Findings Of Fact Nine bids were received for Contract E4571, Project/Job No. 99004-3516 ("E4571"). Petitioner's bid was timely received. Respondent opened bids on December 13, 1991. Respondent posted its intent to award E4571 to J & D Tropical Landscape Design on December 20, 1991. Section 1.2 of the Bid Specifications for E4571, as modified by the Special Provisions, states: A contractor's bid shall be in the form of a unit price for each unit expected to be accomplished. The Special Provisions to E4571 require each bidder to submit a single unit price for each pay item called for in the Bid Price Proposal. Item 4 in the Special "Provisions provides: It shall be the responsibility of the Contractor to submit to the Department A SINGLE unit price for each pay item called for in the Bid Price Proposal. The Contractor shall be responsible for his/her method of averaging. Failure to comply shall result in the Contractor's Bid Proposal being declared "Irregular" and such Bid Proposals will be rejected. (emphasis added) Petitioner's Bid Proposal was properly declared irregular and rejected by Respondent. Petitioner failed to comply with the requirements of Item 4 in the Special Provisions by failing to submit a single unit price for each pay item, by failing to correctly average a unit price, and by failing to state the unit price in words. The Unit Price Sheet on page 23 of the Bid Proposals contains the following table listing item numbers A582- 2 through A584-4. Petitioner listed item number A583 as follows: ITEM PLAN ITEM DESCRIPTION AND UNIT PRICE $ AMOUNTS NUMBER QUANTITIES UNIT PRICE (IN FIGURES) (Exten- (IN WORDS) sion Price) 3/ A583 4 200.000 TREES (8' TO 20, 85 20400 PLANT ' HEIGHT OR CLEAR TRUNK) @ DOLLARS CENTS The actual extension price 4/ for 200 trees at $85 per unit is $17,000 rather than the $20,400 stated by Petitioner in the table on page 23. The "Contract Total" stated by Petitioner in the bottom right corner of the table is $37,013.20. The "Contract Total" that should have been stated if Petitioner intended the extension price of item number A583-4 to be $17,000 would have been $33,613. The "Contract Total" listed by a bidder on the Unit Price Sheet is the unverified contract price. The actual contract price is determined by Respondent pursuant to the formula given in Section 1.3 of the Bid Specifications. Section 1.3 of the Bid Specifications foil E4571 states: The contract price is defined as the sum of the unit bid price times the planned work for each item as shown on the Unit Price Sheet. Petitioner would have been the lowest successful bidder irrespective of whether Respondent had replaced the extension price for item number A583-4 and the "Contract Total" stated by Petitioner with the actual extension price for item number A583-4 and the actual "Contract Total" . However, Respondent is precluded from doing so by Section 3-1 of the Standard Specifications For Road ,and Bridge Construction ("Standard Specifications"), published by the Florida Department of Transportation (1991) and by the Special Provisions for E4571. Respondent follows "Section 3-1 of the Standard Specifications for the purpose of evaluating bid proposals. Section 3-1 is used, in part, to determine the extension price for item numbers listed on the Unit Price Sheet. Section 3- 1 provides in relevant part: In the event of any discrepancy in the three entries for the price of any item, the unit price as shown in words shall govern unless the extension and the unit price shown in figures are in agreement with each other, In which case they shall govern over the unit price shown in words. Petitioner did not show the unit price in words for any item number on the Unit Price Sheet, including item number A583-4. There is a discrepancy in the three entries for item number A583-4 on the Unit Price Sheet. Petitioner failed to show the unit price for item number A583-4 in words, and the unit price and extension price are not in agreement. Under such circumstances, Respondent interprets Section 3-1 of the Standard Specifications as requiring that Petitioner's bid be declared irregular and rejected. Respondent's interpretation of Section 3-1 of the Standard Specifications is reasonable and is consistent with the mandate in Item 4 of the Special Provisions for E4571. See Finding 4, supra. Furthermore, in practice, the correct unit price of a pay item is necessary to process payment under the contract and the contractor must submit invoices based upon the pay items and unit prices listed in its bid. The bid specifications for E4571 provide that a bidder is responsible for his or her own averaging of a stated unit price, and that if a bidder fails to provide a single unit price for each pay item on the Unit Price Sheet the bid shall be declared "Irregular" and will be rejected. The requirement to provide a single unit price for each pay item was emphasized by Respondent at the mandatory pre-bid meeting. Petitioner's representative attended the mandatory pre-bid meeting. No challenges were made to the bid specifications by any bidder.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order dismissing the protest filed by Petitioner. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 20th day of February, 1992. DANIEL MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (964) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of February, 1992.
The Issue The issue in this case concerns whether the Florida Department of Transportation's (FDOT's or Department's) proposed action to award a contract to Couch Construction, L.P., is contrary to the agency's governing statutes, the agency's rules or policies, or the bid or proposal specifications.
Findings Of Fact The Florida Department of Transportation (Department) issued an Invitation to Bid (ITB) for road resurfacing on State Road 10/US 90 in Columbia County, Florida; Financial Project No. 208406-1-52-01 (The Project). Four companies submitted responses to the ITB. Couch was low bidder at $2,271,354.81, and Petitioner was second low at $2,278,263.07. The ITB incorporated the plans and specifications for the proposed highway resurfacing. The price proposal specifications stated in pertinent part: Item Number 2102-10. . .Approximate Quantity. . . 4,320.00 hours Item Number 2102-74-1 . Approximate Quantity . . .75,780.00 each day Item Number 2102-99 . . Approximate Quantity . . . 720.00 each day None of the bidders filed a timely objection to the price proposal specifications. Article 2-6, of the Florida Department of Transportation Standard Specifications for Road and Bridge Construction states: A proposal will be subject to being considered irregular and may be rejected if it shows omissions, alternations of form, additions not called for, conditional or unauthorized alternate bids, or irregularities of any kind; also if the unit prices are obviously unbalanced, either in excess of or below the reasonable cost analysis values. After the bids were opened, each bid was reviewed by the Department to determine whether the bid was mathematically and/or materially unbalanced. The Department's Preliminary Estimates Engineer conducts an unbalanced review of the bids to determine if the bids are mathematically unbalanced. A bid is considered to be mathematically unbalanced if the prices quoted are significantly different from the approximate cost of the item to the contractor. It is very common for bids on construction projects to contain some item prices that are mathematically unbalanced. Bid prices that are mathematically unbalanced are considered by the Department to be non-material irregularities if they do not affect the order of the bidders. In determining whether a mathematically unbalanced price is material, the Department follows a policy set out by the Federal Highway Administration (FHWA). The Department has been following the same policy since at least 1992. The FHWA does not allow for materially unbalanced bids to be accepted by the Department on projects that are federally funded. A materially unbalanced bid is one in which there is a reasonable doubt as to whether award to the bidder submitting the mathematically unbalanced bid will result in the ultimately lowest cost to the Department. The Department has developed an Unbalanced Program Logic for its computer analysis of the bids. The program flags the items that are mathematically unbalanced. It flags the item with an "A" for those items that are above the tolerance window, "U" for under the tolerance window, and "F" as front-loaded items. The flagged items which are short-listed by the computer program are sent to the designer of record to verify the quantities and to verify whether the correct pay item was used. The designer of record verified that the quantities were correct for this Project. As part of the bid review, the Department does a statistical average or mean average for each of the bid items. A standard and a-half deviation either side of the mean is established. The bid items outside that standard and a-half deviation, positive or minus, are discarded. The remaining bid items are re-averaged and this second average is referred to as the "serious average." A front-end loaded item is an item for which work is performed early in the contract. Mobilization is considered a front-end loaded item. Couch's Mobilization item 2101-1B was flagged by the computer analysis. The Department did an analysis of the Mobilization item. The Department started with the difference between Couch's bid and the Petitioner's bid on this item, $18,0000.00. That amount was multiplied by the current interest rate, 10 per cent, and then multiplied by a factor of .5, which spread it over half the contract, times 180-day contract period divided by 365, one calendar year. The result was $434.84, which represents the potential advantage that could result from paying the $18,000.00 amount early in the contract. That amount, $434.84, did not materially unbalance Couch's bid. The three items identified by Petitioner as unbalanced (paragraph 3, above) were low and did not present any detriment to the Department. If those three items overran at the rate established, it would be an advantage to the Department. In evaluating unbalanced bids, the Department follows the guidance in a May 1988 memorandum from the FHWA, which addresses bid analysis and unbalanced bids. The memorandum provides that where unit prices for items bid are either unusually high or low in relation to the engineer's estimate of the price, the accuracy of the estimated quantities of the items are to be checked. If the quantities are reasonably accurate, the bid is to be further evaluated to determine whether the mathematical imbalance is materially unbalanced such that there is "reasonable doubt that award to the bidder submitting the mathematically unbalanced bid will result in the lowest ultimate cost to the Government." The analysis of a mathematically unbalanced bid to determine if it is materially unbalanced considers the effect of the unbalanced bid on the total contract amount; the increase, if any, in the contract cost when quantities are corrected; whether the low bidder will remain as the low bidder; and whether the unbalanced bid would have a potential detrimental effect upon the competitive process or cause contract administration problems later. In this case, the Department compared the unit prices (line item prices) by each bidder on the bid proposal sheet to the average unit price for that item. The average unit price is based upon an average of the bidders' unit prices bid for a given pay item and the Department's estimated unit price for that item. If an individual bidder's unit price is significantly greater or less than the average price, the Department's computer flags the item as mathematically unbalanced. Such a bid then receives further evaluation by the Department to ensure the accuracy of the original estimates of the quantities of those items for which an unbalanced unit price has been submitted. The Department also reviews the project plans for accuracy. The more in-depth review is performed to determine if there is a potential for a cost overrun or if there is an error in the Department's estimated quantities which would result in an increased cost to the Department for the project. In this case, Couch and Anderson submitted bid proposals for each of the individual line item prices contained on FDOT's form. Couch's unit price for the off-duty law enforcement item was $0.25/hour. The Department's average price for the off-duty law enforcement item was $25.22/hour. The Petitioner's quotation for off-duty law enforcement was $26.00/hour. The Department's computer analysis of Couch's bid flagged the off-duty law enforcement item as mathematically unbalanced. The quote by Petitioner for the off-duty law enforcement item was not unbalanced, and therefore was not flagged for further review by the Department. The same analysis was applied to the barricades and variable message sign items, with similar results. The Department also did an in-depth review of item 2101-B, Mobilization, for front-end loading. The result of that analysis was that, as a result of front-end loading, there was the probability of increased cost to the Department of $443.84. This small increase in the cost to the Department was not large enough to change the order of the bidders. Therefore, it was not a materially unbalanced item. The Department then made a more in-depth review of the three mathematically unbalanced items in Couch's bid and determined that none of those items were materially unbalanced, because none of them had the potential to increase the cost to the Department and none of them had the potential to change the order of the bids. In sum, the Couch bid was not materially unbalanced. The evidence in this case is insufficient to support a basis for rejecting the Couch bid.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the Florida Department of Transportation issue a final order in this case dismissing the Petitioner's Formal Protest and Request for Hearing; denying all relief requested by the Petitioner; and awarding the subject contract to the Intervenor, Couch Construction, L.P. DONE AND ENTERED this 7th day of May, 1999, in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 7th day of May, 1999.
Findings Of Fact By Notice To Contractors dated October 4, 1984, Respondent Department of Transportation (DOT) advertised for sealed bids on a number of state road projects for submission by 10:30 A.M. on October 31, 1984. Among the projects were Job No. 97930-9384 in Palm Beach County, and Jobs No. 97890-3323 and 89090- 3513 in Martin County. The Notice to Contractors provided that a proposal guaranty of not less than five percent (5 %) of the total actual bid must accompany each bid in excess of $150,000, and provided that bid bonds shall conform to DOT Form 114-G (Rev. July 1969). It further stated that all work was to be done in accordance with the plans, specifications, and special provisions of the State of Florida, Department of Transportation. (Stipulation, Ranger Exhibit 9, Dickerson Exhibit 3). Petitioner Dickerson Florida, Inc., (Dickerson) of Stuart, Florida is a contractor that frequently submits bids on DOT road projects. Ted H. Tyson is President of the firm and has participated in some 1,000 to 1,200 bids with DOT since 1960. He and his Vice-President, James R. Widmann reviewed the DOT advertisement of October 4, 1984, and determined to bid on several projects, including the Martin County Job No. 97890-3323 and 89090-3513. Accordingly, Widmann directed his Executive Secretary, Sandy MacCallum, to order the bid packages from DOT and to obtain necessary bid bonds. She proceeded to follow her instructions. The bid bonds were ordered from Surety Associates, Inc., in Jacksonville, Florida, a firm that had done business with Dickerson for some 15 years. Surety Associates mailed two (2) bid bonds, including one (1) for the project in question, to Dickerson on October 16, 1984 and they were received by Dickerson on October 18, 1984. The project documents were received from DOT about October 10 and the Dickerson bid was prepared in Stuart, including the signature of Tyson on the bid bond. Tyson and Widmann took the Dickerson bid proposals to Tallahassee on October 30, 1984. They did further work on the bid materials for three (3) projects at their hotel that evening. The next morning, after ascertaining low bids of sub-contractors, they completed work on the bid packages and checked to insure that they were complete, including the fact that the bid bonds were in the envelopes with the three (3) bids. They were then sealed by Widmann and delivered by him at approximately 9:30 A.M. on October 31, to the DOT central administration office. The bid bends had been placed in the bid materials, but not stapled to the other documents. (Stipulation, Testimony of Lynch, MacCallum, Widmann, Tyson, Dickerson Exhibits 1-2). Ranger Construction Industries, Inc., (Ranger) of West Palm Beach, Florida is a contractor that has submitted bids to DOT in the past, and the firm decided to bid on four (4) projects for the October 31, 1984 bid opening. Bid bends for the proposed projects were ordered by Ranger from the George H. Friedlander Company of Charleston, West Virginia on October 18, 1984. They were issued and mailed to Ranger by that firm on the same date, including one (1) for the project in question, Job No. 97930-9384 in Palm Beach County. On October 30, 1984, the Ranger "Bid Team" consisting of representatives of the firm arrived in Tallahassee where they occupied adjoining rooms at a local hotel. They were joined that evening by George Friedlander whose firm had issued the bid bonds for the four (4) projects on which Ranger intended to bid. They worked during the evening on the bid packages and continued the following morning at which time several independent checks for completeness were made by Friedlander, Leo Vecellio, Jr., President of Ranger, and James M. Slade, Executive Vice-President. They made sure that the bid bonds were placed in the already stapled bid documents in each envelope which were thereafter sealed. It was noted during this process that one (1) bid bond was missing, but it was immediately found in the room and also inserted into the appropriate envelope and sealed. Thereafter, Friedlander and Gene Pearson, a Ranger representative, took the bid envelopes to the basement of the hotel and placed them in a bid box maintained by the Florida Transportation Builders Association as a service to association members. The bid box was in a foyer and a representative of the association was present at all times. Immediately prior to placing the envelopes in the bid box, the envelopes were sealed by scotch tape by Pearson. At about 9:45 A.M., they were taken by an employee of the association to the appropriate location for submission of bids at the DOT building. (Stipulation, Testimony of Slade, Vecellio, Stanchina, Friedlander, Brewton, Ranger Composite Exhibit 1, 5-9). On October 31, 1984, DOT personnel followed their customary procedures in processing bids submitted on 53 projects. Lee Schroeder was in charge of the bid opening in place of his supervisor, John Ted Barefield, Chief Bureau Contracts Administration, who was absent that day. Schroeder was assisted by Ray Haverty and about eight (8) other DOT employees. At 10:30 A.M., the various bids were opened by the DOT employees, removed from their envelopes, and stacked on tables by project number. There is no evidence that any of the bids were unsealed prior to opening at the appointed time. Haverty and Schroeder checked the bids for addenda. No check was made at this time for the presence or absence of bid bonds. The bids were then stacked by job number and moved to a higher level in the DOT auditorium where Haverty read the pertinent information from the bids regarding the job, name of bidder, and amount of the bid. Dickerson was the apparent low bidder on Job No. 97890-3323 and 89090-3513 with a bid of $1,010,459.35, and Ranger was the apparent low bidder on Job No. 97930- 9384 with a bid of $1,210,323.66. Dickerson's bid was $75,246.49 lower than the next low bidder, and Ranger's bid was $83,365.93 lower than the next low bidder. After reading the pertinent bid information, a rubber band was placed around the bids for each project and placed in a plastic container. After completing the bid opening procedure, the four (4) or five (5) plastic containers holding all the bids were covered and placed on a cart where they were taken to the contract administration office. The bid envelopes had also been placed in a cardboard box when the bids were opened and they were taken to the same office on the cart. The envelopes were checked for any contents, but nothing was found. (Testimony of Barefield, Schroeder, Haverty, Stipulation, DOT Exhibit 2). During the afternoon of the bid letting, several employees of DOT's minority programs office reviewed all of the bids to determine the presence or absence of required documents concerning the disadvantaged business enterprises and good faith effort submittals in this regard. During the course of this review, pertinent documents were photocopied and, in some instances, it was necessary to unstaple the bid packages to perform this function. A trash can was available in the immediate area for the disposal of any peer copies. The trash cans are emptied each evening by custodial personnel. The minority programs employees finished their review the next morning, November 1, 1984. At this point, Ray Haverty customarily stapled any loose bid bends to the back of the front cover of the bid package so that there would be no loose documents when the bids were given to other employees who served as "checkers" of the bid documents. (Testimony of Haverty). The DOT "checkers" are provided with the bids for one (1) or more projects and they proceed to check the bid documents for appropriate signatures, bends, seals, and the like. The standard procedure is for a checker to write the initials "BB" on the top left side of the front sheet of the bid documents if the bid bend has been included. If not included, the checkers are suppose to clip a note reflecting that fact to the front of the bid package. During the course of checking the bids in question, it was discovered that there were no bid bonds in the Dickerson and Ranger bid packages for the jobs in question. Although different checkers had placed a "BB" on the top front page of each bid package, the specific checkers in question were under the misapprehension that that symbol should be placed there simply because the documents had been checked for bid bonds. The correct procedure is set forth in a checklist that bid checkers are supposed to follow, although the date of inception of its use is unclear. As soon as it was reported to Ray Haverty that the Dickerson and Ranger bonds were missing, he instituted a thorough search of the office, including the minority business programs office, but was unsuccessful in finding the two (2) missing bid bonds. Although it was not precisely established when Haverty was informed of the missing bonds, it was probably on either November 2, or Monday, November 5, 1984. (Testimony of Haverty, Maloy, Daniels, Pilcher, Stipulation, Dickerson Exhibit 2). On November 5, 1984, Dickerson was advised by telephone call to its Stuart, Florida office from DOT's employee, Lee Schroeder, of the Contracts Administration Division, that the bid bond on the Martin County project could not be located. DOT was told by Dickerson that the bid bond had been included in the sealed envelope with its bid and that a copy of the original bid bond and a replacement bid bond would be promptly secured and submitted to DOT. On November 8, 1984, or shortly thereafter, Dickerson submitted a copy of the original bid bond, a replacement bid bond, and affidavits of Tyson, Widmann, and MacCallum concerning submission of the original bid bond. On November 15, 1984, the DOT Contract Award Technical Review Committee met and determined that Dickerson's low bid be rejected as non-responsive for failure to include a bid bond with its bid, and that the contract be awarded to the next low bidder, Hardrives Company of Ft. Lauderdale, Florida. The notice of DOT's intent to award State Job No. 97890-3323 to Hardrives Company was confirmed in a Mailgram dated November 16, 1984, and the formal notice of intent to award to that firm was issued eon December 10, 1984. Dickerson thereafter protested the rejection of its bid. (Testimony of Widmann, Tyson, Parefield, Lynch, Stipulation, DOT Exhibits 3, 6). Similarly, Ranger was advised by telephone call from Schroeder on November 5, 1984 that its bid bend for Palm Beach County-State Project Job No. 97930-9384 could not be located by DOT. By letter of November 6, 1984, Ranger informed DOT that the requisite bid bend had been present in the sealed bid envelope when submitted to the agency on October 31, 1984, and enclosed a duplicate original of the bend. At the November 15, 1984 meeting of the Contract Award Technical Review Committee, Ranger's low bid on the project was rejected as non-responsive due to the failure to submit a bid bend, and the committee voted to award the contract to Hardrives of Delray. By Mailgram, dated November 16, 1984, DOT advised Ranger that its low bid had been declared "irregular" due to its failure to submit a bid bend and stating that Hardrives of Delray, Inc., was new the apparent low bidder on the project. Ranger thereafter protested the decision by letter of December 10, 1984, and on December 18, filed its formal protest of the proposed award. (Testimony of Slade, Friedlander, Stipulation, DOT Exhibits 3, 6; Ranger Exhibits 2-4). The DOT 1982 standard specifications for road and bridge construction which are incorporated as a part of the bid proposal, provide pertinently as fellows: SECTION 1: Definition and Terms. 1-29 Proposal Guaranty. The security designated to be furnished by the bidder as guaranty that he will enter into the contract for the work if his proposal is accepted. SECTION 2: Proposal Requirements and Conditions. Rejection of Irregular Proposals. A proposal will be subject to being considered irregular and may be rejected if it shows omissions, . . . or irregularities of any kind. . . . Guaranty to Accompany proposals. No proposal will be given consideration unless it is accompanied by a proposal guaranty of the character and amount indicated in the Notice to Contractors, and made payable to the Governor of the State of Florida. Proposals shall be submitted with the under- standing that the successful bidder shall furnish a contract bond pursuant to the re- quirements of 3-5. SECTION 3: Award and Execution of Contract. 3-2 Award of Contract. 3-2.1 General: The award of the contract, it if be awarded, will be to the lowest responsible bidder whose proposal complies with all the requirements necessary to render it formal. (Testimony of Barefield, DOT Exhibit 5). It was stipulated by the parties that Ranger and Dickerson meet all requirements for the award of the contracts in question if it is determined that they submitted the required bid bonds to DOT in their bid packages on October 31, 1984. Based on the foregoing facts, it is further specifically found that both Ranger and Dickerson submitted the requisite bid bonds on the projects in question in their bid packages on October 31, 1984, and that the cause of the apparent loss of the bonds thereafter cannot be determined by the evidence presented at the hearing.
The Issue Whether Petitioner should be granted an equitable adjustment to increase the contract price in the amount of $337,714 for a mistake in bid on project No. BR-7702/8701, Library/Auditorium, Florida International University.
Findings Of Fact In April 1974, Respondent advertised for bids for the construction of a library-auditorium building at Florida International University, Miami, Florida, State Project No. B.R. 7702/8701. Respondent's representative for this project was the architectural firm of Ferendino/Grafton/Spillis/Candela, Coral Gables, Florida. The advertisement for bids specified that sealed bids would be received until 2:00 p.m. on May 16, 1974, at which time they would be publicly opened and read aloud. In fact, the advertised time period was extended until the same hour on May 23, 1974. The advertisement provided that bids must be submitted on the proposal form furnished by the architect/engineer and be accompanied by a bid bond or an equivalent cash amount in a sum not less than five per cent of the amount of the base bid as a guarantee that the bidder would enter into an agreement with the owner if this bid was accepted. It further provided that the bid would remain in force for thirty (30) days after the time of opening. The advertisement also contained the following statement: "The Department of General Services reserves the right to reject any and all bids and to waive informalities in any bid whenever such rejection or waiver is in the interest of the State of Florida." (Exhibit 1a, testimony of Williams) In preparing its bid on the project, Petitioner utilized two company forms. One included columns for the various portions of the work with blocks opposite each portion for the insertion of the names of subcontractors and the amounts of their bids. The other form was a recapitulation of the low subcontractors' bid by the various segments of the contract, and the form also included spaces and amounts for the work to be accomplished by the contractor itself. The normal procedure followed by Petitioner in this and prior projects was to enter subcontractors' bids on the subcontractor's bid tabulation form when received over the telephone and, when all such bids had been received shortly before the deadline for submission of bids by the prime contractors on the project, to enter each low subcontractor bid on the recapitulation form. This would then be totaled to arrive at Petitioner's bid to be submitted to Respondent. (Testimony of Kearns). The subcontractor tabulation form for the instant project listed an item for "PRECAST STRUCTURAL." Opposite this entry in blocks on the form had been printed the names of subcontractors from whom Petitioner expected to receive bids, including Pre-Stressed Systems, Inc. (P.S.I.), Meekins, Stresscon, and Houdaille. However, since there were two different pre-case structural items called for under the specification, i.e., joists under section 3-B and pre-case panels under section 3-C, the words and figures "3B Joists" and "3C panels" were penciled in above and below the printed words "PRE-CAST STRUCTURAL" to show the need for entering bid figures for both items. However, there was no separation of these items in the various blocks for subcontractor's bids. (Exhibits 1b, 1c, Testimony of Kearns) Usually bids of major subcontractors were not received until the morning of the final day for submission of the total bids, and many were not received until immediately prior to the time the bid must be tallied and submitted. On the morning of May 23, 1974, the day for bid opening, Petitioner's employee, Edward A. Kearns, Jr., an estimator, was responsible for preparing Petitioner's bid. The only bid Petitioner had received for precast joists was that submitted by P.S.I. in the base amount of $460,000. This sum was entered on the bid tabulation from in pencil under the printed name P.S.I. Bids for the pre-cast panels were received from two of the subcontractors whose names were printed on the form an the amounts were entered in pencil as follows: "Meekins - 399,800, Stresscon - 400,00." No bid was entered for Houdaille. About 11:00 a.m., a telephonic bid on the panels was received from Cast-Crete Corporation of Kissimmee. This bid was considerably lower than that of Meekins and, because Petitioner had not heard of or dealt with Cast-Crete in the past, it asked all three bidders on the panels to verify the requirements and prices. While awaiting the return of this information, the Cast-Crete bid was not entered on the bid tabulation form. Thereafter, Cast-Crete informed Petitioner that it was raising its bid somewhat and this information was placed on a separate subcontractor bid form for cast-Crete, but not entered on the tabulation form containing all bids. The final Cast-Crete bid was in the amount of $337,714. By this time, Petitioner's office was quite hectic in that other bids were coming in at a fast pace and the phone was ringing continuously. Many bidders sought clarification on items or had to give their bids to Kearns which was time-consuming. As the time for submission by Petitioner to Respondent drew near, Kearns took the low subcontractor bids from the bid tabulation form and transferred them for each category of work to the recapitulation form. On this form, there was a single line for "Precast structural" and, on that line, Kearns entered the bid that had been received from P.S.I. for precast joists, but forgot to include any bid for the precast panes. Since no breakdown for joists and panels was shown on the recapitulation form, he assumed that bids for all portions of the work hand been included. All items on the recapitulation form were added and Petitioner arrived at a total base bid of $3,999,259, which did not include the bid for precast panels in the amount of $337,714. (Testimony of Shafer, Sr., Kearns, Exhibits 1b, 1c, 1f) Petitioner's employee, Ron Shafer, Jr., previously had been sent to the place of bid opening at Florida International University with the formal bid letter with the amounts left blank. Shortly before 2:00 p.m., Petitioner provided him by telephone with the amounts to place on the be bid form and submit to the Respondent's representative. He submitted the formal bid just prior to the deadline. The bids were thereafter opened and, although Ron Shafer, Jr., noted that Petitioner's bid was some $400,000 lower than the next lowest bidder, he was unaware of the circumstances of the mistake and returned to the office. The representative of Respondent had opened the bids and an officer of the architectural firm, Freeman J. Williams, was also present. Nothing was said at the time concerning the large disparity between Petitioner's bid and the other bids, and Williams saw no need to ask Petitioner to verify its bid at that time. (Testimony of Shafer, Jr., Williams, Exhibits 1d, 1v) Meanwhile, after Kearns had tallied the final bid figures and they had been called in to the employee at Florida International University, Petitioner's personnel sat around the office and discussed the job for several minutes. They then started to gather up all the sub-bids to put in a folder when they discovered a "subcontractor's bid form" for Cast-Crete Corporation and realized that it had not been included on the tabulation sheet or on the final recap sheet. Immediate attempts were made to telephone the architect about the mistake. When Williams was reached at his office some thirty minutes after he had left Florida International University, Petitioner requested that its bid be withdrawn after explaining the circumstances. Williams suggested that Petitioner immediately send a telegram to Respondent explaining this situation. Petitioner did so in the following language: "In reviewing our bid, we discovered we had omitted the cost of precast panels manufacturers bid from our tabulation sheet, in the amount of $282,714. We, therefor, regretfully must with- draw our bid on the FIU library and auditorium building. We could, however, accept award of contract if this amount could be added to either of our base bids. Please advise. SHAFER AND MILLER, INC. R C Shafer" In the telegram, an additional mistake was made by using the figure of $282,714 which did not include the erection of the panels in the amount of $55,000 that had been the subject of a separate bid by Cast-Crete. After receipt of the telegram, Respondent's representatives requested that Petitioner come to Tallahassee with their pertinent documents relating to the bid to discuss the matter. They did so and thereafter heard nothing further until June 5, 1974, at which time a letter was received from the Department of General Services, dated May 31, 1974, advising that, subject to final approval by the Governor and the Cabinet, it was propose to recommend acceptance of Petitioner's low bid and award the contract to it in the amount of $4,122,000 for Base Bid 1 and Priority 1 Alternate A, Priority 2, Alternate C, and Priority 3, Alternate D. The meeting of the Cabinet at which the award was to be recommended was stated in the letter to be held on June 4, 1975. Since Petitioner did not receive the letter until June 5, it had no opportunity to be present at the time matter was considered. By separate letter of May 31, 1974, the Department of General Services enclosed four copies of a standard form of agreement and performance and payment bond to be executed and returned. (Testimony of Williams, Shafer, Sr., Kearns, Exhibits 1e, 1g, 1h) Petitioner contacted legal counsel, James E. Glass, on June 5. He checked into the matter and found that the contract had already been awarded on June 4 by the Cabinet. He then telephoned Arnold Greenfield, General Counsel for the Department of General Services, and asked if the state could rebid the job at which time Petitioner would submit its original intended bid. Greenfield stated that the project was critical from a budget standpoint and that the state would not rebid it, and insisted that the Petitioner proceed or else forfeit its bid bond and be subject to suit for any excess costs of performance. Glass reminded Greenfield that Petitioner proceed or else forfeit its bid bond and be subject to suit for any excess costs of performance. Glass reminded Greenfield that Petitioner could seek injunctive relief in the matter, and the latter then stated that if Petitioner would proceed with the contract, Respondent would acknowledge its right to claim a modification of the contract. This conversation was confirmed in a letter from Greenfield to Glass, dated June 7, 1974, wherein it was stated "We further understand that your client may wish to seek a modification of such contract, after execution." Glass, in a return letter dated June 12, returned the executed contracts and bonds, stating that Petitioner was doing so in order to act "equitably and in good faith", and was fully reserving its rights to contest the erroneous bid by judicial action for equitable relief. Thereafter, Petitioner received notice to proceed with the work and in due course satisfactorily completed the contract within the required period. This was evidenced by a certificate of acceptance of the building by the using agency, which was approved by Respondent on December 4, 1975. (Testimony of Glass, Exhibit 1e, 1g, 1h, 1i, 1j, 11, 1m, 1s) In December, 1974, Petitioner had submitted its claim for an equitable adjustment in the amount of $337,714 which was the amount of the omitted Cast- Crete bid. During the ensuing year Petitioner submitted audits of its expenses on the job to Respondent and in January, 1976, further audit information was provided at the request of Respondent. On May 6, 1976, Respondent informed Petitioner that it would not approve any increase in the contract amount. Thereafter, on June 11, Petitioner filed its petition herein seeking an equitable adjustment in the amount of $337,714. The petition was referred to the Division of Administrative Hearings by the Respondent on August 2, 1976, and the undersigned Hearing Officer was assigned to conduct the hearing therein. (Exhibit 1r, 2, 4, 5, 6) By a Motion to Abate, dated August 23, 1976, Respondent requested that the matter be held in abeyance pending the submission of the petition to the project architect and his rendering of a determination indicating whether the relief should be granted or denied, as a "condition precedent to the contractor obtaining consideration of said petition in any proceeding authorized by Chapter 120, Florida Statutes." Respondent stated in its motion that the contract clearly provided that nay and all claims or disputes should be first submitted to the architect for determination, and that thereafter, either party could obtain administrative review of the determination by filing a written appeal to the Department of General Services within thirty days. The motion further stated that since this prerequisite had not been accomplished, there was no basis for an administrative appeal at that time. On the same date, Respondent advised the architect of the situation and requested expeditious consideration of the matter. On August 27, the architect issued its determination stating "From our personal knowledge of the events during the bid opening process, and the subsequent events that led to the awarding of the bid, we concur in the contractor's request." In November 1976, Respondent's general counsel advised the Hearing Officer that settlement efforts were in progress but requested that the matter be scheduled for hearing nevertheless. Notice of hearing was issued on December 15, 1976, and the case was heard on January 27, 1977. (Exhibits 1t, 1u, Pleadings) Petitioner's intended total bid, including alternates, amounted to $4,459,714. A change order of $194 was issued during the course of the work, amounting to a total of $4,459,908. Petitioner's direct costs on the project were $4,094,890. Overhead was computed at 2.85 per cent of direct costs in the amount of $116,705, for a total cost of $4,211,595. Overhead was computed based on the ratio of total general and administrative expense to total direct costs incurred on all of Petitioner's jobs in process for the year ending May 31, 1975. However, the audit reports included payment in the amount of $335,634 to Cast-Crete Corporation. The actual amount paid to that firm was $325,234 - difference of $10,400, making Petitioner's actual costs $4,201,195. During the course of the contract, Respondent paid Petitioner $4,122,194, resulting in a net loss to Petitioner of $79,001. An anticipated profit for performance of the contract was computed on the basis of the average profit on other jobs of 4.4 per cent, amounting to the sum of $180,377. The latter two sums total $259,378, and it is found that figure is the reasonable amount of Petitioner's claim. (Exhibits 2-5)
Recommendation That Petitioner's claim for equitable adjustment under Project No. BR- 7702/8701 be granted and that a change order be issued increasing the contract price by $259,378.00. DONE and ENTERED this 21st day of March, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 (904) 388-9675 COPIES FURNISHED: Donna H. Stinson and Daniel S. Dearing, Esquires Post Office Box 1118 Tallahassee, Florida 32302 James E. Glass, Esquire 2600 First Federal Building 1 Southeast 3rd Avenue Miami, Florida 33131 John A. Barley, Esquire General Counsel Department of General Services Room 110 Larson Building Tallahassee, Florida 32301
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 Pursuant to Section 287.042(2), Florida Statutes, the Department of Management Services (DMS), lets various Invitations to Bid (ITB) for the benefit of state agencies, cities, counties and other local government agencies so that these entities may purchase a variety of goods and services. On August 24, 1993, DMS issued Invitation To Bid #28-070-700-P. The bid was one of 225 Invitations to Bid issued by DMS in 1993. The bid was for the purchase of medium and heavy trucks. The bid which is the subject of this case involves truck #150. The truck #150 bid has thirteen pages with forty- seven options plus base truck bid blanks. General Condition 1 of the Invitation to Bid requires that "all corrections made by bidder to his price must be initialed." Other documents provided by the Department to interested bidders as part of the bid package reiterate the requirement that all price changes must be initialed. These documents include the "Checklist," a document entitled "Common Problems That Result in Bid Being Rejected" and the document entitled "Medium and Heavy Trucks Index." The requirement in General Condition I of the Invitation to Bid, that all price changes must be initialed, contains no printed exceptions with respect to "nonpreselected" options. The purpose of the requirements of General Condition 1 of the Invitation to Bid is to protect both the State of Florida as well as competing vendors. The reason for the requirement that all price changes or alterations be initialed by the vendor is to protect both the State of Florida against a successful bidder later inserting higher option prices and charging the state agencies those prices, and the vendor against the State later inserting lower prices and attempting to hold the vendor to those prices. General Condition 13 of the bid document states: LEGAL REQUIREMENTS: Applicable provisions of Federal, State and Local law and all ordinances, rules, and regulations shall govern development, submittal and evaluation of all bids received in response hereto and shall govern any and all claims and disputes which may arise between persons(s) submitting a bid response hereto and the State of Florida, by and through its officers, employees and authorized representatives, or any other person, natural or otherwise; and lack of knowledge by any bidder shall not constitute a cognizable defense against the legal effect thereof. . . (Emphasis added.) General Condition 13 incorporates Rule 60A-1.001(3), Florida Administrative Code, which permits the State to waive minor irregularities in the conformance of a bid proposal to the formal bid requirements. The lowest bidder is determined by two factors. The first factor is the price for the base truck. The base truck is the minimum truck which can be ordered in this contract with no options. It is basically a chassis with an engine. The second factor involves additions to the truck called preselected options or predetermined options. All of the other options for the particular vehicle are deemed nonpreselected options. Preselected options are generally the most frequently ordered additions to the base truck along with some other less frequently ordered options. The preselected options can vary from bid to bid; however, DMS always determines the preselected options before opening the bids. The price of any option cannot exceed retail price. There is, therefore, a ceiling for the prices of preselected and nonpreselected options. The preselected options are not announced until after the bid is posted to prevent dishonestly low prices on preselected options and to promote competitive prices throughout the contract document. The bidders therefore do not know which options are preselected when they are composing their bids. There is nothing to be gained by a bidder loading a particular option with a high markup, because the bidder cannot guarantee that the option will not be preselected. The bid evaluation price is the base truck price plus the price of the combined chosen preselected options. DMS received numerous bids on the ITB, including a bid from Petitioner and Intervenor. Atlantic Ford bid a combined price of $38,737.00, and was the apparent low bidder; Duval Ford bid a combined price of $39,944.00 and was the apparent second low bidder. Upon receipt of the bids from the bidders, the bids were held in a locked room until the bid opening. After the bid opening, the purchasing specialist assigned to this bid reviewed each bid for conformity to the general non-technical specifications. Only the Bureau of Procurement is responsible for the nontechnical review although other Bureaus or Divisions may review and have input into the review process. However, these other Divisions' input is not binding. In the nontechnical review the purchasing specialist reviewed each bid's signatures, whether or not the bid was signed in ink, and numerous other requirements. The purchasing specialist also reviewed the bids to determine if all base bid blanks and price blanks for preselected options were filled in and that no corrections were made to those prices without a bidder's initials acknowledging the change. The bids which failed to meet the general conditions of the bid for base bid items and preselected options were rejected as nonresponsive bids. After the initial nontechnical review, the bids were sent to the Division of Motor Vehicles and Watercraft for a technical evaluation. However, since each bid document contains bids for several trucks, there may be a mixture of responsive and nonresponsive bids for various trucks in the same document and the Division of Motor Vehicles and Watercraft may receive responsive and nonresponsive bids for technical review. John Bevins of the Division of Motor Vehicles and Watercraft reviewed the technical parts of the bid. This information included manufacturer's codes for options and base truck features as well as the manufacturer's retail price which no bidder can exceed. After John Bevins completed his review, he filled out a bid rejection recommendation form. John Bevins chose to include nontechnical items in his recommendation, although this was beyond the scope of his review. Mr. Bevins indicated on his bid evaluation form that Atlantic Ford failed to initial a typewritten correction on option 8206 of truck 150. Mr. Bevins returned the reviewed bids to the purchasing specialist along with his recommendation that Atlantic Ford's bid was not responsive since it failed to initial the typewritten correction on option 8206. The purchasing specialist discussed the failure of Atlantic Ford to initial the typewritten correction on option 8206 with H. P. Barker, Jr., the Bureau Chief of Procurement. H. P. Barker, Jr. has the final authority within the Bureau of Procurement to decide if a bid is responsive. He is the customary agency decision-maker on these matters. After careful consideration and discussion, H. P. Barker, Jr., determined that the failure of Atlantic Ford to initial the typewritten correction on a credit is a minor irregularity according to the Department's purchasing rules, since option 8206 was a nonpreselected option and did not effect the total bid price for determining the lowest bidder. Barker's decision was based on the State's interest in obtaining trucks at the lowest price, thereby obtaining the most goods per contracting dollar. Duval Ford conceded that the typewritten correction was faint and does not appear on photocopies of the bid. Barker testified that DMS accepts photocopies of bids. If Atlantic Ford had submitted a photocopy of its bid, as it could have legally done, then the typewritten correction would probably not have been noted by the Department or the other bidders. Barker also testified that bids are not rejected if nonpreselected option blanks are not filled in. Dealers can choose not to offer all nonpreselected options. Finally, in this case option 8206 was a credit. Even if a purchaser under the contract orders option 8206, it will pay six dollars ($6.00) less for the overall truck from Atlantic Ford than if the truck was ordered from Duval Ford. Duval Ford offered evidence from 1991, that DMS had rejected a bid of another dealer for failure to initial a price change on a nonpreselected option. However, Nelson Easom, Duval Ford's manager had not been able to discover any similar rejections in the subsequent two years. Barker testified that the policy regarding noninitialed nonpreselected options changed three years ago. DMS then decided to treat them as minor irregularities. The policy change was based on the public policy to award the lowest bid whenever possible and to prevent minor deviations in bids from causing the state to pay higher prices for goods and services. Moreover, the evidence did not show any abuse of the bid process which would occur should price changes not be initialed. The alleged "protection" afforded to bidders by requiring every change to be initialed is at best tenuous since any fraudulent price changes could easily be recognized by the party against whom the change was made. Given these facts, this case over initials appears to be much ado about nothing, and the failure of Atlantic Ford to initial its price change on a nonpreselected option is a minor irregularity and waiveable by DMS. DMS therefore did not act in an arbitrary and capricious manner by waiving the irregularity and awarding the bid to Atlantic Ford.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent issue a Final Order in this case dismissing Petitioner's formal protest and awarding the contract for the Project to Atlantic Ford. DONE AND ENTERED this 15th day of March, 1994, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of March, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-6790BID The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 16, 17, 18, and 19, of Respondent's Proposed Findings of Fact are adopted in substance insofar as material. Paragraphs 15 of Respondent's Proposed Findings of Fact was legal argument. The facts contained in paragraphs 1, 2, 3, 4, 10, 13, 17, 18, 21 and 24 of the Petitioner's Proposed Findings of Fact are adopted in substance insofar as material. The facts contained in paragraphs 11 of Petitioner's Proposed Findings of Fact were immaterial. The facts contained in paragraphs 5, 6, 7, 8, 9, 12, 14, 15, 16, 19 and 20 of Petitioner's Proposed Findings of Fact are subordinate. 9. The facts contained in paragraphs 22 and 23 of Petitioner's Proposed Findings of Fact were not shown by the evidence. COPIES FURNISHED: Charles Cook Howell, III Howell, O'Neal & Johnson Suite 1100 Jacksonville, Florida 32202 Cindy Horne Office of the General Counsel Department of Management Services Knight Building, Suite 309 2737 Centerview Drive Tallahassee, Florida 32399-0950 Kerri L. Barsh Attorney at Law Greenberg Traurig et al. 1221 Brickell Avenue Miami, FL 33131 Paul A. Rowell, Esquire General Counsel Department of Management Services 312 Knight Building 2737 Centerview Drive Tallahassee, FL 32399-0950 William H. Lindner Secretary Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950
Findings Of Fact By Joint Prehearing Stipulation filed at the time of hearing, the parties agree that bids for contract No. E-4450, the contract in issue here, were opened by the Respondent in Fort Lauderdale on October 11, 1991. Bids were received from five bidders including the Petitioner, Power, and the low bidder, Certified. Based on its evaluation of the bids submitted, on October 18, 1991, Respondent posted an intent to award the contract to Power Sweeping Services, Inc., Petitioner herein. However, thereafter, on October 22, 1991, the Department received a formal protest from the low bidder, Certified, challenging the intent to award. After review of the substance of Certified's protest, Respondent notified all bidders that it would be reposting its intent to award on November 5, 1991, and on that date, did repost, indicating an intent to award the contract in question to Certified, the low bidder. Thereafter, on November 14, 1991, Petitioner timely filed its formal protest, having filed its initial intent to protest on November 6, 1991. The bid blank, which was issued to all prospective bidders at the pre- bid conference held in this matter for a contract to involve mechanical sweeping on Interstate Highway 595 from its eastern terminus to Southwest 136th Avenue, including interchange ramps at I-95, I-595, and State Road 84, contained as a part thereof a notice to contractors which, at page 1 of 4, (page 1 of the 36 page bid package), contained a notation that for contracts of $150,000.00 or less, the bidder would be required to submit, as proof of ability to acquire a performance and payments bond: a notarized letter from a bonding company, bank or other financial institution stating they intend to issue a performance and payment bond in the amount of your bid, should your firm be awarded the project; in lieu of a notarized letter the following may be substituted: a bid guarantee of five percent (5%); or a copy of the contractor's certificate of qualification issued by the Department. This note specifically states that "failure to provide the following required evidence of bonding", as indicated above, with the bid proposal would result in rejection of the contractor's bid. Petitioner submitted a notarized "letter of commitment to issue bond" dated October 8, 1991, by Burton Harris, attorney in fact and resident agent for American Bonding Company. Certified submitted with its bid an un-notarized letter from Mark A. Latini, bond manager with Bonina - McCutchen - Bradshaw Insurance to the effect that "Amwest Surety Insurance Company is the surety for the above referenced contractor and stands ready to provide the necessary performance and payment bond for the referenced bid should CPM be low and awarded the referenced contract." Five bidders submitted bids. Certified was the low bidder with a bid price of $61,474.85. Florida Sweeping, Incorporated was second low bidder with a bid of $67,388.16, but that bid was rejected because an addendum was not noted. Petitioner was third lowest bidder with a bid of $72,290.65. Because Certified's bid as initially submitted did not contain the required notarized letter from the bonding company, its bid was initially rejected. Thereafter, however, Certified's president, Mr. Hanousek, who prepared Certified's bid, and who attended the pre-bid meeting, called the Department's District office the day the bids were opened and was informed that his company's bid was low, but was rejected because its bond commitment letter was not notarized. As a result, he submitted a notice of protest and a subsequent protest to the denial of Certified's bid. A hearing on Certified's protest was not held. When Joseph Yesbeck, the District's director of planning and programs, who was at the time serving as acting district secretary in the absence of the appointed secretary, was contacted by Mr. Hanousek. He reviewed the file and met with Ms. Martin, the District's contract administrator for construction and maintenance contracts and the contracting staff to see what was happening. At that point Ms. Martin explained why Certified's bid had been disqualified, and the matter was thereafter discussed with the District and Department attorneys. When the District secretary came back, Mr. Yesbeck briefed him and recommended that based on the information he had received from the District and Department attorneys, the failure to submit the notarized letter should be considered a non-material deviation and the Certified bid be determined the low responsive bidder. The reasons for this were that the absence of the notary did not really give any competitive advantage to Certified and that ordinarily defects of this nature are routinely allowed to be cured. When the District secretary, on the basis of the information provided by Mr. Yesbeck, decided to repost the contract, Mr. Yesbeck prepared a joint letter of reposting which removed Certified's disqualification and left it as the low bidder. None of the other rejected bidders, including Florida Sweeping and bidder Number 5, which was rejected because its bond proposal was not of a proper character, were advised that they could come in and correct the defects with their bond letters. According to Ms. Martin, the notice to contractors requiring a notarized letter from a bonding company as an alternative to the requirement to post a 5% bid guarantee was designed to promote participation in state contracting by small business and minority business enterprise applicants, so that the bidder does not actually have to post the bond in question. The notarization requirement was put in by the Department but neither Ms. Martin nor any other witness testifying on behalf of the Department was able to indicate why the bond certification had to be notarized. Historically, when the Department has gotten a bid without a notarized bond letter it has been rejected, and in Ms. Martin's experience, she has never known of a protest based on such a denial since she began working with contracts in July, 1988. When she reviews the bids, she reviews the bonding letter for its content as well as seeing whether it is notarized. Here, her reason for initially rejecting certified's bid was solely that the bond commitment letter was not notarized. The decision to reject was not hers alone, however, since she also checked with the District General Counsel who initially advised her that Certified's bond commitment letter was no good. Apparently, counsel changed his position upon discussion of the matter with Mr. Yesbeck and the Department's General Counsel since, according to Mr. Yesbeck, both counsel recommended subsequently that the absence of the notarization not be a disqualification. Further, according to Ms. Martin the requirement for the notarization has been utilized by District 4 since 1987 with all bids requiring it notwithstanding Mr. Hanousek's testimony that he has never seen the requirement before in any of the 6 successful contract's he has had with the Department before. In that regard, however, he admits this is the only contract he has had with District 4. Ms. Martin does not know if the notarization requirement is used in other Districts and no evidence as presented by any party to clarify that issue.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law it is, therefore: RECOMMENDED that a Final Order be entered setting aside the determination that Certified Property Maintenance's bid on Contract No. E4450, Job No. 869069108 was the low responsive bid. RECOMMENDED in Tallahassee, Florida this 28th day of January, 1992. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of January, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 91-7592BID The following constitute my ruling on all Proposed Findings of Fact pursuant to Section 120.59(2), Florida Statutes submitted by the parties hereto. FOR THE PETITIONER: None submitted. FOR THE RESPONDENT: 1. & 2. Accepted and incorporated herein. Accepted and incorporated herein except for the finding that Certified's bid complied in every respect except the notarization. The assurance by the bonding company was not unqualified but conditioned upon Certified being awarded the contract. Accepted and incorporated herein. & 6. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. Accepted and incorporated herein except for last sentence regarding which see 3., supra. Accepted and incorporated herein. FOR THE INTERVENOR: None submitted. COPIES FURNISHED: Bruce M. Cease, Esquire 2720 West Flagler Street Miami, Florida 33135 Susan P. Stephens, Esquire Department of Transportation 605 Suwannee Street, MS 58 Tallahassee, Florida 32399-0458 Ray Hanousek President Certified Property Maintenance 3203 Robbins Road Pompano Beach, Florida 33062 Ben G. Watts Secretary Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0458 Thornton J. Williams General Counsel Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0458
The Issue The issue for determination is whether Respondent acted fraudulently, arbitrarily, illegally, or dishonestly in selecting Intervenor as the lowest bidder for a contract to supply the state with lamps valued at $3,692,499.
Findings Of Fact The Parties Respondent is the state agency responsible for soliciting bids to establish a contract for the purchase of large lamps by state agencies and other eligible users. Petitioner is a Florida corporation and the incumbent vendor under similar contracts for the preceding 10 years. Petitioner does not manufacture lamps. Petitioner sells lamps manufactured by Osram-Sylvania ("Sylvania"). Intervenor is an Ohio corporation doing business in Florida. Intervenor manufactures the lamps it sells. The ITB On March 15, 1996, Respondent issued Invitation To Bid Number 39-285- 400-H, Lamps, Large, Photo and STTV (the "ITB"). The purpose of the ITB is to establish a 24 month contract for the purchase of Large Lamps (fluorescent, incandescent, etc.), Photo Lamps (audio visual, projection, flash), and Studio, Theatre, Television, and Video Lamps ("STTV") by state agencies and other eligible users. The contract runs from July 10, 1996, through July 9, 1998. The ITB estimates the contract price at $3,692,499. The ITB contains General and Special Conditions. General Conditions are set forth in 30 numbered paragraphs and elsewhere in DMS Form PUR 7027. Special Conditions are set forth in various unnumbered paragraphs in the ITB. General Conditions Paragraphs 5, 11, and 24 of the General Conditions are at issue in this proceeding. The terms of each paragraph are: 5. ADDITIONAL TERMS AND CONDITIONS: No additional terms and conditions included with the bid response shall be evaluated or considered and any and all such additional terms and conditions shall have no force and effect and are inapplicable to this bid. If submitted either purposely through intent or design or inadvertently appearing separately in transmittal letters, specifications, literature, price lists, or warranties, it is understood and agreed the general and special conditions in this bid solicitation are the only conditions applicable to this bid and the bidder's authorized signature affixed to the bidder's acknowledgment form attests to this. 11. QUALITY ASSURANCE: The contractor, during the contract term, upon mutual agree- ment with the Division of Purchasing, will provide reasonable travel and lodging accommodations for one (1) to three (3) government employees to perform an on-site inspection of the manufacturing process(es) and review of the manufacturer's product quality control(s) and total quality manage- ment program(s). The contractor will reim- burse the State for actual transportation cost, per diem and incidental expenses as provided in Section 112.061, F.S. It is the State's desire that the contractor provide demonstration of quality control for improvement rather than post production detection. 24. FACILITIES: The State reserves the right to inspect the bidder's facilities at any reasonable time with prior notice. Included Items Special Conditions in the ITB require bidders to submit prices for "Item 1" and "Item 2" lamps ("included items"). 1/ Item 1 lamps consist of Group 1 and 2 lamps. Group 1 lamps are Large Lamps such as fluorescent, incandescent, quartz, mercury vapor, metal halide, and high-pressure sodium lamps. Group 2 lamps are Photo Lamps such as audio visual, projection, flash, and STTV lamps. The total price for each group is multiplied by a weighted usage factor. The product calculated for Group 1 is added to the product calculated for Group 2 to determine the total price for Item 1 lamps. Item 2 consists of a category of lamps described as "T- 10 Lamps." The total price for Item 2 lamps is determined without application of the weighted usage factor used for Item 1 lamps. The total price for Item 2 lamps is a de minimis portion of the contract price. Special Conditions in the ITB require Respondent to award a single contract for included items to a single bidder. Special Conditions state that, "During the term of the contract established by this bid, all purchases of items will be made from the successful bidder." 2/ Excluded Items Special Conditions require that, "The bidder shall offer a fixed discount from retail prices on all excluded items." Excluded items include high technology lamps. The requirement for a fixed discount on excluded items is not considered in evaluating bid prices for included items. Rather, the requirement is intended to reduce the state's cost for both included and excluded items by assuring a meaningful discount on excluded items. Formatting Requirements Special Conditions prescribe the format in which bids must be submitted. Price lists and authorized dealers' lists are required to be submitted in hard copy and on computer diskette. The format prescribed for computer diskette includes requirements for font and graphics. The Special Conditions state that, "Failure to comply with this requirement will result in disqualification of your bid." The Bids The ITB prohibits the alteration of bids after they are opened. Respondent opened bids on April 10, 1996. Seven vendors submitted bids in response to the ITB. Included Items Four vendors, including Petitioner, submitted a bid for both Item 1 and Item 2 lamps. Intervenor and two other bidders did not submit a bid for Item 2 lamps. General Conditions Intervenor deleted paragraphs 11 and 24 of the General Conditions from its bid. At the direction of Intervenor's legal department in Cleveland, Ohio, Intervenor's regional sales manager struck through paragraphs 11 and 24 and initialed the deletions. The deletions are consistent with Intervenor's corporate policy. Intervenor routinely objects to contract provisions requiring inspection of Intervenor's facilities. Excluded Items Petitioner's bid includes a fixed discount of 44 percent on excluded items. Intervenor's bid includes a fixed discount of 0 percent. Formatting Requirements Intervenor included the information required by the ITB on the diskette it submitted with its bid. However, Intervenor supplied the information in Courier 12 characters per inch ("cpi") font, not the Courier 10 cpi font prescribed in the ITB. Proposed Agency Action Respondent determined that Intervenor's bid was responsive. The purchasing specialist for Respondent who reviewed each bid to determine if it was responsive failed to observe the deleted paragraphs in Intervenor's bid. The purchasing specialist forwarded those bids determined to be responsive to the purchasing analyst assigned by Respondent to: determine if the lamps offered in each bid met the specifications prescribed in the ITB; and evaluate bid prices. The purchasing analyst noted that paragraphs 11 and 24 were deleted from Intervenor's bid. The purchasing analyst and purchasing specialist conferred. They determined that paragraph 5 of the General Conditions cured Intervenor's deletions without further action. The purchasing analyst correctly determined: that lamps offered by Petitioner and Intervenor met ITB specifications; that Intervenor's bid is the lowest bid for Item 1 lamps; that Petitioner's bid is the second lowest such bid; and that Petitioner's bid is the lowest bid for Item 2 lamps. Petitioner's bid for Item 1 lamps is approximately five percent greater than Intervenor's bid. Respondent proposes to award one contract for Item 1 lamps to Intervenor. Respondent proposes to award a second contract for Item 2 lamps to Petitioner. At 4:00 p.m. on May 20, 1996, Respondent posted its intent to award the contract for Item 1 lamps to Intervenor. Petitioner timely filed its formal protest on June 3, 1996. Respondent did not award a contract for excluded items. Respondent's failure to award a contract for excluded items is not at issue in this proceeding. Arbitrary Respondent's proposed award of a contract to Intervenor for substantially all of the items included in the ITB is a decisive decision that Respondent made for reasons, and pursuant to procedures, not governed by any fixed rule or standard prescribed either in the ITB or outside the ITB. Respondent's proposed agency action is arbitrary. Excluded Items The requirement for bidders to offer a fixed discount on excluded items operates synergistically with the requirement for Respondent to award a single contract on included items to a single bidder. The combined action of the two requirements operating together has greater total effect than the effect that would be achieved by each requirement operating independently. The requirement for a fixed discount on excluded items, operating alone, may not induce a bidder who could receive a contract solely for Item 2 lamps to offer a discount that is as meaningful as the discount the bidder might offer if the bidder were assured of receiving a contract for Item 1 and 2 lamps upon selection as the lowest bidder. 3/ By assuring bidders that a single contract for Item 1 and 2 lamps will be awarded to a single bidder, the ITB creates an economic incentive for bidders to provide a meaningful discount on excluded items. Respondent frustrated the synergy intended by the ITB by applying the requirements for a fixed discount and for a single contract independently. Respondent penalized the bidder conforming to the requirement for a fixed discount on excluded items by awarding only a de minimis portion of the contract to the bidder. Respondent rewarded the bidder not conforming to the requirement for a fixed discount on excluded items by awarding substantially all of the contract to that bidder. If Respondent elects to purchase all excluded items from Petitioner, Respondent will have used the contract for Item 1 lamps to induce a meaningful discount from Petitioner without awarding Petitioner with the concomitant economic incentive intended by the ITB. Such a result frustrates the ITB's intent. Paragraph 5 Respondent's interpretation of paragraph 5 fails to explicate its proposed agency action. Respondent's interpretation of paragraph 5: leads to an absurd result; is inconsistent with the plain and ordinary meaning of the terms of the ITB; and is inconsistent with Respondent's actions. Respondent's interpretation imbues paragraph 5 with limitless curative powers. Respondent's interpretation empowers paragraph 5 to cure the deletion of all General Conditions in the ITB whether stricken by pen or excised with scissors. Respondent's interpretation of paragraph 5 would transform a bid containing no General Conditions into a responsive bid. Respondent's interpretation of paragraph 5 is inconsistent with the plain and ordinary meaning of its terms. Paragraph 5 operates to cure "additional" terms. It does not operate to restore deleted terms. Respondent's interpretation of paragraph 5 is inconsistent with Respondent's actions. Respondent did not rely on paragraph 5 to cure Intervenor's deletions without further action. Respondent took further action to cure the deletions. Further Action On the morning of May 20, 1996, the purchasing analyst for Respondent telephoned Intervenor's regional sales manager. The purchasing analyst demanded that Intervenor accept the conditions Intervenor had deleted from its bid by submitting a letter of acceptance before the bid tabulations were posted at 4:00 p.m. on the same day. The regional sales manager contacted Intervenor's corporate headquarters in Cleveland, Ohio. Intervenor authorized the regional sales manager to accept the deleted paragraphs. By letter faxed to Respondent at approximately 3:20 p.m. on May 20, 1996, Intervenor accepted the paragraphs it had previously deleted. The letter stated that, "GE Lighting [will accept] the Contract Conditions noted in Paragraphs 11 and 24 of the Lamp Quotation." [emphasis not supplied] At 4:00 p.m. on May 20, 1996, Respondent posted the bid tabulation form. The bid tabulation form stated that the "award is contingent upon General Electric's acceptance of all the terms in conditions (sic)" in the ITB. Respondent argues that the purchasing analyst who contacted Intervenor on the morning of May 20, 1996, exceeded her authority. Respondent characterizes the word "contingent" in the bid tabulation form as "poorly written" and a "bad word." Agency Construction Of ITB Terms Respondent construes terms in the ITB in a manner that is inconsistent with their plain and ordinary meaning. The ITB requires that, "The bidder [shall] offer a fixed discount from retail price list on all excluded items." [emphasis supplied] Respondent interprets the quoted provision as meaning the bidder may offer such a fixed discount if the bidder elects to do so. The purpose of the ITB is to establish "[a] 24 month contract" to supply large lamps to the state. [emphasis supplied] Respondent interprets the quoted provision as meaning that the purpose of the ITB is to establish two contracts. The ITB states that, "During the term of the contract established by this bid, all purchases of items [will] be made from [the] successful bidder." [emphasis supplied] Respondent interprets the quoted provision as meaning that purchases of some items will be made from one successful bidder and that purchases of other items will be made from a second successful bidder. The ITB states that the contract "[shall] be made statewide on an all or none basis" to the responsive bidder who satisfies the conjunctive requirements for: "[the] lowest "Award Figure Item (1; [and] lowest Award figure for Item (2." [emphasis supplied] Respondent interprets the quoted provision as meaning that separate contracts may be made statewide on less than an all or none basis to separate responsive bidders who satisfy the disjunctive requirements for either the lowest bid for Item 1 lamps or the lowest bid for Item 2 lamps, or both. The ITB requires offers to be submitted for all items listed within a group for a bid to qualify for evaluation. Respondent interprets the requirement as meaning that a bidder who does not qualify for evaluation for all of the groups in the contract nevertheless qualifies for evaluation for the contract. Finally, the ITB states that failure to comply with the formatting requirements for the diskette "[will] result in disqualification of your bid." [emphasis supplied] Respondent interprets the quoted language to mean that failure to comply with prescribed formatting requirements may result in disqualification of a bid. The interpretations of the quoted terms proposed by Respondent, individually and collectively, frustrate the purpose of the ITB. They also ignore material requirements of the ITB. Material Deviation Respondent deviated from the rule or standard fixed in the ITB in several respects. First, Respondent altered the bid evaluation procedure prescribed in the ITB. Second, Respondent ignored the requirement to award a single contract to a single bidder. Third, Respondent ignored the requirement that bidders provide a fixed discount on excluded items. Fourth, Respondent ignored the requirement to comply with the formatting requirements prescribed in the ITB. Each deviation from the rule or standard fixed in the ITB is a material deviation. Each deviation gives Intervenor a benefit not enjoyed by other bidders. Each deviation affects the contract price and adversely impacts the interests of Respondent. 4/ 5.5(a) Benefit Not Enjoyed By Others Intervenor enjoyed a benefit not enjoyed by other bidders. Intervenor obtained a competitive advantage and a palpable economic benefit. Respondent altered the bid evaluation procedure prescribed in the ITB. On the morning of May 20, 1996, Respondent disclosed the bid tabulations to Intervenor alone, 5/ gave Intervenor an opportunity that lasted most of the business day to determine whether it would elect to escape responsibility for its original bid, allowed Intervenor to cure the defects in its bid, accepted Intervenor's altered bid, and conditioned the bid tabulations on Intervenor's altered bid. Respondent used a bid evaluation procedure that is not prescribed in the ITB and did not allow other bidders to participate in such a procedure. 6/ In effect, Respondent rejected Intervenor's initial bid, with paragraphs 11 and 24 deleted, and made a counter offer to Intervenor to accept a bid with paragraphs 11 and 24 restored. Intervenor accepted Respondent's counter offer. Respondent excluded other bidders from that process. Respondent gave Intervenor an opportunity to determine whether it would elect: to escape responsibility for its original bid by declining Respondent's counter offer; or to perform in accordance with an altered bid by restoring paragraphs 11 and 24. A bidder able to elect not to perform in accordance with its bid has a substantial competitive advantage over other bidders unable to escape responsibility for their bids. 7/ Respondent awarded substantially all of the contract to Intervenor even though Intervenor failed to provide a meaningful discount on excluded items. Respondent provided Intervenor with a palpable economic benefit. 5.5(b) Bid Price And Adverse Impact On The State Respondent did not award a contract for excluded items. Respondent's proposed agency action allows Respondent to purchase excluded items from either Intervenor or Petitioner. If Respondent were to purchase all of the excluded items it needs from Intervenor, Respondent could pay substantially more for excluded items than Respondent would save from the five percent price advantage in Intervenor's bid for Item 1 lamps. In such a case, Respondent's proposed agency action would effectively increase costs to the state that are inherent, but not stated, in the ITB. 8/ Conversion of incorrectly formatted data to the required font shifts prices to incorrect columns and causes other problems in accessing information in the diskette. Such problems can not be rectified easily but require substantial time and effort. Responsive Bidder Respondent did not award the contract intended by the ITB to the lowest responsive bid. Although Intervenor's bid is the lowest bid for Item 1 lamps, it is not the lowest responsive bid for Item 1 and 2 lamps. Petitioner's bid is the lowest responsive bid for Item 1 and 2 lamps. 9/ Respondent is statutorily required to award the contract to the lowest responsive bidder. 10/ Illegal Intervenor's bid is not responsive within the meaning of Sections 287.012(17), Florida Statutes (1995). 11/ It does not conform in all material respects to the ITB. Intervenor's unaltered bid deletes paragraphs 11 and 24. It does not include a fixed discount on excluded items, does not include a bid for Item 2 lamps, and does not conform to the formatting requirements in the ITB. Section 287.057 requires Respondent to award the contract to the bidder who submits the lowest responsive bid. Respondent has no authority either: to consider bids that are not responsive; or to award the contract to a bidder other than the lowest responsive bidder. Respondent's attempt to engage in either activity is ultra vires and illegal. Minor Irregularities The ITB encourages, but does require, bidders to include quantity discounts for Item 1 and 2 lamps. Petitioner's bid does not include quantity discounts. Petitioner's bid does not fail to conform to material requirements in the ITB. Petitioner does not manufacture Item 1 and 2 lamps. Sylvania manufactures the lamps Petitioner sells. Petitioner has no legal right to require Sylvania to allow inspection of its facilities pursuant to paragraph 11 of the General Conditions. Petitioner's ability to provide the requisite inspections requires the cooperation of Sylvania. Petitioner's bid requires payment by the state within 30 days of an invoice. Section 215.422 and the ITB provide that Respondent has 40 days to issue warrants in payment of contract debts and that interest does not accrue until after 40 days. The defects in Petitioner's bid are minor irregularities within the meaning of Florida Administrative Code Rule 60A-1.001(16). 12/ They neither affect the bid price, give Petitioner a competitive advantage, nor adversely impact Respondent's interests. Petitioner has the practical ability to arrange inspection's of Sylvania's facilities. Petitioner is legally responsible for failing to do so. Respondent's employees have never visited Sylvania's facilities during the 10 years in which Petitioner has been the contract vendor to the state. The requirement for payment within 30 days does not obviate the provisions of Section 215.422. Private contracts can not alter mutually exclusive statutory provisions.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order granting Petitioner's protest of Respondent's proposed agency action. RECOMMENDED this 26th day of September, 1996, in Tallahassee, Florida. DANIEL S. MANRY, 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 26th day of September, 1996.
Findings Of Fact In April 1995, DMS issued ITB #94/95-053 soliciting bids for providing an indefinite quantity of interior painting of buildings statewide. Bidders were to submit unit prices for ten categories of work in each of five districts. The unit prices were added together to arrive at a total for each of the five districts. The invitation to bid (ITB) contemplated the award of five contracts--one for each district. The contract was to be issued for one year with the anticipated renewals of one year each. The ITB provided that bids would be "evaluated and awarded to the responsible low bidder(s) per region." On May 1, 1995, DMS issued an addendum to the ITB. DMS issued the addendum to add the requirement for a bid bond or cashier's check in the amount of $5,000. The purchasing specialist in charge of the solicitation had inadvertently omitted the bid bond requirement from the ITB. The purpose of the bid bond is to compensate the agency for damages in the event the low bidder fails to enter the contract at issue. To underscore the importance of the bid bond requirement, DMS required that all bidders return a signed acknowledgment form with their bid. Ten bidders submitted bids on May 15, 1995. The lowest bidder for regions two through four was Brighton Painting Company (Brighton). Although the ITB provided that bids could only be withdrawn prior to bid opening, David Batts, who will be responsible for managing the contracts, contacted Brighton's president after the bid opening and questioned him because the contractor was based in Illinois. Based on that conversation, Mr. Batts determined that Brighton would not be able to adequately manage the contract while based out of state. Although the ITB provided that bids could only be withdrawn prior to bid opening, DMS allowed Brighton to withdraw its bid. Taul submitted the lowest bid for region one and the second low bid for regions two through five. J. F. Ward Painting and Decorating (Ward) submitted the third lowest bid for regions one, two, four and five. CEM Enterprises, Inc., d/b/a Sunshine Painting (CEM) submitted the third lowest bid for region three. The total of the unit prices submitted by Ward and CEM were higher than the total of the unit prices submitted by Taul. 1/ After the bid opening, all bids were reviewed by the agency purchasing office in order to determine responsiveness. Ms. Joyce Plummer is the purchasing officer for DMS, who was responsible for evaluating and awarding the contract. Ms. Plummer found no irregularities in her review of Taul's bid. After her review, Ms. Plummer provided Mr. Batts the three lowest bids for review by him. Mr. Batts reviewed the bids because he was the individual primarily responsible for preparing the ITB and because he would be the contract administrator once the contracts were awarded. On May 30, 1995, at 10:20 a.m., DMS posted a notice of intent to award the contract to Ward. The posting indicated that Taul's bid was disqualified for failure to submit a bid bond. Ms. Plummer posted the notice of intent to award the contracts to Ward based on the opinion of Mr. Batts that Taul had not submitted a valid bid bond. At the request of Mr. Taul, DMS Bureau Chief Wayne Smith reviewed Taul's bid bond and determined that it was responsive. At that time DMS had in its possession a letter from the surety agent affirming the surety's obligation in a minimum amount of $5,000 under the bid bond. 2/ Ms. Plummer therefore reconsidered the posting and spoke with another purchasing officer, Kathleen McKenzie. Ms. McKenzie had been employed by DMS longer than Ms. Plummer and she recalled a prior bid process in which a bid bond similar to Taul's had been accepted. McKenzie did not know at the time she gave her opinion that the contract in question was an indefinite quantity contract. As a result of the further inquiry into the sufficiency of Taul's bid bond, DMS posted an amended bid tabulation announcing its notice of intent to award the contracts to Taul. Sometime after the second posting, Mr. Ward called Mr. Batts to discuss the award to Taul. Mr. Batts advised Mr. Ward that, in his opinion, Taul's bid bond was no good. After this conversation with Mr. Batts, Ward filed a notice of intent to protest the award to Taul. When she received the notice of intent to protest filed by Ward, Ms. Plummer discussed the matter with DMS assistant general counsel. 3/ As a result of that discussion, Ms. Plummer posted a second amended tabulation indicating an award of all five regions to Ward. That tabulation subsequently also was amended to represent the award of the contract for region three to CEM. The first posting showing an intent to award to Ward was verified by Mr. Batts and Ms. Plummer. The second posting showing an intent to award to Taul was verified by Ms. Plummer. The third and fourth postings were verified by DMS general counsel. The bid security requirement in the ITB called for submission of a bid bond or a cashier's check in the amount of $5,000. The ITB also required bidders to commit to furnishing a $100,000 performance and payment bond if they were successful. In order to obtain a bid bond, a bidder must secure a commitment from the bonding company to issue a performance and payment bond. If the surety agrees to provide the payment bond, it will issue a bid bond without charge. Taul has been in the commercial painting business since 1978. For the past 8 years 95 percent of its work has been awarded by governmental entities pursuant to competitive bids. Taul has consistently expressed the intent to execute and perform the contracts in accordance with its bid in this case. In obtaining the bid bond in this case, Taul followed his standard practice--contacting the bonding agent and providing information regarding the nature of the contract and extent of commitment that would be required for the performance and payment bond. The bid specification for the bonds was given to and reviewed by the surety agent. The surety agent, David Pichard, was of the opinion that, since the ITB called for a performance bond in the amount of $100,000 and because the amount of the contract was indefinite, the amount of the bid upon which to issue the bid bond was $100,000. The standard bid bond requirement on public contracts is five percent. The plain wording of the bid bond submitted is that the sum of the surety obligation is "FIVE PER CENT (5 percent) OF AMOUNT BID." Since the contract to be awarded in this case is for an indefinite quantity of work, the "amount bid" is indeterminate. Petitioner was unable to establish, either prior to or at the final hearing, what the "amount of the bid" is. Mr. Batts was of the opinion that the amount of the bid bond was not clear. Based on that opinion, Mr. Batts believed that the bond did not meet the specification in the ITB. The purpose of the bid bond requirement was to ensure that DMS received considered bids. Due to the vagaries of the contract DMS wanted a contractor it could depend on to enter into the contract in case there was an emergency painting need such as storm damage. With a valid bid bond or a cashier's check the contractor could not unilaterally decide to walk away from the bid without leaving money on the table. The ITB addendum is clear and definite with respect to the required bid bond. Taul's bid bond is indefinite and not specific with regard to the amount of the bid bond furnished. Taul's bid bond was therefore not responsive with regard to the bid bond requirement. Petitioner has failed to prove that the agency acted arbitrarily, capriciously, fraudulently, or illegally, in determining that Petitioner's bid was materially not responsive to the requirements of the ITB at issue.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Respondent enter a Final Order dismissing Petitioner's formal bid protest. DONE and ORDERED this 11th day of September, 1995, in Tallahassee, Florida. JAMES W. YORK 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 11th day of September, 1995.
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.
