahassee that only two of the committee members be from the Palatka office, Mr. Litza disregarded that advice because, he contends, there was a morale factor in that office and the people assigned there wanted to have a part in this decision. Because of this, he allowed Ms. Stouffenberg to put five extra members of her staff on the committee. Nonetheless, the evaluation committee serves only in an advisory capacity. Its recommendation is no more than an advisory opinion. The ultimate decision as to which of the bidders should be awarded the contract is made at DHRS Headquarters in Tallahassee. Ms. Shinholster, a Clerk IV in the DHRS Gainesville office, who works as a secretary to Mr. Litza and several others, was advised she would be on the committee for the evaluation at the same time she was given the bid file. She did not get an opportunity to meet with other committee members to talk about the standards to be used, nor was she given any standards by which to evaluate the files. All she was told by Mr. Litza was that McGunn was the lowest bidder. She cannot explain how she accorded points on her evaluation sheets except that she gave the low bidder the highest number of points. Mr. George Smith, a Senior Analyst with DHRS in Tallahassee, relied on Mr. Litza's input when he made his recommendation to his superiors that the award should be made to McGunn. He also formulated his own opinion, based on his own analysis of the bids. He resolved any dispute regarding cost in favor of Mr. McGunn on the basis of the average rental, and regarding space, in favor of McGunn on the basis of the number of buildings. Dr. Perry, an economist with the University of North Florida, testified to the Federal Government's policy regarding the desirability of using the present value of money methodology and the determination of an acceptable discount rate or index in calculating the actual cost of the bids. Both experts, Dr. Perry and Dr. Scott, who testified for DGS, agree that the present value methodology is valid and presents a more accurate analysis of cost than the average rental cost methodology which does not utilize this theory. The major difference between the two was primarily in the percentage to be utilized in applying the discount rate. Whereas Dr. Perry adopted the Federal policy and suggested a 10 percent discount rate, Dr. Scott testified that a more viable percentage rate in November, 1983, at the time the award was to be made, would have been 3.3 percent. If the 10 percent rate were used, then the Petitioner's bid would be the lowest of all submitted. On the other hand, if the 3.3 percent rate were used, Intervenor's bid would be the lowest. If a different discount rate, that of 5.7 percent were to he used, the bid of Elizabethan Development Corporation would be low. It is at about the 6 percent point and above that Petitioner's bid becomes the lowest. Nonetheless, the State has not adopted the present value of money theory and the policy followed by the State is not to consider that methodology in analyzing costs. State policy is to use only the average rental methodology. There are no written instructions (rules) on evaluating bids for leases of this nature. Oral instructions given by DGS to each agency are that the average rate per square foot is to be computed using, if the square footage is constant, for each year of the lease, the basic square footage requested, multiplied by the rental rate proposed for each year of the basic lease, divided by the number of years. If the square footage is not constant in every year of the lease, evaluators are directed to apply the rate per square foot proposed in each year to the square footage to be utilized in that year, total up the annual rentals, total up the square footage involved, and divide to arrive at the average rate per square foot per year. Utilizing one or the other of those two methods in evaluating both the McGunn and the TSU bids, it becomes clear that the McGunn bid results in an average of $8.86 cost per square foot per year and the TSU bid an average of $9.58 per square foot per year. Recalculation of DHRS' evaluation by DGS showed the DHRS' figures as stated above were correctly arrived at. This procedure is followed on all turnkey and non-turnkey leases in the State of Florida. The reason the State uses this process instead of the present value of money process is because it is easy. DGS statistics indicate that most landlords in the approximately $32,000,000 worth of leases presently existing with the State are "Mom and Pop" landlords. These people are not normally trained lease evaluators. By using the straight average rental rate method, there are no arbitrary variables. It has always worked because people can understand it and all agencies which lease property in the State of Florida follow this procedure. Also, this procedure does not require computer-based calculations, and it does not require economists to work with it. Both latter reasons are amplifications of the first. In Mrs. Goodman's estimation, if the present value of money system were to be adopted, her division would have to hire at least two $30,000 per year economists and buy an in-house computer to operate the system. This additional cost, she believes, would far outweigh the paper savings to be realized by utilizing the present value of money system. As of the hearing date, considering all the factors, in Mrs. Goodman's opinion, DGS would nonetheless still recommend Mr. McGunn's bid as the lowest and best bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore RECOMMENDED that DHRS lease Number 590:8030 be awarded to Kenneth R. McGunn. RECOMMENDED this 5th day of September, 1984, in Tallahassee, Leon County, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1984. COPIES FURNISHED: Donald E. Holmes, Esquire William E. Townsend, Jr., Esquire Post Office Drawer D Palatka, Florida 32078-0019 James A. Sawyer, Jr., Esquire District III Legal Counsel Department of Health and Rehabilitative Services 1000 Northeast 16th Avenue Gainesville, Florida 32609 Stephen J. Kubik, Esquire Department of General Services Room 452, Larson Building Tallahassee, Florida 32301 H. Allen Poll, Esquire 112 South Main Street Gainesville, Florida 32601 Linda C. McGurn, Esquire 1717 Northeast 9th Avenue Gainesville, Florida 32301 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1321 Winewood Boulevard Tallahassee, Florida 32301 Ronald W. Thomas, Executive Director Department of General Services 115 Larson Building Tallahassee, Florida 32301
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: On May 10, 1991, respondent, School Board of Collier County (Board), issued a written invitation to various contractors inviting them to submit proposals for certain construction work to be performed on Naples Park Elementary School in Collier County, Florida. The invitation in question is more specifically identified as Bid No. 120-5/91 Site Development/Naples Park Elementary School. The bidders were advised that their bids must be submitted no later than 2:00 p.m. on June 4, 1991. Bids were timely filed by five contracting firms, including petitioner, A2M2R Construction, Inc. (AMR), and Haas Construction, Inc. (Haas). On June 4, 1991, various school personnel, including Dallas Disney, Board architect, Vicki McKinney, Board assistant director of purchasing, and Pat Humphrey, a Board secretary, and the Board's engineering consultant, Glen Bridges, met for the purpose of opening the sealed bids. They agreed that the five bids would be opened in alphabetical order. This meant that AMR's bid was opened first while Haas' bid was opened fourth. Bridges was assigned the task of opening the bids and reading the dollar amount of each bid. In the case of AMR, it proposed a base bid in the amount of $174,815. When Bridges opened Haas' bid, he said words to the effect that he could not clearly make out the amount of the base bid. This was because the original number had been changed by Haas prior to the submission of its bid, and it could not be clearly read. Accordingly, Bridges handed the proposal to McKinney, who read the number as $146,500. She then handed the bid document to Disney who also concluded the bid was in that amount. At that point, the president of Haas, who was present at the bid opening, was asked if the amount was indeed $146,500. When he confirmed that it was, he was asked to place his initials next to the base bid number. He did so even though paragraph (6)(a) of the Bid Instructions provides that "(a)ny erasures or other corrections in the proposal must be explained or noted over the signature of bidders". According to AMR, this provision required that Haas initial the amount before it sealed and filed its bid. This interpretation of the Bid Instructions was confirmed by Board personnel. Thus, AMR contends that by Haas initialing its bid amount after the bids were opened, Haas violated the Bid Instructions and should have its bid proposal rejected. As it turned out, the bid amount submitted by Haas was the lowest dollar bid on the project, and the Board has proposed to award the contract to Haas. According to the Board's assistant superintendent for business affairs, Robert Wilson, who has supervised hundreds of bid lettings over the last several years, the circumstances in this case were "unusual" in that Haas initialed the bid amount after the bid documents were opened. However, Wilson considered this to be a minor irregularity which, by the terms of the Bid Instructions, could be waived by the Board. Further, he did not find such action to give Haas an undue advantage in the bidding process or place AMR and other bidders at a disadvantage. This was not contradicted. On the bid form used by the bidders, there is a line left blank before the space where the numerical amount of the bid is inserted. AMR contends that the purpose of this space was to be used by a bidder to spell out in words the amount of its bid, and because Haas did not spell out in words the dollar amount of its bid, the proposal should be rejected. However, there is no requirement in the Bid Instructions that the dollar amount be spelled out in words nor was there a school policy imposing such a requirement. Therefore, as to this contention, no irregularity in the bidding process occurred.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered by respondent awarding the contract in question to Haas Construction, Inc. DONE and ENTERED this 19th day of July, 1991, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of July, 1991. APPENDIX TO RECOMMENDED ORDER Respondent: 1-2. Adopted in finding of fact 3. Adopted in finding of fact 2. Adopted in finding of fact 4. 5-7. Adopted in finding of fact 3. Rejected as being unnecessary. Adopted in finding of fact 3. Adopted in finding of fact 4. Adopted in finding of fact 3. COPIES FURNISHED: Mr. James R. Powell, Jr. P. O. Box 150340 Cape Coral, FL 33915 Thomas W. Franchino, Esquire 700 Eleventh Street, South Suite 203 Naples, FL 33940-6777 Dr. Thomas L. Richey, Superintendent Collier County School Board 3710 Estey Avenue Naples, FL 33942
Findings Of Fact Both DOT and Weekley submitted proposed Recommended Orders. Their proposed findings of fact have generally been adopted here but are addressed in detail in Appendix A, attached and incorporated in this Recommended Order. On or before July 31, 1985, DOT received sealed bids from three bidders for State Project Nos. 86070-3492 and 93220-3403, involving landscaping of interchanges in Broward and Palm Beach counties. Marvin's Garden was the apparent low bidder, with a total of $389,112.19 shown on the face sheet of the bid blank form. Weekley was the next lowest bidder with a total of $419,899.56, and P. J. Constructors, Inc., was the highest bidder with a total of $458,805.90. After review of the bid documents for compliance with DOT bid procedures, a discrepancy was found in the Marvin's Garden bid and DOT notified the parties by letter dated August 20, 1985, that Weekley was the apparent low bidder on the project. The discrepancy was found on page 001 of the bid blank form submitted by Marvin's Garden. For item 570-11, "Water for Plant Establishment," under the column, unit price written in words, Marvin's Garden showed "fourteen thousand two hundred eighty two dollars and sixty six cents." The column, unit price in figures, showed "14,282.66," and the final column, headed "amounts" showed "14,282.16." The bid item was supposed to show the unit price for a thousand gallons of water (which price was to be written in both words and figures) and a total, or extension price for 3,743.125 thousand gallons of water. When the unit price on Marvin's Garden's bid was multiplied by 3,743.125 (number of units), the resulting total price for that bid item was $53,461,781.71. This figure was entered on the form in red ink and was initialled by Raymond Patrick Haverty, the DOT reviewer. Marvin's Garden's total bid for the project was then adjusted to $53,836,611.04, a figure far in excess of either Weekley's or P. J. Constructors' bids. Marvin Gross is the individual responsible for preparing and submitting bids for his corporation. He has been doing bid work for DOT for approximately 20 years and is thoroughly familiar with the bid procedures, forms and standard specifications. He attributes the irregularity on his submission to his "tunnel vision." Unit prices are significant because the quantity designated by DOT is merely an approximate, best guess by the Department engineers. For item 570-II, unpredictable weather conditions will ultimately dictate exactly how much water will be necessary to successfully complete the landscape project. That exact quantity times the unit price will be the basis of payment to the contractor. DOT found no violations of bid requirements in the bids of Weekley and P. J. Constructors, Inc., and none have been raised in this proceeding.
Recommendation For the foregoing reasons, a final order should be issued declaring Weekley the lowest responsible bidder on project Nos. 86070-3492 and 93220-3403, and the contract awarded accordingly. DONE and ORDERED this 2nd day of December 1985, in Tallahassee, Florida. Hearings Hearings MARY CLARK, Hearing Officer Division of Administrative The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative this 2nd day of December 1985. APPENDIX In accordance with Section 120.59(2) Florida Statutes, the following are recommended rulings on proposed findings of fact submitted by Respondent and Intervenor in this case. Respondent's Paragraph: Corresponding R. O. Paragraph or basis for rejection: The corporate status and the addresses of the bidders are not material. See Paragraph 1, R.O. See Paragraph 2, R.O. and Conclusion of law 2, R.O. See Paragraph 3, R.O. See Conclusion of law 2, R.O. See Paragraph 3, R.O. See Paragraph 6, R.O. See Paragraph 2, R.O. Intervenor's Paragraph: Corresponding R.O. Paragraph or basis for rejection: See Paragraphs 1 and 2, R.O. Facts which relate to the composition of bid packages are not material. See Paragraph 3, R.O. See Paragraph 3, R.O. See Conclusion of law 2, R.O. See Paragraph 3, R.0. See Conclusion of law 5, R.O., relating to the specifications of the department. The remainder of the paragraph proposed is immaterial. See Paragraph 5, R.O. COPIES FURNISHED: Thomas E. Drawdy, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301 A. J. Spalla, Esquire General Counsel 562 Haydon Burns Bldg. 605 Suwannee Street Tallahassee, Florida 32301 Mr. Marvin Gross, President Marvin's Garden and Landscape Services, Inc. 37 North McIntosh Sarasota, Florida 33582 Mel L. Wilson, Esquire Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32301 Harry R. Detwiler, Jr., Esquire HOLLAND & KNIGHT Post Office Drawer 810 Tallahassee, Florida 32302
