The Issue The issue in this proceeding is whether the proposed action of the Department with regard to procurement of the State of Florida Statewide Law Enforcement Radio Communications System, DMS Number 21-725-001-W, is contrary to the Department's governing statutes, rules, policies, or any applicable bid or proposal specification.
Findings Of Fact General Background Pursuant to Section 282.1095, Florida Statutes, the State of Florida established the State Agency Law Enforcement Radio Trust Fund (Trust Fund) in the Department to fund the construction, maintenance, or support of a statewide law enforcement radio system. On or about January 31, 2000, the Department issued RFP No. 21-725-001-W entitled "Statewide Law Enforcement Radio Communications System." The RFP sought proposals for providing the statewide law enforcement radio communication system. The purpose of the proposed radio system is to allow various state law enforcement officers to communicate from one end of the state to the other. Motorola was the vendor responsible for the construction and operation of Phases I and II of the radio system. In this procurement, the Department sought proposals for continued maintenance and operation of Phases I and II and completion of Phases III, IV, and V of the radio system. The Department sought "innovative proposals from the private sector that will result in a more economical and timely completion of a statewide radio communications system." The Department stated that it would "consider all approaches, methods, alternative technologies . . . provided that the proposal is reasonable, clearly achievable, and can be accomplished with minimal or no cost to the State of Florida to the extent permitted by law." On March 7, 2000, Com-Net and Motorola submitted proposals in response to the RFP. Com-Net and Motorola were the only two vendors that submitted proposals. On April 4, 2000, the Department posted a notice terminating the RFP and declared both proposals non-compliant. On April 5, 2000, the Department sent a letter to Com- Net and a letter to Motorola, advising each vendor of the major areas of the proposals deemed non-responsive. The letters also informed the vendors that the Department had determined to follow a negotiation process pursuant to Section 287.057(4), Florida Statutes. On April 10, 2000, the Department sent a letter to Com- Net and a letter to Motorola, advising each vendor of the procedures for the negotiation process. The letters included a list of questions and vendor evaluation guidelines and advised the vendors to bring their proposals into compliance with the specifications and requirements of the terminated RFP document. The April 10, 2000 letters also advised Com-Net and Motorola that the Department reserved the right to negotiate concurrently or sequentially with the vendors. On April 19, 2000, Com-Net and Motorola each submitted responses to the questions in the Department's April 10, 2000 letters, revisions to technical and financial proposals, and other information. After Motorola and Com-Net submitted their respective modified proposals on April 19, 2000, the Department conducted an initial meeting on May 12, 2000, with both vendors to provide further direction on how the negotiation process would work and to answer questions. At the May 12, 2000 meeting, the Department introduced a five-member evaluation team. The Chairman of the evaluation team, Roy Cales, explained to the proposers that there would be an evaluation process followed by a negotiation process. During that process, focus would initially be on the technical proposals, while later consideration would focus on cost proposals. Each member of the evaluation team brought different relative strengths and perspectives to the decision process. Kourosh Bastani's primary expertise was technical. As the coordinator of Phase I and II, field manager of the radio system, and twenty years' experience in the Florida Highway Patrol, Captain Keith Gaston brought the skills and perspective of a system user and manager. Lisa Saliba has an extensive background in state budgeting, planning, and coordination of projects with agencies. Rick Blankenship is an investment banker and brought considerable financial expertise to the process. As Chairman of the evaluation committee and Chief Information Officer for the State of Florida, Roy Cales possesses technical expertise and experience with state procurement of technology products. The evaluation team was assisted by a technical advisory team composed of technical experts employed by the state, Bruce Meyers and J.P. Saliba, and external technical consultants, Jeff Ellis and Mike Thayer of the Gartner Group. From May 12, 2000 to June 22, 2000, representatives of the evaluation team and technical advisory team met on several occasions with the proposers, both individually and together. During these meetings, the parties engaged in discussions regarding changes to both technical/financial aspects of the proposals and potential contract. After the series of meetings with one or both vendors present, the evaluation team met in private on June 22, 2000, to review the proposals one last time and to make certain all team members understood the financial aspects of both proposals. On June 23, 2000, the evaluation team met in public and voted to rank Com-Net's proposal first and Motorola's proposal second, and to negotiate sequentially beginning with Com-Net. On that same day, the Department posted notice of its proposed agency action which stated that if the negotiations with Com-Net were successful, a contract would be awarded to Com-Net. If the negotiations with Com-Net were not successful, the Department would proceed to negotiate with Motorola and, if successful, a contract would be awarded to Motorola. On July 10, 2000, Motorola filed its Petition to Formally Protest Decision to Negotiate Sequentially, and Initially, with Com-Net Ericsson Critical Radio Systems, Inc. The sole relief sought by Motorola in its Petition is a final order "declaring that the Department is required to conduct concurrent negotiations with both Com-Net and Motorola . . . and that Motorola be ranked No. 1." On or about July 19, 2000, the Department referred Motorola's protest to the Division of Administrative Hearings and requested that an Administrative law Judge be assigned to conduct a hearing. On August 9, 2000, the Administrative Law Judge entered an Order granting the Petition of Com-Net to intervene in this proceeding. The Evaluation Process Motorola's Allegations The Department terminated the RFP with its April 4, 2000 posting, and any specific scoring or weighting stated in the RFP. The Department's April 10, 2000 letter, explicitly advised that the state would use the attached evaluation criteria only as a "negotiation guideline" and that "these guidelines may not be all-inclusive of the criteria to be considered. Further not all of these criteria will necessarily be considered with the same weighting." Motorola, in its Petition acknowledges that it "was directed [by the Department's April 10, 2000 letter] to forget the RFP, think out of the box, and be creative." By Motorola's own admission, the Department's clear direction to "forget the RFP" and "think out of the box" put Motorola squarely on notice that the RFP was at most a guideline in the Section 287.057(4), Florida Statutes, negotiation process. In internal e-mails, Motorola personnel stated that the Department had "given us the opportunity to change the assumption of our models, get outside the bounds of the RFP and find ways to reduce costs . . . ." Motorola understood that in addition to its response to the April 10, 2000 letter, it had the opportunity to submit technical and financial alternatives "outside the boundaries of the RFP and current technical question submittals." Motorola cited no provision which would prohibit the Department from disregarding the RFP and negotiating in the best interests of the state. Motorola alleged that the Department impermissibly permitted Com-Net to materially alter its proposal after the April 19, 2000 deadline for re-submission of modified proposals during "improper negotiations not in accordance with the procedures set forth in the April 10, 2000 letter." Motorola, however, presented no evidence at hearing as to what "improper negotiations" occurred. The evidence presented does establish that Motorola availed itself of an opportunity to significantly change its April 19, 2000 cost proposal. A simple comparison of Motorola's April 19, 2000 and June 22, 2000, cost proposals reveals substantial differences. Motorola did not establish at any time in this proceeding an absence of Department authority to allow proposers to change their proposals after April 19, 2000. Both proposers were clearly on notice that the Department was seeking changes to the proposals. Both proposers were informed of the process and had an equal opportunity to respond. There was no advantage to one proposer over another when the Department sought modifications to proposals during the negotiation process under Section 287.057(4), Florida Statutes. Evaluation Team Determination Four out of five members of the evaluation committee voted for sequential negotiations and ranked Com-Net first and Motorola second. The only member of the evaluation committee who did not rank Com-Net first and vote for sequential negotiations was Kourosh Bastani. Mr. Bastani ranked Motorola first and voted for concurrent negotiations, although he acknowledged that the rankings were meaningless in concurrent negotiations. He had concerns about both proposals, describing Motorola's technical proposal as "acceptable" and Com-Net's technical proposal as "viable," yet believed that both vendors "provided good proposals, and they were worthy of further consideration." Despite being the only team member who did not rank Com-Net first and vote for sequential negotiations, Mr. Bastani unequivocally expressed his belief in the fairness of the evaluation process and respect for the votes of the other members by stating: I believe that the process provided me an opportunity to objectively review both proposals and provide an opportunity for both vendors to provide clarifications and answer questions. And I was able to, in a fair and objective manner, arrive at my decision. So I believe in the integrity of the process, whether I agree with their vote or not, I think they reached it in an informed manner. Mr. Bastani could think of no basis or prejudice in the process that would undermine the validity of the decision. Captain Gaston voted to negotiate sequentially with Com-Net first because he felt the cost difference between Motorola and Com-Net was so great it was unlikely Motorola was going to get within the "ballpark." His interest is in securing a contract as quickly as possible and he believed concurrent negotiations would delay the final outcome. Ms. Saliba voted to negotiate sequentially with Com-Net first because she wanted the opportunity to concentrate on negotiations with a single vendor without the distraction of lobbying and external communications from representatives of competing vendors. In addition to the cost factor, she favored Com-Net because Com-Net is attempting to gain a "foot-hold" in the industry through this contract to establish itself as a credible provider and therefore is committed to reaching an agreement that will satisfy the state's needs. She did not have that confidence in Motorola. Mr. Cales voted to negotiate sequentially with Com-Net first based on a determination of the overall best value for the state. He informed the vendors from the beginning of the evaluation process that if one stood out above the other, the negotiations would be sequential. In that circumstance, concurrent negotiations would have penalized the vendor that stood out and Mr. Cales determined that Com-Net stood out. Additionally, in Mr. Cales' view, concurrent negotiations (e.g., double sessions with a single DMS negotiation team) would take twice as long and time is a critical factor. Com-Net's proposal stood out because it guaranteed a system that would do the job, guaranteed a cost within the trust fund revenue stream and guaranteed the state would have the level of service it would contract for without additional cost to the state. Motorola's proposal did not provide those guarantees. In fact, the only way the Motorola proposal would not cost the state millions of dollars more than Com-Net would be if projected tower lease revenue was realized, and those projections were unreasonable and unsubstantiated in Mr. Cales' assessment. Mr. Blankenship voted to negotiate sequentially with Com-Net first based on a determination that doing so would be in the best interests of the state because Motorola required the state to assume risk while Com-Net did not; Motorola required the state to borrow money which was not authorized; Motorola's proposal entailed operating at a deficit for years three through seventeen; Motorola's tower revenue projections were unreasonable and unreliable; and Com-Net's proposal included technology refreshers that Motorola did not. Technical Proposals After several meetings with both vendors to review their technical proposals and after considering the input of the technical committee, the evaluation team determined that the two technical proposals were either equivalent or that, if not equivalent, both vendors could do the job. The responsiveness of both vendors' technical proposals is not at issue in this proceeding. Both vendors met any "threshold" requirements in the Department's April 10, 2000 letter, and were eligible to be considered for negotiation. Cost Proposals Motorola alleges that the Department "failed to properly calculate the cost to the State of Motorola and Com- Net's proposals," and the Department "improperly assigned a zero revenue figure to the revenue sharing financial component of Motorola's June 22, 2000 financial proposal." Both Com-Net and Motorola submitted cost proposals on April 19, 2000, and submitted revised cost proposals on June 22, 2000. Both Com-Net and Motorola outlined modifications to their respective cost proposals during meetings with the Department evaluation team on June 22, 2000. The major components of both vendors' cost proposals are similar, including up-front cash payments from the vendor to the state, an initial first-year payment from the state to the vendor of a portion of the current balance in the Trust Fund, continuing payments from annual Trust Fund revenues to the vendors, and sharing with the state of revenues that the vendors expect to derive by renting excess tower space to third party users of "tower tenants." While the major components in the two proposals are similar, the dollar figures and guarantees differ substantially. The proposals can be fairly summarized based on the major components which most greatly affect the cost to the state. On April 19, 2000, Com-Net's proposal was for revenue sharing to the state of 33 percent, an initial capital contribution from Com-Net to the state for tower upgrade and enhancement, an initial payment to Com-Net of $39 million from the current Trust Fund balance, and annual payments to Com-Net of all Trust Fund revenues, plus $2 million per year. On June 22, 2000, Com-Net reduced the revenue sharing component to 15 percent, eliminated the $2 million per year payment, and proposed to charge the state the annual net revenues from the Trust Fund. Com-Net represented to the evaluation team that this proposal would give the state its "entire wish list within the confines of the trust fund." Com-Net proposed to build, operate, and maintain the radio system for no more than the amount of the current balance and annual revenues in the Trust Fund. Steve Savor, Chief Executive Officer of Com-Net, told the evaluation team on June 22, 2000: We want you to be in a position where you do not have to go back to the Legislature. We are guaranteeing a position where we do not come back to you. Regardless of whether the state ever receives a single dollar of revenue sharing, it can obtain the radio system from Com-Net without exceeding the confines of the Trust Fund. The total cost to the state of Com-Net's June 22, 2000 proposal as calculated by the evaluation team was approximately $331 million. Com-Net's June 22, 2000 proposal included an initial contribution from Com-Net to the state of $20 million, a first-year payment to Com-Net from the Trust Fund of $39 million, and annual payments from the state to Com-Net of all future Trust Fund revenues over twenty years totaling $348 million. Com-Net also proposed to include two features not included in Motorola's June 22, 2000, proposal - a mobile data system valued between $25 million to $40 million and "technology refreshes" valued between $10 million and $50 million. Motorola's April 19, 2000 cost proposal included two alternates. The cost of the primary proposal was approximately $80 million more than the cost of the alternate. Motorola acknowledges that its cost proposal as of April 19, 2000 was "considered outrageous" by the Department. At the June 22, 2000 evaluation team meeting, Motorola presented a revised cost proposal which it explained to the team. Motorola proposed a total cost of $418 million. This figure exceeded the projected Trust Fund revenues of $348 million by $70 million. Because the proposed annual payments to Motorola would exceed available monies to the state in the early years, Motorola proposed to loan the state the funds to cover these shortfalls, and charge the state an estimated total of $55 million in interest. In that the interest cost is only an estimate and funds available to the state could differ from that projected by Motorola, the actual interest cost to the state could increase. Motorola's witness, David Kliefoth, testified that despite the cost of $418 million offered to the Department in Motorola's June 22, 2000 proposal for the project, Motorola's real or "net" price is actually $364 million. Even after making adjustments to the costs of both proposals, Mr. Kliefoth admitted that Motorola's "net price" was $34 million more than Com-Net's price. In order to pay for the radio system, Motorola proposed three sources of funds: i) Trust Fund current balance and projected annual revenues of $348 million, ii) revenue sharing from third party tower rentals of $68 million, and iii) an initial cash contribution from Motorola of $32 million, for a total of $448 million. Although the annual Trust Fund revenues are not sufficient to cover the annual payments to Motorola, the company contends that its proposal provides the state with ample revenue sharing that will allow the state to have a $30 million positive balance in the Trust Fund at the end of twenty years. Yet, despite repeated requests by the evaluation team, Motorola failed to guarantee the projected amount of revenue sharing required to "make the deal work" within the confines of the "Trust Fund. As Motorola representatives told the evaluation committee on June 22, 2000, if Motorola's projected third party tower rental revenues or the projected Trust Fund revenues did not materialize, the state would be expected to make up the difference. The most Motorola was willing to do was to say they "could talk about it." As a basis for its third party tower rental revenue projections, Motorola told the evaluation team on June 7, 2000, that its tower company partner, Pinnacle Tower, had an average of 4.9 tenants per tower nationally and an average of 3.9 tenants per tower in Florida. On June 22, 2000, just two weeks later, Motorola doubled the estimate, claiming that Pinnacle Tower would average 10 tenants per tower in Florida. Motorola raised its estimate without any explanation and despite the fact that tower industry financial research analysts, such as Lehman Brothers, limit their estimates to a more conservative five tenants per tower. In contract to Motorola, Com-Net used a more conservative figure of 1.1 to 2.4 tenants per tower when estimating future third party tower rental revenues. As Com-Net stated to the evaluation team at its June 22, 2000 meeting, third party revenues are "speculative at best." Because they considered both vendors' projections of potential future revenues to be speculative and because neither vendor could guarantee the projections, the evaluation team decided to disregard both vendors' revenue sharing projections and evaluate both proposals based on cost alone. On that basis, the evaluation team determined that the Motorola proposal would be significantly more expensive to the state. Depending on how the proposals were viewed and the assumptions made, most of the evaluation team members determined that the Com-Net proposal would cost the state approximately $91 million less than the Motorola proposal. Each of the evaluation team members decided that the two technical proposals were either equivalent or that, while not equivalent, both vendors could do the job. Having determined that both proposers could do the job, the paramount consideration for most team members became cost. Motorola's internal e-mails demonstrate that it fully understood the importance of cost to the state. Motorola's June 9, 2000 internal e-mail states that the evaluation committee "continues to place higher percentage priority on cash flow of the trust fund and revenue sharing funds versus technology, system performance and long-term maintenance" and that "the State is trying to back into the completion of [the radio system] by using funds available and doing the best they can [to] reduce the scope of work and technology if that's what it takes to finish the State buildout." Motorola alleges that the Department impermissibly altered Motorola's financial proposal such that Motorola's true financial proposal was not fairly considered. Specifically, Motorola argues that the evaluation team disregarded Motorola's revenue-sharing projections by assigning a zero revenue figure. Yet Motorola points to no statute, rule, or policy which would prohibit the Department from such flexibility in evaluating the proposals. Motorola refused to guarantee the revenue-sharing projections and the Department was free to accept or reject such projections. Motorola also complains that the evaluation committee did not inform Motorola of its decision to disregard revenue-sharing projections; yet again Motorola points to no authority imposing an obligation on the committee to do so. The evaluation team treated Motorola and Com-Net equally in this regard by ignoring both vendors' revenue projection and focusing instead on cost. The team recognized the risks and speculation involved in predicting market conditions and revenue streams twenty years into the future. Motorola also alleges that it was told to provide a stronger revenue-sharing model, and thus having been explicitly solicited, its revenue-sharing projections should not be disregarded. However, Mr. Cales established in his testimony that what he asked for was not a higher percentage of revenue sharing or for the state to bear more risk, but rather by "stronger model" he meant he wanted to see the numbers and assumptions behind the projections. Mr. Cales was especially concerned that Motorola kept changing its projected tower revenue figures and that except for changes in the sharing percentage, the total revenue projections should not change. At 6:51 p.m., on June 22, 2000, Motorola transmitted by e-mail to a Department technical consultant additional information from Pinnacle Tower relating to tower tenants. At the time of the e-mail the evaluation team was in session and the team did not know of the information that night. Some of the team members saw it at some point, but the information would not have affected their votes. Pinnacle Tower had a full opportunity to state its case for tower revenues at the June 7, 2000, meeting and at that time projected only five tenants per tower. Moreover, Pinnacle Tower was present at the meeting site on June 22, 2000, but Motorola elected not to have them present in the meeting room even though Motorola understood the team had serious concerns about the revenue projections. As Mr. Cales made clear in his testimony, the last-minute information from Pinnacle Tower concerning tenant projection did not resolve concerns over the substantial increases in projections or their speculative nature. Further as to Motorola's tower revenue projections of June 22, 2000, Mr. Bastani believed the projection of 10 tenants per tower was unrealistic. The other team members likewise did not accept Motorola's assumption that it would achieve 10 tenants per tower. Ultimate Findings of Fact Motorola's June 22, 2000 proposal did not guarantee that the cost of the contract would be within the revenue from the Trust Fund. Motorola's projections of revenue from tower leases was not reliable and was not guaranteed by Motorola. Com-Net's cost proposal of June 22, 2000, was substantially less costly than Motorola's proposal and provided a guarantee that the cost of the contract would not exceed the revenue from the Trust Fund. The decision to negotiate sequentially beginning with Com-Net was logical and reasonable.
Recommendation Based upon the findings of fact and conclusions of law, it is RECOMMENDED: That the Department of Management Services enter a final order denying Motorola's protest. DONE AND ENTERED this 3rd day of October, 2000, in Tallahassee, Leon County, Florida. DON W. DAVIS 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 3rd day of October, 2000. COPIES FURNISHED: C. Everett Boyd, Jr., Esquire Melissa Fletcher Allaman, Esquire Ervin, Varn, Jacobs & Ervin Post Office Drawer 1170 Tallahassee, Florida 32302 W. Robert Vezina, III, Esquire Mary M. Piccard, Esquire Vezina, Lawrence & Piscitelli, P.A. 318 North Calhoun Street Tallahassee, Florida 32301 William E. Williams, Esquire J. Andrew Bertron, Jr., Esquire Huey, Guilday & Tucker, P.A. 106 East College Avenue, Suite 900 Tallahassee, Florida 32301 Alan C. Sundberg, Esquire Mark K. Logan, Esquire Smith, Ballard & Logan, P.A. 403 East Park Avenue Tallahassee, Florida 32301 Shari M. Goodstein, Esquire Shipman & Goodwin, LLP One Landmark Square Stamford, Connecticut 06901 Pennington G. Kamm, Esquire Terry A. Stepp, Esquire Office of the General Counsel Department of Management Services 4050 Esplanade Way, Suite 260 Tallahassee, Florida 32399-0950 Bruce Hoffmann, General Counsel Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950 Cynthia Henderson, Secretary Department of Management Services 4050 Esplanade Way Tallahassee, Florida 32399-0950
Findings Of Fact At all times pertinent to the issues herein, the Respondent, Department of Transportation, (Department), was the state agency regulating the utilization of the state highway system by commercial vehicles. The Petitioner, Consolidated Freightways, (Consolidated), is a long haul interstate carrier operating in forty-eight states, including Florida. It has a freight terminal in Brooksville, Florida, a city approximately 11 miles west of I-75 which it has used since December 1, 1986. On October 24, 1990, Andrew J. Gay, Jr., Petitioner's Southern Area Safety Supervisor, requested tandem trailer access to its terminal facilities in Brooksville, via a route over State Road 50 from its intersection with I-75 to the old Dade City highway, then over that road to the terminal. The application indicated the proposed route would be used for on the average of 10 round trips per 7 day week, during the approximate hours of from 2:00 AM to Noon. Upon receipt at the Department, the file was forwarded to the District Operating Engineer in the Department's District VII office in Tampa, that office responsible for supervision of operations in the pertinent area, where it was given to Kevin Dunn, an assistant civil engineer, for evaluation. This was the first evaluation such as this that Mr. Dunn had made. In accomplishing the evaluation, he relied upon a department directive, TOPIC NO. 750-010-050-C; effective November 21, 1990, good to May 21, 1991, entitled, EVALUATION OF PROPOSED TANDEM TRAILER TRUCK ROUTES, in which, at PROCEDURE; (4)(B) 1 & 2, rejection criteria, including vehicular safety and highway safety considerations, are listed. Section (4) of the Directive deals with Terminal Access Route Evaluation Standards, and provides that when an operator of a terminal facility located more than 5 miles from the tandem trailer truck highway network submits a request for access routing, it shall be for the shortest route available, and shall be evaluated utilizing the rejection criteria outlined which indicate that a request may be rejected when one of the criteria for rejection are met, but shall be rejected when two or more are met. Mr. Dunn considered that one of the vehicular safety considerations was met as was one of the highway safety considerations. The former, he felt, authorizes rejection when: The total combined length of high accident locations exceeds 15% of the total length of the proposed route. In analyzing the stretch of highway involved, Mr. Dunn compared it with similar highway sections throughout the state for its accident frequency record. He found that each year there was a segment along the proposed route which appeared as a high accident segment area. He added these up to get the total length of high accident highway and got a figure that was 13% of the total route. Though the directive considered a minimum of 15% as disqualifying, Mr. Dunn concluded that 13% was close enough to qualify. The figure arrived at was not the required 15%, however. Mr. Dunn also considered that Highway safety consideration which read: d. The route does not provide a minimum passing sight distance of one-half mile at a maximum of three mile intervals. To qualify as a safe segment, there must be passing areas with a 1/2 mile sight distance, within 3 miles of each other. This road does not comply with that criterion. Mr. Dunn made field measurements of the route in question and found that heading westbound, the first passing zone started at mile 1.3 and ended at mile 1.8; the second started at mile 2.4 and ended at mile 2.5; and the third started at mile 4.1 and ended at mile 4.8. After that, westbound, there were no more 1/2 mile passing zones within the 3 mile maximum separation. Evaluating that stretch, while the 1.3 - 1.8 segment is 1/2 mile in length, it is not within 3 miles of the next qualifying passing segment. The same can be said for zone 4.1 - 4.8. Passing segment 2.4 - 2.5 is no good because it is not 1/2 mile in length. Looking at the eastbound route, there is one qualifying passing zone, between mile .4 and mile 1.0 and one between mile 3.8 and mile 4.3, but there are no more 1/2 mile passing zones within 3 miles of each other, so, in his opinion, the eastbound route does not qualify, either. Sometime later, Mr. Dunn measured the highway again based on information presented to him that the route had been re-striped. His second evaluation indicated the situation is now worse that it was before since fewer areas are now striped for passing. A 1989 report of the Transportation Research Board of the National Research Council, supports the method of evaluation Mr. Dunn used here. It increases the minimum passing distance to 3040 feet, a distance much greater than the 2640 feet, (1/2 mile) utilized in the Department's criteria. In addition, the Manual on Uniform Traffic Control Devices, published by the Federal Highway Administration, supports a 900 foot passing distance for passenger cars passing passenger cars. That's a much shorter distance than is needed for cars passing large trucks. Mr. Dunn concluded that taken alone, the passing distance rejection criteria would have been enough to disqualify the Petitioner's application, and when it was considered along with the close issue of the high accident percentage, he was satisfied that rejection was clearly appropriate. However, he did not make any recommendation to his supervisor as to what should be done with this application. He merely reported his findings to his supervisor, Mr. Buser, who made the decision to deny approval. Mr. Buser has serious doubts was to whether the intersection of State Road 50 and I-75 is a trouble spot. The high number of accidents utilized by Mr. Dunn in his analysis all took place at or near the intersection, a point argued by Mr. Gay. Mr. Buser is of the opinion that even if that intersection is not a trouble spot, the Department could prohibit tandem trailer trucks from exiting the interstate there in any case. This has not been done, however. According to Petitioner's representative, Mr. Gay, the requirement to break down the tandem rigs and tow them individually over the route to the terminal creates additional traffic and a resultant increased risk of accident. It also requires increased fuel usage, utilizes increased mileage, and results in increased environmental pollutions. Costs increase, wear to the equipment increases and the result is a loss in productivity. Allowing tandems to traverse the route to the terminal intact would, he claims, reduce traffic and avoid the other undesirable consequences he cited. No doubt it would. On May 13, 1991, Mr. Gay covered the route from I-75 to the terminal. He got behind a truck at I-75 and by the time they got to the first passing zone, the truck was doing 55 mph in a 55 mph zone. After that, there was no reason to pass, since 55 mph is the maximum speed permitted. This presupposes that all drivers observe the speed limit. Travel on the highways of this state show this to be an unjustified presumption. On May 20, 1991, he repeated the experiment and followed a truck to the first passing zone, by which time he was going 49 mph. These two experiments do not have major evidentiary value. Mr. Gay also noted some other pertinent facts regarding permitted activities on State Road 50, which went uncontradicted by the Department. Mobile homes up to 85 feet in length may be towed by a tractor; trailers up to 57.6 feet in length with a 12 month permit, (when the tractor is added, the total length is 68.6 feet); large boat haulers are allowed; and tandem trailers for household movers are allowed anywhere. Only tandem long haulers are not allowed on highway 50. These tandems trailers are 28 feet long each, with a 4 foot dolly between them. When a tractor is added, the total length is 71 feet, which is 2 1/2 feet longer than a large tractor and trailer. In light of the above, Mr. Gay contends that since all these other units are allowed, his should be allowed as well. He admits, however, that mobile homes and other oversize loads generally have escort vehicles preceding and following. He also recognizes that the handling characteristics of the tandem rig are different than those of the single unit trailer. Nonetheless, based on his research, he contends there are sufficient passing zones all along the route to make it safe. State guidelines, however, indicate to the contrary. Nothing above is intended to indicate that Petitioner is operating other than in a satisfactory manner. In its most recent rating by the United States Department of Transportation, the company was awarded a satisfactory evaluation. In addition, there is no doubt that numerous commercial enterprises served by the Petitioner would consider the opportunity to carry more cargo beneficial to their operations.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that if such action is consistent with then existing legislation, the Petition by Consolidated Freightways, for a tandem trailer route over State Road 50 from I-75 to its terminal near Brooksville, Florida be denied. RECOMMENDED this 11th day of July, 1991, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 COPIES FURNISHED: Filed with the Clerk of the Division of Administrative Hearings this 11th day of July, 1991. Charles G. Gardner, Esquire Department of Transportation 605 Suwannee Street, MS - 58 Tallahassee, Florida 32399-0450 Andrew J. Gay, Jr. Safety Supervisor Consolidated Freightways 5625 Carden Road Orlando, Florida 32810 Ben G. Watts Secretary Department of Transportation Hayden Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0458 Thornton J. Williams General Counsel D.O.T. 605 Suwannee Street Tallahassee, Florida 32399-458
Findings Of Fact The Florida Department of Transportation (DOT) is required by state and federal law to ensure that a certain percentage of funds available for construction, design and consulting service contracts be provided as opportunity for utilization by small business concerns owned and controlled by socially and economically disadvantaged individuals (DBEs). DBE contract goals are established by the DOT for each construction contract. Every bidder must submit a form to the DOT which either documents compliance with the DBE contract goal or, if compliance is not met, must provide sufficient information to demonstrate that good faith efforts were made by the bidder to meet the goal. Prior to June of 1984, it was the practice of the DOT to allow contractors ten days after the bid letting to correct their DBE forms or to submit their good faith effort documentation. After holding numerous workshops throughout the State, the DOT amended its rules relating to participation by disadvantaged business entities. As pertinent to this proceeding, the amendment requires that all DBE documentation be submitted at the time of the submission of the bid proposal. Bidders are notified that: ".... Failure to satisfy these requirements shall result in a contractor's bid being deemed nonresponsive and the bid being rejected." Rule 14-78.03(2)(b)4, Florida Administrative Code. This rule became effective on May 23, 1984. All prequalified bidders were mailed a copy of the rule amendments prior to their effective date. Petitioner received a copy of the new rule prior to May 23, 1984. By notice dated June 28, 1984, contractors were advised that sealed bids would be received on July 25, 1984, on various road projects. The bid documents advised that the DBE goal for Project Number 50020-3516 was 10 percent. Form 932-10 entitled "Disadvantaged/Women Business Enterprise Utilization Affirmative Action Certification" advised bidders that Form 1 is required to accompany the bid documents. The specifications for Job Number 50020-3516 contain extensive provisions with regard to compliance with the DBE contract goals. Among these provisions is the following language contained in Section 2-5.3.2: "... Award of the Contract shall be conditioned upon submission of the DBE and WBE participa- tion information with the bid proposal and upon satisfaction of the contract goals or, if the goals are not met, upon demonstrating that good faith efforts were made to meet the goals." (Emphasis added.) The specifications lists as grounds for disqualification of bidders "failure to satisfy the requirements of 2-5.3." On July 25, 1984, Petitioner submitted a bid in the amount of 8171,370.51 for Job Number 50020-3516. Attached to the bid was Form 932-10 and Form No. 1, the latter indicating that petitioner's proposed utilization of DBEs was 7.6 percent of the total contract amount. While noting that two other DBEs were contacted without success, petitioner provided no further documentation regarding its good faith efforts to comply with the 10 percent contract goal. Three contractors submitted bids on this project. The next lowest bidder was Baxter Asphalt & Concrete, Inc., which submitted a bid of $191,540.92 and demonstrated compliance with the DBE contract goal. The third bidder, Capital Asphalt, Inc., submitted a bid of $204,651.35, fell below the 10 percent DBE contract goal and, like the petitioner, failed to demonstrate that it made a good faith effort to comply. The DOT engineer's estimate on this project was approximately $147,000.00. By notice dated August 17, 1984, the DOT advised that all bids received on Job Number 50020-3516 had been rejected. Two reasons were given for the rejection: that "the low bidder failed to meet DBE Contract Requirements" and that "awarding to the second low bidder is not in the best interest of the State." During June, July, and August following the adoption of the new rules regarding DBE requirements, it was the general policy of the DOT Awards Committee to reject all bids on a project if the low bidder failed to meet DBE requirements and there was more than a one percent difference between the first and second low bids. Beginning in September or October, 1984, this policy was changed to one of awarding to the second or third most responsible bidder as long as the bid was within the State estimate. Consequently, the DOT has now determined to award this challenged bid to Baxter Asphalt & Concrete, Inc. In another bid letting occurring on May 30, 1984, on Project Number 55160-3517, petitioner failed to submit with its bid proposal the forms for demonstrating compliance with the DBE requirements. By letter dated May 30, 1984, and received on June 4, 1984, petitioner was advised to forward, without delay, the necessary Form No. 1. The Form returned by petitioner showed 8 percent DBE participation. Since the contract goal was 10 percent, petitioner was afforded another opportunity to comply, did comply and receive approval on June 11, 1984, and was later advised that yet another DBE form needed to be completed. On July 17, 1984, petitioner received a letter from the DOT advising that the contract had been awarded to petitioner as of July 16, 1984. For all bid lettings occurring since June or thereafter, the DOT has rejected bids from contractors who have not submitted evidence with their bid proposal of either DBE compliance or a good faith effort to comply. New forms have been utilized to require such submittals with the bid proposal and removing the prior 10 day grace period language. Also, on August 22, 1984, the DOT sent a "Notice to All Contractors" that: "... all submittals for evaluating Good Faith Efforts in meeting DBE/WBE goals must be submitted with the bid proposal in order to be considered for award of the contract. Failure to submit the Good Faith Effort documentation with the bid may result in rejection of the bid."
Recommendation Based upon the findings of fact and conclusions of law recited herein, it is RECOMMENDED that a Final Order be entered rejecting as non-responsive the bid submitted by petitioner on Job Number 50020-3516, and awarding the contract to Baxter's Asphalt & Concrete, Inc. Respectfully submitted and entered this 27th day of February, 1985, in Tallahassee, Florida. DIANE D. TREMOR Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of February, 1985. COPIES FURNISHED: Michael P. Bist, Esquire 300 Lewis State Bank Building Tallahassee, Florida 32301 Larry D. Scott, Esquire Haydon Burns Building, MS-58 Tallahassee, Florida 32301-8064 Frank A. Baker, Esquire 204 Market Street Marianna, Florida 32446 Paul Pappas, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301
The Issue The primary issue for determination is whether the bid of Intervenor, in response to Respondent's invitation to bid, is non-responsive. Secondary issues to be resolved include Petitioner's legal standing to protest all recommended awards to Intervenor in all the bid's categories where intervenor was deemed the successful bidder; whether Intervenor is an operational division of a corporation authorized to conduct business within the State of Florida; whether Intervenor satisfied bid requirements for submission of a valid manufacturer's certificate; and whether intervenor satisfied bid requirements involving identification of a service coordinator and provision of a list of service representatives in the State of Florida for the computer equipment which is the subject of the bid.
Findings Of Fact Respondent issued an Invitation To Bid (ITB) for microcomputers, Bid No. 129-250-040-B, on February 19, 1990. The ITB was revised by a March 22, 1990 addendum which established April 9, 1990, as the date for opening bid responses with bid tabulations to be posted on May 7, 1990. The purpose of the ITB was to establish a twenty-four (24) month contract for the purchase of microcomputers and equipment by all State of Florida agencies and other eligible users. Political subdivisions of the State of Florida, as well as state universities, could exercise the option of purchasing from the contract, if they so desired. The ITB invited bids in several categories of microcomputer equipment. Petitioner's timely filed written protestaddresses 17 of those categories where Intervenor was determined by Respondent to be the successful bidder. Those categories are numbered 255, 256, 257, 258, 259, 260, 266, 267, 268, 269, 271, 272, 273, 275, 276, 277, and 278. However, the bid tabulation posted by Respondent on May 7, 1990, establishes that Petitioner was the next lowest bidder in only four of the 17 categories. Those four categories are 266, 267, 268, and 269. In accordance with Paragraph 13 of the ITB general conditions, all corporations responding to the ITB were required to be registered with the Florida Department of State and authorized to transact business in the state in accordance with requirements of Chapter 607, Florida Statutes. Further, such bidders were required to insert their corporate charter number, resulting from that registration, in the appropriate space in the bidder acknowledgement form provided by Respondent for inclusion in responses to the ITB. Intervenor provided the Department of State Corporate Charter No. 822327 in the bidder acknowledgement form submitted with its response to the ITB. That charter number is assigned by the Department of State to VGC Corporation d/b/a VGC Corporation of Delaware, a corporation organized under laws of Delaware and authorized to transact business in the State of Florida since 1969. Intervenor mistakenly listed, in its bid, the federal employment identification (FEID) number of another subsidiary corporation of VGC Corporation (VGC). The FEID number submitted by intervenor was that of Graphic Arts Supply, Inc., (GAS), acquired by VGC in December of 1986. GAS became a wholly owned subsidiary of VGC at that time and remains such at the present time. At the time of its acquisition, there existed within GAS a particular segment of that business which dealt primarily with computer products. This computer segment of GAS was set up by VGC as a separate division of the parent corporation in November, 1988. The formation of the new division within VGC was announced at that time by the VGC president in an interoffice memorandum which stated in pertinent part: The Computer Products Group of Graphic Arts Supply has grown significantly in the last several years, accounting for approximately 10% of the total corporation's sales. The growth opportunities in this area are enormous and our long term goal is to become one of the major material distributors of computer products in the United States. Accordingly, I am pleased to announce that we will make this operation a separate division, reporting to Tom Mclaughlin. At the time of the issuance of the November 1988 interoffice memorandum, Tom Mclaughlin was a vice-president and subsidiary manager of VGC corporation. Another individual, Pat Mclaughlin, was a VGC vice-president and general manager of the new division, the intervenor in this cause. Another memorandum issued by the VGC president on September 14, 1989, further emphasized that VGC's Business Systems Division, which is also intervenor, was an operating division of VGC. That memorandum stated that the company comprising the Business Systems Division was known as "GA Computer Systems" and further provided in pertinent part that: The Business System Division is an operating unit and not a subsidiary. The Business Systems Division relies on VGC-Rochester for financial and administrative support, and VGC-Florida for all other support and reporting. On the date of Intervenor's response to the ITB, GAS and Intervenor continued to maintain a business relationship. Pursuant to that relationship, GAS provides certain administrative services to Intervenor in the form of certain record keeping and payment of various taxes in the state of New York. Intervenor pays a fee to GAS for these services. Other administrative functions, such as federal and state tax return preparation, are performed by VGC-Rochester and VGC-Florida, other components of VGC. Intervenor's response to the ITB was submitted and signed by John J. Piseck, an employee of VGC who serves as the eastern regional sales manager for Intervenor's computer products. Another of the ITB's general conditions requires that bids from non manufacturers to provide microcomputers must be accompanied by a certification from the manufacturer that the bidder is an authorized representative of the manufacturer. The certification submitted by Intervenor with its bid response was executed by a representative of Hewlett-Packard Corporation, the computer manufacturer, certifying that GA Computer Products is an authorized dealer/representative. On the date of Intervenor's response to the ITB, adealer/representative contract existed between Intervenor and Hewelett-Packard. The agreement was signed on Intervenor's behalf by Patrick Mclaughlin, VGC vice- president and general manager of Intervenor. Page 12 of the ITB special conditions provides in pertinent part that: The bidder shall name a service coordinator and provide a complete list of in-state representatives, and manufacturer's authorized service repair centers on page 19 as part of the bid response. In the course of fulfilling its responsibility to evaluate each vendor's response to the ITB, Respondent accepted either a list of the bidders' own in-state representatives or a list of the manufacturer's in-state representatives as meeting this service requirement of the ITB. Respondent does not, and is not required to, verify information supplied by vendors relating to service locations. Intervenor has fully complied with the ITB requirement relating to naming a service coordinator and providing a list of service representatives and repair centers. Specifically, Intervenor named one of its employees as the service coordinator, provided a toll-free telephone number for communication with the coordinator, and listed five Hewlett-Packard service locations within the State of Florida. These service locations honor the warranties of the manufacturer, Hewlett-Packard, without regard to which Hewlett-Packard dealer sold the product. Intervenor was responsive in all material respects to Respondent's ITB No. 129-250-040-B.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that upon Intervenor's submission of a corrected FEID number, a Final Order be entered denying Petitioner's claims and confirming the award of the contested 17 categories of Respondent's ITB No. 129-250-040-B to GA Computer Products, a division of VGC Corporation. DONE AND ENTERED this 23rd day of July, 1990, in Tallahassee, Leon County, Florida. DON W.DAVIS 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 23rd day of July, 1990. APPENDIX The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings. Petitioner's proposed findings consisted of 32 pages encompassing unnumbered paragraphs dealing with an intertwined mixture of legal conclusions, argument and proposed factual findings. Therefore, Petitioner's submission cannot be treated by the Hearing Officer in this appendix on an individualized basis for each proposed finding. However, Petitioner's submission has been reviewed and addressed, where possible, by the findings of fact set forth in this recommended order. Otherwise, all disputed issues of material fact have been addressed by the evidence adduced at the hearing held in this cause. Intervenor's Proposed Findings. 1.-32. Adopted in substance. Respondent's Proposed Findings. 1.-2. Adopted in substance. 3.-4. Rejected, unnecessary. 5.-24. Adopted in substance. 25.-27. Rejected, unnecessary. 28. Adopted in substance. COPIES FURNISHED: Thomas F. Morante, Esq. One Biscayne Tower Suite 3750 Two S. Biscayne Boulevard Miami, FL 33131 Susan Kirkland, Esq. Jim Bennett, Esq. Office of General Counsel Department of General Services Suite 309 Knight Building 2737 Centerview Drive Koger Executive Center Tallahassee, FL 32399-0950 Lowell L. Garrett, Esq. 5300 Southeast Financial Center 200 S. Biscayne Boulevard Miami, FL 33131 Ronald W. Thomas Executive Director Knight Building Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950
The Issue As set forth by the parties in the Prehearing Stipulation and in their proposed recommended orders, the issue in this case is whether the bid submitted by Pass International, Inc., on the Booker T. Washington Middle School Project No. A-0557 is responsive with respect to compliance with the Minority/Women Business Enterprise Assistance Levels subcontracting requirement contained in the Invitation to Bid.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, on the contents of the Pre-Hearing Stipulation, and on the entire record of this proceeding, the following findings of fact are made: At all times material to this proceeding, the School Board was a duly-constituted School Board charged with the duty to operate, control, and supervise all free public schools within the School District of Miami-Dade County, Florida, pursuant to Article IX of the Florida Constitution and to Section 230.03, Florida Statutes. Acestarz, Inc., was organized as a Florida for-profit corporation on September 2, 1997. Joseph Akoni, an African American male, owns 100 percent of the stock of Acestarz and acts as its president. In an agreement executed April 19, 1998, Joseph Robert Mijares, a Hispanic, agreed to act as Acestarz' qualifying agent and to apply for Acestarz's certification of authority as a general contractor. At the time, Mr. Mijares was an employee of Pass, and he acted as project manager on a number of Pass construction projects, both large and small. Mr. Mijares notified Pass of his agreement with Acestarz a few days after it was executed. Mr. Mijares held a state general contractor's certification. As qualifying agent, Mr. Mijares submitted the application for certification for Acestarz to the Florida Department of Business and Professional Regulation, Construction Industry Licensing Board, on April 23, 1998. A Temporary Authorization License was issued to Mr. Mijares on August 5, 1998, which authorized Acestarz to practice contracting through Mr. Mijares as its qualifying agent pending the processing and receipt of the permanent certification. By its terms, the temporary license was to expire on October 5, 1998. On or about June 1, 1998, Acestarz submitted a Certification Application to the School Board requesting certification as an African American M/WBE. In a letter dated June 1, 1998, Patricia Freeman, Director of the Division of Business Development and Assistance, notified Mr. Akoni that the application had been received. In the letter, Ms. Freeman stated: In the interim [while the application is pending], you may bid as a prime, or subcontractor, on future Dade County Public Schools contracting opportunities, set aside for, or requiring M/WBE participation. Should you be deemed the apparent low bidder or a subcontractor thereto, your application will be processed before contract award. Prime contractors who utilize subcontractors that are pending, but subsequently are deemed ineligible for certification, will be allowed to make a substitution, within the same racial or gender category as the firm being substituted. The School Board's BTW project is a competitive design- build project involving the conversion of Booker T. Washington Middle School into a high school. In order to submit a bid on the BTW project, prospective bidders were required to submit pre-qualification proposals for evaluation in August 1997. Pass and Danville-Findorff, among others, submitted pre-qualification proposals. After the School Board administrative staff evaluated the proposals, three firms, including Pass and Danville-Findorff, were pre-qualified to bid on the BTW project. On or about June 9, 1998, the School Board issued an Invitation to Bid on the BTW project. The bid specifications instructed the bidders to submit a lump-sum bid for all design and construction services required to complete the BTW project. The bid specifications further provided that the bids were to be submitted on or before July 28, 1998, and that, thereafter, the bids would be opened, read, and tabulated. According to the bid specifications, the "[a]ward of the contract will be made to the lowest responsible bidder for the actual amount bid." The time for submitting bids was extended to August 4, 1998. Included as part of the Invitation to Bid on the BTW project is a Special Provision for Compliance with M/WBE Subcontracting Assistance Levels Participation ("Special Provision"). The purpose of the Special Provision is to "ensure that Minority/Women Business Enterprises are afforded maximum opportunity to participate in School Board work." Section II.A., Special Provision. An M/WBE is defined in Section I.A.12. of the Special Provision as follows: Any legal entity which is organized to engage in commercial transactions and which is at least fifty-one (51) percent owned and controlled by minority persons. Minority person means a person who is a citizen or lawful permanent resident of the United States and who is: An African American, a person having origins in any of the Black racial groups of Africa; An Hispanic, a person of Spanish or Portuguese culture, including, but not limited to persons with origins in Mexico, South America [sic] Central America, or the Caribbean Islands, regardless of race; A Woman. Pursuant to the Special Provision, M/WBE assistance levels for one or more minorities are to be specified for all School Board projects. The assistance level for African American M/WBEs was established at eight percent of the total price bid on the BTW project. Section III.A. of the Special Provision provides in pertinent part: SUBMITTALS As a condition of responsiveness, all bid submittals shall contain the documents and information required below. . . . Sealed bids must contain a completed FORM FM 4828, BREAKDOWN OF PROJECT COST AND SUBCONTRACTORS/ CONSULTANT LIST, stipulating the name, and price for each Subcontractor, including the M/WBE category for those listed to meet the M/WBE subcontracting Assistance Level requirements. Letters of Intent (Attachment C-FM 4829) for listed M/WBEs used to meet the M/WBE subcontracting Assistance Levels must be presented by the apparent low bidder, to the Department of Contract Management, . . . within two (2) days (by no later than 2:00 p.m.) after the date, and time and location specified in the LEGAL ADVERTISEMENT AND THE INSTRUCTIONS COVERING OPENING OF BIDS. Letters of Intent prices must not be less than the amount listed on Form FM 4828, Breakdown of Project Cost and M/WBE Subcontractor/Consultant List. Letters of Intent for M/WBEs not listed on FM-4828, will not be considered in determining Compliance, unless the listed M/WBE becomes Unavailable. M/WBE Certification Applications (FM-3920) must accompany the Letters of Intent for all M/WBEs utilized to meet the Assistance Levels who are not certified nor pending certification as M/WBE's [sic] Dade County Public Schools at the time of bid submission. All bids, will be publicly opened, read, and tabulated in the School Board Auditorium, or other designated area, Dade County School Board Administration Building, by an authorized representative of the School Board. The submittal of the apparent low bidder being considered for award will be presented to the Division of Business Development and Assistance for an M/WBE subcontracting Compliance Review, in accordance with Section IV. of the SPECIAL PROVISION FOR COMPLIANCE WITH M/WBE SUBCONTRACTING ASSISTANCE LEVELS PARTICIPATION. If the apparent low Bidder is found to be nonresponsive or in Noncompliance, the Department of Contract Management shall notify the second low bidder . . . . Failure to submit the completed Form FM 4828 submittals at the bid opening may result in the bid being found nonresponsive. Both Pass and Danville-Findorff submitted sealed bids for the BTW project on August 4, 1998. The bid packages were opened on August 5, 1998. Pass had submitted the lowest lump-sum bid at $13,900,000, and Danville-Findorff had submitted the second lowest bid at $13,979,000. Pass submitted a Form FM 4828 with its bid in which it identified Acestarz and Manny & Lou as the M/WBEs that Pass intended to use to meet the eight-percent African American subcontracting assistance level. The listings on the Form FM 4828 submitted by Pass indicated that Acestarz would perform work in categories 9.01 through 9.06 for a price of $500,000 and that Manny & Lou would perform work in category 15.04 for a price of $700,000. Without Acestarz' $500,000 proposal, Pass's bid would not meet the eight-percent African American M/WBE assistance level. Section III.B.4. of the Special Provision provides as follows: The listing of a M/WBE Subcontractor [on Form FM 4828] by the Bidder shall constitute a representation by the Bidder that the listed Subcontractor is available and qualified, and a commitment by the Bidder that if it is awarded the contract, it will enter into a subcontract with the Subcontractor for the type of work, at a minimum of the price set forth in its submission. "Qualified" is defined in Section I.A.21. of the Special Provision as follows: A subcontractor is potentially Qualified to do specific work if at a minimum it meets all of the following criteria: It has or is able to obtain any and all bonds, insurance and licenses required to do such work and was duly informed by the Bidder that a bond, insurance or license was required and said Subcontractor included the cost associated with same in the bid quotation; It has the necessary experience, financial ability, organization, technical qualifications, skill and facilities to do such work; It is able to reasonably comply with the performance schedule needed for such work; It does not have an unsatisfactory record of integrity, judgment or performance; It is able to meet the applicable equal employment opportunity requirement if stipulated, and It is not otherwise ineligible to perform such work under applicable law and regulations. It is the general contractor's responsibility to determine whether a subcontractor is qualified to do the work or portion thereof. Nothing delineated herein shall be interpreted to waive the requirement that the subcontractor be legally licensed and certified at the time it is scheduled to perform such work. Prior to listing Acestarz on Form FM 4828, Henry Louden, who prepared Pass's bid package on the BTW project, did not ask Mr. Akoni about Acestarz' licensure status, the number of employees on its payroll, its financial capacity, or the type of equipment it had. Prior to submitting Pass's bid package, Mr. Louden mentioned to Mr. Akoni that he needed to look at bonding requirements because, when doing public work, subcontractors sometimes were required to provide bonds. Mr. Louden did not, however, inform Mr. Akoni of any licenses Acestarz might need to do the work proposed or of the insurance that Pass required its subcontractors to carry. The extent of Mr. Louden's knowledge about Acestarz prior to submitting Pass's bid package was described in the following two exchanges: Q. [By Mr. Flaxman] What did you know as it related to his [Joseph Akoni's] construction, his portion of construction, things of that nature prior to your [sic] submitting his name to the School Board? A. [By Mr. Louden] His experience? Q. Everything. Whatever you knew about him. A. About his whole firm, then? Q. Yes. A. Joe Akoni came to our office, inquired about bidding work with us, identified areas that he was familiar with, in construction areas that he is familiar with, and subsequent to that, I guess, he got together with Mr. Mijares in my office, and after that discussion, Mr. Mijares -- * * * THE WITNESS: Okay. Mr. Mijares got involved with Ace Starz [sic]. Ace Starz looked at a couple jobs in our office. Ace Starz submitted some bids to us on other jobs. Ace Starz was interested in submitting prices for the Booker T. Washington job. We provided plans to him. We reviewed the plans together, identifying the scope that we needed them to furnish to us, . . . . Q. . . . . Is there anything else you knew about Ace Starz, Inc. as it related to the construction of the project [prior to submitting Pass's bid package]? A. No.2 And, again, Q. (By Mr. Swimmer) Did you meet or did someone else on behalf of Pass meet with Mr. Akoni prior to Mr. Akoni giving a price on behalf of Ace Starz [sic] to go over the scope of work? A. [By Mr. Louden] Yes. Q. And did you discuss with him scope of work at that time? A. Yes. Q. And did you come away from that meeting with a sense of qualifications and ability of Ace Starz and Mr. Akoni [Objection by Mr. Flaxman.] MR. SWIMMER: Then, let me ask you -- I'll rephrase the question. BY MR. SWIMMER: Q. Did you reach a belief as a result of your interaction with Mr. Akoni regarding his capacity, his ability with regard to construction of the items for which he was pricing? A. Yes. Q. And what was that conclusion? A. His pricing and understanding of what we were requesting, from what I felt was necessary, in order to achieve -- to submit a price to me when we went through the plans, after he submitted the pricing, we reviewed it and it was consistent with what I was looking for, with other sub prices that we received. Q. Did you go through the plans with him, with Mr. -- A. Yes. Q: Did Mr. Akoni mark up the plans to describe the work which would be the scope of his price? A. I'm sure he did. I don't recall what he marked, whether he marked it. I identified specifically which areas he needed to price 3 On August 4, 1998, the date that bid packages on the BTW project were submitted to the School Board, Acestarz was not licensed by the state Construction Industry Licensing Board pursuant to Chapter 489, Florida Statutes, or by Miami-Dade County pursuant to Chapter 10 of the Code of Metropolitan Dade County, Florida. Once Pass was notified by the School Board that it had submitted the low bid, Pass timely submitted Letters of Intent from each of the three subcontractors it intended to use to meet the M/WBE assistance levels for the BTW project, as required by Section III.A.2. of the Special Provision. An application for certification for Acestarz was not submitted with Pass's bid package because Acestarz's certification application had been filed with the Division of Business Development and Assistance on June 1, 1998, and was still pending. Pass was determined to be the lowest responsive bidder and its bid package was forwarded to the Division of Business Development and Assistance for a compliance review to be conducted pursuant to the Special Provision.4 In Section I.A.4. of the Special Provision, "compliance" is defined as "[t]he condition existing when a successful bidder has met and implemented the requirements of this Provision." In Section I.A.6. of the Special Provision, "compliance review" is defined as "[a] review to determine whether the successful Bidder is in Compliance with these Provisions." "Successful Bidder" is defined in Section I.A.24. as "[t]he Bidder to which the contract is awarded." Even though the above-quoted sections of the Special Provision specify that a compliance review is done for the "successful" bidder after the contract for the project is awarded, the M/WBE compliance review is actually done before the contract is awarded in accordance with the procedures set out in Section IV. of the Special Provision. Section IV.A. provides in pertinent part: DETERMINATION OF COMPLIANCE Subsequent to bid opening and prior to award, the M/WBE Compliance Administrator will conduct a review of the bid submittals in order to determine Compliance with the Provision as follows: 1. Fulfillment of Established Assistance Levels If the total price for work to be performed by M/WBE Subcontractors as indicated in either the Breakdown of Project Cost and Subcontractors/Consultant List or Letters of Intent is sufficient to fulfill the established Assistance Levels, in each race/ethnic/gender category, the Compliance Administrator will issue a written Notice of Compliance to the Bidder. Pursuant to these provisions, the compliance review involves consideration of the cost breakdown for each M/WBE subcontractor listed by the lowest responsive bidder on the Form FM 4828; whether each subcontractor listed is a certified M/WBE, has an application for certification pending, or has filed a certification application with its Letter of Intent; and whether the price of the work to be done by each M/WBE subcontractor meets or exceeds the assistance levels specified in the bid documents. Ms. Freeman, in her capacity as Compliance Administrator, was responsible for conducting the compliance review of Pass's bid package. On August 14, 1998, before the compliance review had been completed but after Pass had been identified as the lowest responsive bidder, Danville-Findorff sent a notice of bid protest to Julio Alvarez in the School Board's contract administration section protesting the award of the contract for the BTW project to Pass. The August 14 notice of protest includes virtually the same factual allegations as those set out in the Petition which initiated these proceedings. Danville-Findorff supplemented the allegations contained in its August 14 notice of protest in letters dated August 19, 1998, and September 1, 1998, which included additional information regarding Joseph Mijares, the qualifying agent for Acestarz. On August 18, 1998, Pass sent to the School Board via facsimile an M/WBE Subcontractor/Consultant Letter of Intent executed by G. Family Ent., Inc., a certified M/WBE, in which that company agreed to perform the same scope of work that Acestarz had agreed to perform in its Letter of Intent submitted to the School Board on August 6, 1998.5 G. Family Ent., Inc., agreed to do the work for $500,000, the same price specified by Acestarz. Although the School Board never issued a formal response to Danville-Findorff's August 14 notice of protest, the issues raised were resolved when Ms. Freeman issued a Notice of Noncompliance dated August 26, 1998, in which she stated that, based on her analysis of Acestarz' status, Pass's bid did not meet the eight-percent assistance levels for African American M/WBEs established for the BTW project. Ms. Freeman's conclusion was based on a finding that Acestarz' $500,000 proposal could not be credited toward the African American assistance levels required for the BTW project because "ACESTARZ was neither qualified as a construction company on bid day, nor can it be certified as an M/WBE." Ms. Freeman refused to authorize Pass to substitute another M/WBE subcontractor for Acestarz because "it can only be assumed that Pass was fully aware of ACESTARZ' status." When it received the Notice of Noncompliance, Pass timely requested a meeting with Ms. Freeman, as permitted in Section IV.B.2. of the Special Provision. The meeting was held on August 28, and, on September 4, 1998, Ms. Freeman issued a Final Notice of Noncompliance in which she reiterated her conclusion that Pass's bid was not in compliance with the African American M/WBE assistance levels required for the BTW project. In the final notice, Ms. Freeman stated: ACESTARZ was not qualified to perform construction services of any nature at the time of bid. Not only did it not hold a State license but it was denied a County license without first obtaining the requisite local or state licenses. Therefore, it was not eligible or qualified to bid as a prime or a subcontractor. * * * In conclusion, Pass not only listed an unqualified firm, but one that was not legally organized to conduct business as a construction company. Therefore, Pass cannot be credited for including ACESTARZ to meet the M/WBE requirements, on this project. * * * To your request for immediate authorization to allow Pass to substitute [another M/WBE subcontractor for] ACESTARZ,"[6] please be advised that Pass . . . made" the same request on August 12, 1998, Please be advised that, other than certified M/WBEs, prime contractors are only credited for listing subcontractors, that meet all legal requirements, but fail to be certified for reasons determined by the Division, in accordance with M/WBE Certification requirements. ACESTARZ was not legally qualified to engage in the construction business at the time of bid opening, and withdrew its M/WBE Certification Application."[7] Therefore, a substitution for the firm cannot be allowed. Section IV.C.5. of the Special Provision provides that the Final Notice of Noncompliance "shall be final and conclusive. The Compliance Administrator shall recommend that the Compliance Review procedure be initiated with respect to the next lowest responsive Bidder, or all remaining bids may be rejected and the project readvertised." A compliance review was not initiated for Danville-Findorff because, on September 4, 1998, Pass delivered its Formal Written Protest to the School Board. Pass stated in the protest that "the stated basis for declaring Pass International, Inc. to be not in compliance with the M/WBE subcontracting requirements set forth in the notice of August 26, 1998, is clearly in error." Specifically, Pass challenged Ms. Freeman's conclusion that Acestarz was not qualified to do the work specified in the Form FM 4828 because it was not licensed at the time Pass submitted its bid. The issues raised in Pass's protest were resolved when Ms. Freeman sent Pass a letter dated September 29, 1998, entitled "RESCISSION OF NOTICES OF NONCOMPLIANCE" for the BTW project.8 Ms. Freeman rescinded the Final Notice of Noncompliance because, at the recommendation of the School Board's legal counsel, she reconsidered the definition of the term "qualified" contained in Section I.A.21. of the Special Provision and determined that, under this definition, Acestarz "is considered a qualified subcontractor for purposes of M/WBE Compliance." Specifically, Ms. Freeman concluded that, pursuant to Section I.A.21. of the Special Provision, it was not the responsibility of the Division of Business Development and Assistance to determine whether Acestarz was qualified to do the work included in Pass's bid submittal. Rather, according to Ms. Freeman, it was Pass's responsibility. In addition, Ms. Freeman concluded that, pursuant to Section I.A.21. of the Special Provision, an M/WBE does not need to be licensed or certified at the time the bid is submitted. Rather, it need be licensed to do the work and certified as an M/WBE Subcontractor in the appropriate category at the time it performs the work under the contract. During her re-evaluation of the notices of noncompliance, Ms. Freeman also decided that it was improper to conclude during the compliance review that Acestarz was not certifiable as an African American M/WBE. A compliance review to determine whether M/WBE assistance levels are met by a bidder is done pursuant to the criteria set out in the Special Provision; the decision to grant or deny an application for M/WBE certification is based on an evaluation of the application pursuant to the standards established in School Board Rule 6Gx13- 3G-1.05. As a result, Ms. Freeman advised Pass in the September 29 letter that, as "the next step in the process," the Division of Business Development and Assistance would complete its review of Acestarz' certification application.9 Some of the criteria for certification specified in School Board Rule 6Gx13-3G-1.05 are the same as or similar to the minimum criteria for an M/WBE subcontractor to be qualified pursuant to Section I.A.21. of the Special Provision. In a letter dated October 23, 1998, entitled "DENIAL OF MINORITY/WOMEN BUSINESS ENTERPRISE (M/WBE) CERTIFICATION," Ms. Freeman advised Joseph Akoni that the documents he submitted failed to show that he "has the capability, knowledge, training, education, and experience needed, to independently guide the future and destiny of Acestarz' construction activities." (Emphasis in original.) Ms. Freeman also observed that, as a matter of statutory law, Acestarz' Hispanic qualifying agent, Robert Joseph Mijares, "has the responsibility to supervise, direct, manage and control the contracting and construction activities of Acestarz." Ms. Freeman concluded: "In summary, Acestarz's construction activities appear, at best, to be managed and controlled jointly by an African American and a non-African American. Therefore, the firm failed to establish eligibility for certification as African American-owned and controlled business, as prescribed by School Board rules." A copy of this denial notice was sent to Pass. Acestarz appealed the decision to deny its application for certification as an African American M/WBE. Ms. Freeman's decision was affirmed by the Certification Appeals Committee, and, in a letter dated November 20, 1998, Ms. Freeman sent to Acestarz' attorney the "FINAL MINORITY/WOMEN BUSINESS ENTERPRISE (M/WBE) CERTIFICATION DENIAL NOTICE." Section III.D. of the Special Provision specifies that, if an M/WBE listed on Form FM 4828 is "determined not to be certifiable, [the M/WBE] must be substituted with another certified or certifiable M/WBE before award." Accordingly, on December 11, 1998, Pass proposed to use TCOE Corporation, a certified African American M/WBE, as a substitute for Acestarz, to do the same scope of work for $550,000. The request to substitute TCOE had not been granted or denied at the time of the final hearing. Summary With respect to the first and second factual issues raised in Danville-Findorff's formal bid protest, the evidence presented is sufficient to establish that Acestarz was neither licensed nor certified as an African American M/WBE at the time Pass submitted its bid on the BTW project. This is irrelevant, however, to a determination of whether Pass's bid is in compliance with the bid specifications because, pursuant to Section I.A.21. of the Special Provision, an M/WBE subcontractor need be licensed and certified only "at the time it is scheduled to perform" work under the contract. With respect to the third issue raised in its formal bid protest, Danville-Findorff presented evidence during the hearing regarding the licensing requirements for construction contractors found in Chapter 489, Florida Statutes, and in Chapter 10, Code of Metropolitan Dade County. Its apparent aim in presenting this evidence was to establish that, because Acestarz was not licensed by the state or the county, Acestarz could not submit a proposal to Pass for inclusion in its bid on the BTW project under the definition of "contracting" in the statute and in the code provision. In essence, Danville-Findorff is attempting to challenge the provision in Section I.A.21. of the Special Provision which requires that an M/WBE subcontractor be licensed at the time it is scheduled to perform work on the project. Danville-Findorff may not do so in this proceeding: The notice of protest challenging the specifications contained in an invitation to bid must be filed within seventy-two hours "after the receipt of . . . intended project plans and specifications in an invitation to bid or request for proposals, and the formal written protest shall be filed within 10 days after the date the notice of protest is filed." Section 120.57(3)(b), Florida Statutes (1997). Danville-Findorff protested only the School Board's intention to award the contract to Pass, and the protest was filed after the bids were opened. With respect to the fourth issue raised in Danville- Findorff's formal bid protest, the evidence is uncontroverted that Joseph Mijares, an employee of Pass until October 1998, acted as the qualifying agent for Acestarz, as that term is defined in Section 489.105(4), Florida Statutes. Danville- Findorff's purpose in presenting this evidence is apparently to establish that Mr. Mijares exerts complete control over Acestarz by operation of this statute. According to Danville-Findorff, this level of control by a Hispanic violates School Board Rule 6Gx13-3G-1.05.I. which requires that an African American M/WBE be fifty-one percent "owned and controlled, in form and in substance" by African Americans. The issue of control is, however, not relevant to a determination of whether a bidder is in compliance with the terms of the Special Provision. Rather, the issue of control is relevant only to a determination of whether an application for certification as an African American M/WBE should be granted or denied pursuant to School Board Rule 6Gx13-3G-1.05. With respect to the sixth issue raised in its formal bid protest, Danville-Findorff presented no credible evidence to establish that it was placed at a competitive disadvantage with regard to its bid on the BTW project because an employee of Pass acted as qualifying agent for Acestarz for purposes of Acestarz' application for licensure as a general contractor. With respect to the seventh issue raised in Danville- Findorff's formal bid protest, the evidence is uncontroverted that Acestarz did not submit an application for certification as an African American M/WBE with its Letter of Intent. This was unnecessary pursuant to Section III.A.3. of the Special Provision because Acestarz' application for certification was submitted on or about June 1, 1998, and was pending at the time Pass's bid was submitted. With respect to the fifth and eighth issues raised in its formal bid protest, Danville-Findorff presented sufficient evidence to establish with the requisite degree of certainty that, at the time the bid package was submitted, Pass did not satisfy the eight-percent assistance level for African American M/WBE participation on the BTW project: Pass did not satisfy the responsibility imposed on it in Section I.A.21. of the Special Provision to determine whether Acestarz was "qualified" or "potentially qualified” to do the work it had proposed to do on the BTW project. Mr. Louden, the Pass employee who prepared the Pass's bid package for the BTW project, did not possess adequate information regarding Acestarz or its president, Mr. Akoni, to determine whether Acestarz satisfied the criteria set out in Section I.A.21., which are the minimum criteria that must be met by a subcontractor to be "potentially Qualified to do specific work." In addition, Mr. Louden failed to make any meaningful inquiry into the qualifications of Acestarz. Because Pass lacked adequate information regarding Acestarz' qualifications and failed to make meaningful inquiry to ascertain Acestarz' qualifications at the time Pass submitted its bid package, Pass could not, in good faith, represent to the School Board that Acestarz was "qualified" or “potentially qualified” at the time the bid was submitted, which it did pursuant to Section III.B.A. of the Special Provisions when it listed Acestarz on the Form FM 4828.9 Because Pass did not conform to the requirements of Section I.A.21. and Section III.B.4. of the Special Provision when it listed Acestarz as a "qualified" or “potentially qualified” African American M/WBE subcontractor, it was not entitled to use Acestarz to meet the African American M/WBE assistance levels for the BTW project at the time it submitted its bid. Furthermore, under these circumstances, Pass cannot substitute another subcontractor for Acestarz because that option is available pursuant to Section III.D. of the Special Provision only upon the denial of the application for certification of an M/WBE which was not certified at time the bid was submitted. Because Pass's bid does not meet the assistance levels established for African American M/WBEs set out in the Special Provision for Compliance with M/WBE Subcontracting Assistance Levels Participation, Pass's bid was not in compliance with the Special Provision at the time it was submitted. Therefore, Pass's bid is not responsive to the bid specifications for the BTW project. The award the contract for the BTW project to Pass would be contrary to the bid specifications and would be arbitrary in light of the facts found herein.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Miami-Dade County School Board reject the bid of Pass International, Inc., as non-responsive to the bid specifications and that a compliance review be initiated with respect to the next lowest responsive and responsible bidder. DONE AND ENTERED this 14th day of April, 1999, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO 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 14th day of April, 1999.
