Findings Of Fact The Department issued an invitation to bid (ITB) and solicited bids for district-wide miscellaneous property management maintenance services pursuant to ITB-DOT-94-95-4004. Kemp Services, Inc. (Kemp), submitted the lowest bid for the subject ITB. Petitioner, Urban Group, Inc., submitted the second lowest bid for the subject ITB. Section 1.1 of the ITB provided: Invitation The State of Florida Department of Transport- ation requests written bids from qualified firms to MAINTAIN RIGHT-OF-WAY STRUCTURES AND VACANT LOTS BY PROVIDING CLEAN-UP SERVICES, LAWN SERVICES, LANDSCAPE SERVICES, SECURING OF BUILDINGS, AND OTHER MISCELLANEOUS HANDYMAN AND SKILLED LABOR SERVICES. ALSO PROVIDE SERVICES FOR SIGN REMOVAL FOR STRUCTURES ILLEGALLY ON THE DEPARTMENT'S RIGHT-OF-WAY OR ILLEGALLY ON PRIVATE PROPERTY IN THE FOLLOWING FIVE COUNTY AREA: BROWARD, MARTIN, PALM BEACH, ST. LUCIE AND INDIAN RIVER COUNTIES. For the purpose of this document, the term "bidder" means the prime Consultant acting for itself and those individuals, partnerships, firms, or corporations comprising the bidder's team by joint venture or subcontract. The term "bid package" means the complete response of the bidder to the Invitation To Bid, including properly completed forms and supporting documentation. [Emphasis in text.] The services were to be provided on an as-needed basis for the term of the agreement, two years. Section 1.7.1 of the ITB provided: Qualifications 1.7.1 Bidders must meet the following minimum qualifications: BIDDERS MUST HAVE AT LEAST TWO YEARS EXPERIENCE PROVIDING AT LEAST TWO (2) OF THE SIX SERVICES OUTLINED IN THE SCOPE OF SERVICES IN EXHIBIT "A". BIDDERS MUST HAVE BEEN IN CONTINUOUS BUSINESS FOR THE PAST TWO (2) YEARS AND COMPLETE FORM "F" WITH THE INFORMATION REQUESTED REGARDING WORK EXPERIENCE AND REFERENCES. ALL REFERENCES WILL BE CHECKED. FAILURE TO PROVIDE FORM "F" AND THE WORK EXPERIENCE REQUESTED WILL CONSTITUTE A NON- RESPONSIVE BID. [Emphasis in text.] Section 1.7.4 of the ITB provided: Qualifications of Key Personnel Those individuals who will be directly involved in the project must have demonstrated experience in the areas delineated in the scope of work. Individuals whose qualifications are presented will be committed to the project for its duration unless otherwise accepted by the Department's Contract Manager. Where State of Florida registration or certification is deemed appropriate, a copy of the registration or certificate should be included in the bid package. Section 1.7.5 of the ITB provided: Authorizations and Licenses The Consultant must be authorized to do business in the State of Florida. Such authorization and/or licenses should be obtained by the bid due date and time, but in any case, will be required prior to award of the contract. For corporate authorization, contact: Florida Department of State Division of Corporations The Capitol Building Tallahassee, Florida 32399 (904)487-6052 Other than the provisions above, no other licensure or authorization to do business was required by the ITB. Section 1.8.2 of the ITB provided: Responsiveness of Bids All bids must be in writing. A responsive bid is an offer to perform the scope of services called for in this Invitation to Bid. Bids found to be non-responsive shall not be considered. Bids may be rejected if found to be irregular or not in conformance with the requirements and instructions herein contained. A bid may be found to be irregular or non-responsive by reasons, including, but not limited to, failure to utilize or complete prescribed forms, conditional bids, incomplete bids, indefinite or ambiguous bids, improper undated or unsealed signatures (where applicable). Section 1.8.4 of the ITB provided: Other Conditions Other conditions which may cause rejection of bids include evidence of collusion among bidders, obvious lack of experience or expertise to perform the required work, or failure to perform or meet financial obligations on previous contracts, or in the event an individual, firm, partnership, or corporation is on the United States Comptroller General's List of Ineligible Contractors for Federally Financed or Assisted Projects. Bids will be rejected if not delivered or received on or before the date and time specified as the due date for submission. Section 1.8.5 of the ITB provided: Waivers The Department may waive minor informalities or irregularities in bids received where such is merely a matter of form and not substance, and the correction or waiver of which is not prejudicial to other bidders. Minor irregular- ities are defined as those that will not have an adverse effect on the Department's interest and will not affect the price of the Bids by giving a bidder an advantage or benefit not enjoyed by other bidders. Section 1.18.1 of the ITB provided: Award of the Contract The Department intends to award a contract to the responsible and responsive bidder who bids the lowest cost as identified in Form "C", Bid Blank, attached hereto and made a part hereof. The ITB did not specify a minimum number of employees, vehicles or hours of service for a bidder to be deemed responsible or responsive. At all times material to this case, Kemp has been in continuous business for the past two (2) years, and completed form "F" with the information requested regarding work experience and references. The Department's agent, Mr. Gentile, checked with two of the references listed by Kemp to verify information relative to this bid requirement. At all times material to this case, Kemp had at least two years experience providing at least two (2) of the six services outlined in the scope of services. The Department's agent, Mr. Gentile, checked with two of the references listed by Kemp to verify information relative to this bid requirement. While Mr. Gentile was authorized to check with all references listed by Kemp, the failure to do so does not discount the information obtained from the sources that were checked. Kemp had an appropriate occupational license to perform work in the tricounty area, but did not have occupational licenses with the City of Hollywood or Broward County. At all times material to this case, Kemp maintained a warehouse to secure the equipment to be used such as lawnmowers, trimmers, and cleaning supplies/equipment. After the bid protest was filed, the Department verified that Kemp had used the warehouse as it claimed. No evidence to the contrary was presented. The mailing address Kemp listed on the first page of its bid response was 8637 S. Sutton Drive, Miramar, Florida. Mr. Faluade resides at that address. He listed that address for mail purposes. The business address for Kemp listed on the bid response was 6200 Johnson Street, Miramar, Florida. This address is a store-front facility with limited office equipment and furniture. Kemp maintains an office at this location but stores its equipment elsewhere as noted above. Kemp was the lowest responsive, responsible bid for ITB-DOT-94-95- 4004.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Transportation enter a final order dismissing Petitioner's challenge to the award of ITB-DOT-94-95-4004 to Kemp Services, Inc. DONE AND RECOMMENDED this 14th day of February, 1995, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of February, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-5967 Rulings on the proposed findings of fact submitted by the Petitioner: Paragraphs 1 through 4, 6, and 8 are accepted. With regard to paragraphs 5, 7, and 16 noting that the additional emphasis is not in the text and that the citations are incomplete (and perhaps misleading), they are accepted. Paragraph 9 is rejected as contrary to the weight of credible evidence. Paragraph 10 is rejected as contrary to the weight of credible evidence. Paragraph 11 is rejected as incomplete, and therefore, misleading. Corporate documents may have been filed on that date, however, the weight of the credible evidence established that Kemp had been in business the requisite amount of time. Paragraph 12 is rejected as incomplete, and therefore, misleading. The business conducted by the Kemp personnel continued regardless of the business entity structure that was used. Paragraph 13 is rejected as contrary to the weight of credible evidence. Paragraph 14 is rejected as contrary to the weight of credible evidence or irrelevant. Paragraph 15 is rejected as contrary to the weight of credible evidence. Paragraph 16 is rejected as contrary to the weight of credible evidence. Moreover, no credible evidence was presented to establish that Kemp did not provide services as described in the ITB or that it was not in business the requisite time. Paragraph 17 is rejected as incomplete, and therefore, misleading. The mailing address listed by Kemp was a residential address. Paragraph 18 is rejected as irrelevant. Paragraph 19 is rejected as contrary to the weight of credible evidence. Paragraph 20 is rejected as irrelevant. Kemp probably does not have a Leon County occupational license either. It did have an appropriate occupational license at all times material to this case. Rulings on the proposed findings of fact submitted by the Respondent: 1. Paragraphs 1 through 29 are accepted. COPIES FURNISHED: Thomas H. Duffy Assistant General Counsel Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0450 Mitchell B. Polay Mark H. Klein 750 S.E. Third Avenue Suite 205 Fort Lauderdale, Florida 33316 Thornton J. Williams General Counsel Department of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450
The Issue Whether Respondent should sustain Petitioner's challenge to the preliminary determination to reject Petitioner's bid as not responsive to Respondent's Invitation to Bid No. SB 91C-284V and to award the contract to another bidder that submitted a higher bid?
Findings Of Fact Based on the record evidence, the following Findings of Fact are made: On March 12, 1991, Respondent issued Invitation to Bid No. SB 91C-284V (hereinafter referred to as the "ITB") through which Respondent solicited the submission of bids to supply Respondent with prestressed concrete poles for a one year period beginning May 16, 1991. The ITB was a multi-page document with various component parts. Bidders were instructed on the first page of the ITB to complete and "RETURN ONE COPY OF ALL BID SHEETS AND THIS [BIDDER ACKNOWLEDGMENT] FORM." They were advised elsewhere on the first page of the ITB that "[o]ne copy of all bid documents that ha[d] page numbers, and this executed Invitation to Bid [Bidder Acknowledgment] [F]orm [had to] be returned for the Bid to be considered." The advisement concerning the requirement that all numbered pages had to be returned for a bid to be considered was repeated at the bottom of each numbered page of the ITB. Directly beneath the Bidder Acknowledgment Form on the first page of the ITB was the following provision: This Invitation to Bid, General Conditions, Instructions to Bidders, Special Conditions, Specifications, Addenda and/or any other pertinent document form a part of this proposal and by reference are made a part thereof. The ITB further provided, among other things, that "[i]n the best interest of [Respondent], [Respondent] reserve[d] the right to reject any and all bids and to waive any irregularity in bids received." Petitioner and South Eastern Prestressed Concrete, Inc. (South Eastern) submitted the only bids in response to the ITB. In accordance with the ITB'S instructions, Petitioner completed and returned to Respondent the Bid Summary Sheet, on which it indicated its price offer. It also completed and executed the Bidder Acknowledgment Form and returned it, along with the entire first page of the ITB, to Respondent. Petitioner, however, failed to return, as part of its bid submittal, all of the numbered pages of the ITB. Omitted from Petitioner's submittal were numbered pages 3 and 4. These missing pages contained paragraphs A. through N. of the ITB's Special Conditions, which covered the following subjects: A. Scope; B. Delivery; C. Award; D. Term of Contract; E. Brand Name; F. Catalog Cuts; G. Estimated Quantities; H. Bid Exempt; I. Bidders Responsibility; J. Corrections; K. Joint Bidding, Cooperative Purchasing Agreement; L. Withdrawal; 1/ M. Minority Certification Application; and N. Public Entity Crimes. There was nothing on numbered pages 3 and 4 of the ITB that the bidder needed to fill out or sign. While paragraphs M. and N. of the ITB's Special Conditions did make reference to certain forms that the bidder had to complete and submit to Respondent, these forms did not appear on either numbered page 3 or numbered page 4. They were separate documents. Petitioner completed these forms and submitted them to Respondent pursuant to the requirements of the Special Conditions. Petitioner did not propose in its bid submittal any contract terms or conditions that were at variance with those set forth in paragraphs A. through N. of the ITB's Special Conditions. Petitioner did not intend to signify, by failing to return numbered pages 3 and 4, any unwillingness on its part to adhere to contract terms and conditions set forth on those pages. Of the two bids submitted in response to the ITB, Petitioner's was the lowest. A preliminary determination, though, was made to reject Petitioner's bid because Petitioner had not returned numbered pages 3 and 4 of the ITB and to award the contract to South Eastern as the lowest responsive bidder. It is this preliminary determination that is the subject of the instant bid protest filed by Petitioner.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Palm Beach County School Board enter a final order sustaining the instant bid protest and awarding to Petitioner the contract advertised in Invitation to Bid No. SB 91C-284V. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of June, 1991. STUART M. LERNER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of June, 1991.
The Issue The issues to be considered in the course of this Recommended Order concern the question of whether Baxter's Asphalt & Concrete, Inc. or White Construction Company, Inc. should be accepted as a successful bidder on State Project No. 53050-3514, Jackson County, Florida, as advertised by the State of Florida, Department of Transportation.
Findings Of Fact The State of Florida, Department of Transportation, (DOT), advertised for bids on State Project No. 53050-3514, Jackson County, Florida. This was a project in which DOT had determined that 10 percent of the funding within the State Department of Transportation Trust Fund, as allotted for the project, would be devoted to economically disadvantaged individuals, also referred to as Disadvantaged Business Enterprises (DBE). This decision was in keeping with Section 339.081, Florida Statutes. Consequently, interested bidders were called upon to submit bids reflecting a DBE participation of a minimum of 10 percent of the bid submitted. Baxter's Asphalt & Concrete, Inc. (Baxter) and White Construction Company, Inc. (White) responded to the bid opportunity. The bids were opened on July 25, 1984, and Baxter's bid was the apparent low bid. The bid amount was $882,641.25. White was the second low bidder offering a bid of $928,353. Both bids were within the DOT estimate of construction costs. When the bids were reviewed, Baxter's bid was rejected by DOT based upon the belief that the bid failed to meet the DBE 10 percent requirement or to offer explanation of good faith attempts by Baxter to comply with the DBE contract requirement amount. See Section 14-78.03(2)(b)4., Florida Administrative Code. No other claim of error was made by DOT on the subject of the acceptability of the Baxter bid. The White bid is conforming. In preparing the bid, bidders are required to use DBE Utilization Form No. 1 to reflect the amount of DBE participation as a percentage of the overall bid estimate. In submitting its form as part of its bid blank, Baxter indicated that the total project cost was $884,000, and indicated that Ozark Striping, a DBE subcontractor, would be given $20,000 of that work or 3 percent, and that Glenn Powell, DBE subcontractor, would be afforded 7 percent of the total contract in the amount of $55,000. The total percentage according to Baxter is 10 percent, thus meeting the required DBE participation. This form is found as part of the joint Exhibit No. 1 offered by the parties. In fact, the Ozark Striping participation was 2.26 percent, and the Glenn Powell participation was 6.22 percent, for a total of 8.48 percent of the estimate reflected in the Form No. 1. Contrasted against the actual estimate of $882,641.25, these projections constitute 8.49 percent of that estimate. Thus, they are less than the 10 percent required. Given the fact that this DBE projection is less than the 10 percent, and in the absence of any attempt to offer a good faith explanation why Baxter failed to comply with the requirement, the bid was rejected for this irregularity. The Contract Awards Committee of DOT, when confronted with the irregularity of the Baxter bid, then determined to recommend the rejection of all bids. This was in keeping with the fact that the difference between the unsuccessful apparent low bid, with irregularities, and the second low bid exceeded 1 percent of the contract amount. At the time of this decision to reject all bids, DOT felt that the difference would justify re-advertising the bids. That policy position had been abandoned at the point of final hearing in this cause, wherein DOT expressed the opinion that it would be better served to accept the bid of White, and not re-advertise, again for cost reasons. In the face of the initial action to reject all bids and in accordance with Section 120.53, Florida Statutes, Baxter and White appealed that decision and by that appeal requested recognition as a successful bidder. This led to the present Section 120.57(1), Florida Statutes hearing. Baxter has never attempted to offer a good faith explanation of its non-compliance. It chooses to proceed on the theory that the mistake in computation can be rectified by allowing Baxter to submit a supplemental Form No. 1, bringing its total above the DBE requirement. In its contention, Baxter indicates that Glenn Powell could have provided $126,000 of the DBE goal, which is in excess of the 10 percent requirement. Baxter also alludes to the fact that it had contacted other DBE enterprises, such as Oglesby and Hogg, Michael Grassing, and J.E. Hill. All told, Baxter indicates that if given the opportunity, it would allow $146,000 of DBE participation to include $126,000 by Glenn Powell, and $20,000 by Ozark. This comment is suspect, given the lack of compliance in the initial bid response, and the realization that within that bid response on the item related to Glenn Powell, the original amount of work attributed to Glenn Powell was $100,000, and was struck through in favor of the $55,000, leaving a fair inference that Baxter was attempting to meet the DBE goal with a projection as close to the 10 percent as could be achieved. They fell short because in adding the $20,000 for Ozark, and the $55,000 for Glenn Powell, the addition in the Form No. 1 showed $85,000, which is more than 10 percent of the $884,000 shown on the form, when in fact the two amounts were $75,000, and less than the 10 percent required. Baxter characterizes its mistake in computation as a technical error, which can be remedied without harm to the bid process. The Baxter position must be examined in the context of action by DOT relating to compliance with DBE requirements. Prior to June 1984, a time before the subject July 25, 1984 bid opening, bidders had been allowed to amend the Form No. 1 to show compliance with the DBE requirements or demonstrate good faith efforts of compliance. That amendment as to compliance through listing of the DBE subcontractors or submission of good faith effort documentation had to be offered within 10 days per former Section 14-78.03, Florida Administrative Code. Beginning with the June 1984 bid-lettings, all documentation had to be submitted with the bid, reflecting compliance or describing good faith efforts at compliance per Section 14-78.03(2)(b), Florida Administrative Code, effective May 1984. This change was brought about to prevent the apparent low bidder, as indicated at the point of bid-letting, from shopping the quotations by the DBE's found in its original quote against other quotes from DBE's not listed in the bid documents initially submitted, and by amendment to the DBE statement prejudicing the former DBE group. The change was also made to avoid the possibility that the apparent low bidder could evade his bid by rendering it non-conforming, in the sense of refusing to submit the required documentation of compliance with DBE requirements or to the offer of a good faith explanation of non-compliance after the bid-letting. The change of May 1984, removed the possibility of bid shopping and bid avoidance. Both versions of Section 14-78.03, Florida Administrative Code, pre and post May 1984, indicate that failure to satisfy the DBE requirements or offer a showing of a good faith attempt at compliance, would result in the contractor's bid being deemed non-responsive, and cause its rejection. Baxter has been able to comply with the DBE goals of DOT in its bidding prior to the present controversy.
The Issue The issue addressed in this proceeding is whether Petitioner or Intervenor submitted the lowest and best bid on Project No. RS-40.
Findings Of Fact On June 4, 1993, Respondent issued an invitation to bid (ITB) for Project No. RS-40 to develop the site for the future construction of a work camp in Holmes County. The work under Project No. RS-40 specifically included site preparation, grading, electrical work, sewage, utilities and fencing. The bids were due to be opened on June 29, 1993. Ten bids were submitted to the Department, including Petitioner, Panhandle Grading and Paving, Inc., and Intervenor's, Hewitt Contracting Co., Inc., bids. Panhandle's bid total was $815,734.00, and was the lowest monetary bid. Hewitt's bid total was $847,554.00, and was the third lowest monetary bid. Baxter Asphalt had the second lowest monetary bid. However, both Baxter and Panhandle's bids were disqualified as nonresponsive because neither company complied with the Department's prequalification requirements. Baxter did not protest the Department's bid award to Hewitt and Baxter is not a party to this action. On the other hand, Hewitt's bid was accepted since Hewitt had complied with the Department's prequalification requirements and was otherwise responsive to the ITB. Therefore, the Department awarded Hewitt the contract for Project No. RS-40 since in its opinion Hewitt was the lowest responsive bid on the project. The ITB clearly notified potential bidders that they must prequalify with the Department. The ITB stated, in pertinent part: All bidders must submit evidence that they are qualified to perform the work in accordance with Section B, paragraph B-2 of the specifications. Evidence of eligibility must be submitted to the owner (defined in article B-1) not later than five (5) calendar days prior to bid date. Additionally, the cover sheet for the bid documents admonished all bidders to submit evidence of their eligibility to bid to Respondent at least five (5) days before the bid letting. The cover sheet stated: All bidders on this project must prequalify according to the provisions of section B, "Instructions to Bidders", article B-2. Evidence of eligibility must be submitted to the owner (defined in article B-1) not later than five (5) calendar days prior to bid date. Section B-1 of the bid documents defines the owner of Project RS-40 as the Department of Corrections. Section B-2 of the bid documents instructed all bidders to prequalify with Respondent to participate in the bid process. Section B-2 states: Prequalification: Each bidder whose field is governed by Chapter 399, 489, and 633 of the Florida Statutes for licensure will be prequalified by the Department to participate in the bid process for a specific field or area of construction based on the bidder's area of license or certification. Bidder qualification requirements and procedures are established by the State of Florida, Department of General Services rule (Chapter 13D-11, Florida Administrative Code) and by the bidding conditions and specifications. Failure of the bidder to strictly meet and follow all such requirements and procedures may result in bid rejection or disqualification for contract award. For the bidder's convenience, the provisions of Rule 13D-11.004 Bidder's Qualifications Requirements and Procedures are set forth below. Requirements: Each potential bidder must present, or have presented within this current biennium (July 1 through June 30) odd number years, evidence that: He is authorized to perform the work required by these documents in accordance with the applicable provisions of Florida Statutes governing contractors, as a general (Insert contractor designation) contractor. If the Bidder is a corporation, he must submit evidence that this corporation is properly registered with the State of Florida, Department of State, Division of Corporations, and holds a current State Corporation Charter Number in accordance with the Florida Statutes. (*This sentence to be deleted by Architect- Engineer if not applicable.) All interested firms who have NOT qualified within the current biennium (July 1 thru June 30) odd number years must submit evidence of their eligibility during the bidding period, not later than five (5) calendar days (received date) prior to the bid date. The Owner may, for good cause, allow a firm to correct any deficiencies in evidence submitted. Notice of qualification will be mailed to each bidder, but a Bidder may not receive the written notification prior to a bid opening. He may learn his status prior to the bid opening time by calling the Owner (Department of Corrections), Bureau of Facilities Services at 904-487-1330). The Bidder shall submit the required evidence of eligibility to the Department of Corrections, Bureau of Facilities Services, 2601 Blairstone Road, Tallahassee, Florida 32399-2500. (emphasis supplied) All information shall indicate the full name, address and telephone number of the individual, partnership, or corporation, and the name of the contact person. Include a self-addressed stamped envelope. The names of all bidders will be checked against the list of contractors who have prequalified in accordance with the requirements of Section B-2. Additionally, a careful reading of Rule 13D-11, Florida Administrative Code, reveals that the information required under the Rule should be submitted to the owner of the project involved in the bid process, i.e. the Department of Corrections in this case. A contractor is the person who is qualified and responsible for an entire project and includes the person who submits a bid for a given project. Section 489.105(3), Florida Statutes. A general contractor is a person who is unlimited as to the type of work they can do, unless a specific type of license is required by Chapter 489, Florida Statutes. Section 489.105(3)(a), Florida Statutes. See also Section 489.113, Florida Statutes. Under Chapter 489, Florida Statutes, a contractor can be a certified general contractor or a registered general contractor. A certified general contractor can contract in any jurisdiction in the state without fulfilling the competency requirements of the local jurisdiction. Section 489.105(8), Florida Statutes. On the other hand, a registered general contractor is required by Section 489.117(2), Florida Statutes, to comply with all local licensing requirements. Registration with the state is specific for a given local jurisdiction and cannot be used in another jurisdiction. Section 489.113(2), Florida Statutes. In fact, Section 489.113(1), Florida Statutes, requires a contractor to be registered for a specific jurisdiction prior to engaging in the business of contracting. Additionally, a contractor must subcontract electrical, mechanical and plumbing work unless the contractor is state certified or holds the specific trade license required by the appropriate local authority if such a local license is required. Section 489.113(3), Florida Statutes. Importantly, Chapter 489, Florida Statutes, permits a person to act as a prime contractor, including submitting a bid on a project, where the bulk of the work under the contract is covered by the contractor's specific license, as long as the parts of the project for which he is not licensed are subcontracted to persons holding an appropriate license. Section 489.113(9), Florida Statutes. Respondent requires prequalification of contractors in advance of its bid lettings to ensure that everyone who bids is legally or financially qualified to do the work required in the bid. The five (5) day deadline prior to the bid letting gives Respondent's staff an opportunity to resolve any irregularities in a bidder's prequalification materials prior to the letting. Indeed, if a contractor is state registered, as opposed to state certified, Respondent's staff, prior to the bid, routinely contacts the local government with jurisdiction over the building site to determine if there are any local licensing requirements and if there are, to determine if the bidder/contractor is locally licensed in that jurisdiction. This process avoids the waste of time involved in reviewing a bid package from a bidder who cannot ultimately perform the work called for in the bid. More importantly, this process prevents a locally unlicensed registered contractor from having the ability to void a contract at its will after the bids are opened since it would be unlawful for the contractor to have either bid on a project located in a jurisdiction where the contractor was not licensed or enter into such a contract. The ability to refuse an award of a bid clearly constitutes an unfair advantage to the locally unlicensed registered contractor and could not be waived as immaterial by an agency. In this case, Hewitt is a certified general contractor and is therefore automatically qualified to work in Holmes County. Panhandle is a registered general contractor and can only bid on Project RS-40 if it has met the requirements for general contracting in Holmes County. The prequalification process requires a bidder who has not prequalified with Respondent during the current biennium to submit to Respondent his current state contractor license certification or registration, as well as his current corporate charter registration (if a corporation). When Respondent opened the bids for the Project, Petitioner had neither prequalified with Respondent nor obtained a license or certification of competency to engage in contracting work in Holmes County. Petitioner thought it was already prequalified under its prequalification with the Department of Management Services. However, prequalification with the Department of Management Services does not meet the requirements of the ITB which requires prequalification with the Department of Corrections. Panhandle did obtain the necessary licensure after submitting its bid and after the bids were opened. However, such belated licensure does not negate the unfair advantage created by Panhandle's failure to prequalify and be properly licensed prior to the bid opening as required by the bid documents.
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 Intervenor. DONE AND ENTERED this 4th day of October, 1993, 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 4th day of October, 1993.
Findings Of Fact This case concerns what is called a "turnkey lease." The program was developed by the State of Florida in 1971. It encompasses a situation whereby agencies seeking space for their operation may, after a specific need is determined that cannot be filled by existing adequate space, solicit competitive bids from developers for the provision of land and the construction of a building there sufficient to meet the agency's needs, for lease specifically to the agency requesting it. The Bureau of Property Management within DGS was given the initial responsibility to develop the guidelines, promulgate the rules, and seek statutory authority for such a program. The Bureau's current role is to work with agencies requesting this program. The agency certifies the need to the Bureau, in addition to the fact that there is no available existing space present. The Bureau then determines agency needs and gives the agency the authority to solicit the bids for the turnkey project. Once the bids have been solicited and the preproposal conferences have been held, the bids are then received, evaluated, and a recommendation for an award is forwarded by the agency to the Department of General Services. DGS reviews the supporting documents required by the provisions of the Florida Administrative Code and either concurs or does not concur in the recommendation. If DGS concurs, the submitting agency is notified and is permitted to then secure the lease. Once the lease has been entered into, it is then sent back to DGS for review and approval, as to the conditions, and thereafter the plans and specifications for the building are also referred to DGS for review and approval as to the quality and adequacy of the plans and specifications and code compliance. Section 255.249 and Section 255.25, Florida Statutes, sets forth the requirement for soliciting and awarding bids for lease space in an amount in excess of 2500 square feet. This provision requires that an award of this nature be made to the lowest and best bidder, and DGS subscribes to that standard in evaluating and determining whether or not it will concur with an agency's recommendation. In the instant case, DHRS advertised for bids for the construction of office space in Palatka, Florida for its District III facilities. Before seeking to solicit bids, District III staff conducted a search for other possible existing space within a five mile radius of the downtown area and located no adequate facilities. Thereafter, a certification of need was processed for a solicitation of proposals and approval was granted by DGS to follow through with the solicitation. A preproposal conference was advertised and held on October 14, 1983 and after review by those present at the conference, bid opening date was set for November 22, 1983. Thirty-two bid packages were distributed and twelve bidders submitted proposals. The public bid opening was held as scheduled at 2:00 P.M. on November 22, 1983, in Palatka, Florida by Robert E. Litza, Facilities Service Coordinator for DHRS District III. Of the bids submitted by the twelve bidders, the lowest bid was rejected because of the failure of the bidder to comply with the requirements of the bid package. Of the remaining eleven bids, the four lowest were evaluated with the understanding that additional high bids would be evaluated if the four lowest were found to be unacceptable. Among the four bids considered were bids of Chuck Bundschu, Inc.; Kenneth McGunn, the Intervenor (Mr. McGunn submitted five price schedules for his bid and of these only one was considered); Elizabethan Development, Inc.; and TSU. A recommendation by the evaluation committee which met at DHRS District III that Intervenor's bid be selected was forwarded to DGS in Tallahassee through the Director of DHRS's General Services in Tallahassee on December 22, 1983. The terms of the successful bid and the reasons for its being considered lowest and best are discussed below. The successful bid for the lease in question, lease number 590:8030, was, upon completion of the committee's evaluation, also evaluated by Mrs. Goodman in the Bureau of Property Management of DGS. She also considered the McGunn bid as the lowest and best of the eleven non-disqualified bids. In that regard, not only Mr. McGunn's bid but all of the twelve bids received were considered and reviewed not only at the local level but at DHRS and DGS Headquarters as well. In her evaluation of the proposal and the bids, Mrs. Goodman considered the documentation submitted by DHRS. This included a letter of recommendation supported by a synopsis of all proposals, the advertisements for bids, and any information pertinent to the site selection process. The letter from DHRS dated December 22, 1983, which recommended award of the lease to Mr. McGunn, included Mr. Litza's December 21, 1983 analysis and recommendation letter which, itself, was attached to McGunn's primary bid documents. Her analysis did not include a prior award recommendation and analysis from Mr. Litza, dated December 8, 1983. It also did not include the site plan, the floor plan for the proposed building, or a survey of the site, but these areas are considered to be within the discretion of the leasing agency. Their absence is not considered to be particularly significant. In her analysis, Mrs. Goodman found that Petitioner's bid was also responsive. However, comparing it with Mr. McGunn's bid, she and her staff found that the latter was the lowest bid submitted. The determing factor in her decision was cost. In determining that McGunn's bid was the lowest as to cost of all bids, Mrs. Goodman compared the average rate per square foot per year for each. This did not take into consideration proration of costs per year, but strictly the average over the fifteen years of the term of the lease (10 year basic plus 5 year option) . According to Mrs. Goodman, this same method of calculating cost has been used in every lease involving a turnkey situation and in fact in every lease since 1958 - as long as she has been with DGS. This particular method, admittedly, is not set forth in any rule promulgated by DGS. However, the agencies are instructed by DGS to advertise and bidders to bid on an average square foot basis, the basis utilized by Mrs. Goodman and her staff in analyzing the bids submitted. In that regard, the request for proposals does not, itself, indicate how the calculation of lowest cost would be made by DHRS and DGS but it does tell prospective bidders what information to submit. This procedure has been followed exclusively in situations like this for many years and many of the bidders have bid before using this same system. While Mrs. Goodman is not certain whether TSU has ever bid before, using this system, she does not consider it to be unfair because all bidders are considered on the same footing in an evaluation. They are notified of what information to submit and if they do so, their information will be considered along with all other bidders. Further, anyone who inquires as to the basis for evaluation will be given a straight and complete answer as to the method to be used. In the instant case, DHRS followed procedure for solicitation and evaluation utilized in the past and DGS followed its own policy in evaluating the submissions. In short, the primary consideration for DGS is the price factor and all other factors are considered to be within the expertise of the requesting agency. In Mrs. Goodman's opinion, based on the fact that she worked with the Florida Legislature on the development of the controlling statute, and helped develop the existing rule within DGS, that was the intent of the Legislature. Consequently since the statute requires award to the lowest and best bidder, it can be said that in this case the term "lowest" falls within the purview of both DHRS and DGS but "best" is solely within the purview of DHRS. Therefore, utilizing the lowest and best criteria and accepting the fact that the lowest bid may not be the best bid, the determination of "non-best" should be based on the reasonable "end objective" of the agency and need not be based on a criterion which is set forth in the bid proposal. In other words, it is not necessary for the agency to set forth the manner of evaluation it will use or the factors it will consider, according to Mrs. Goodman. With regard to the bid and evaluation committee process, Mr. Litza, the facilities manager for DHRS in Gainesville, was involved in putting together the bid package along with Mr. George Smith from Tallahassee, Litza's predecessor in the job in Gainesville. He worked with Mr. Smith in order to take advantage of Smith's experience in evaluating bids for leases. So far as he knew, the bid package contained minimum standards for all parts of the bid, and the package was, in fact, approved by officials in Tallahassee before being released. While no particular factors were identified to prospective bidders as being significant, Mr. Litza did conduct a bid conference for them prior to the date the bid was due and was available to answer any questions that prospective bidders might have. He did not receive any questions regarding the significance of any particular factor from any bidder. The bids were advertised and when received, were opened and read properly in accordance with the terms of the solicitation. When the bids were received and opened, it was seen that Mr. McGunn had submitted five different bids for the same project. Litza had not been confronted with this situation before and asked Mr. Smith what to do about it. Mr. Smith's reply was to put all five McGunn bids in with the rest and extract the lowest five of all bids. When this was done, Mr. McGunn was shown to have submitted two of the lowest five bids. In determining which were the lowest five bids, Mr. Litza utilized the average cost per square foot formula utilizing therein the entire 15,772 square feet authorized for the project. Once the five lowest bids were determined, Mr. Litza selected an evaluation committee made up of local Palatka DHRS supervisors except for the fiscal member, Mr. Foust, Mrs. Shinholster, Litza's secretary and Litza himself. He gave each of the members a score sheet with point values for each area. Each member filled out the form independently. Though he gave very little briefing to the evaluation committee, he admits that he did, in advance, tell each member that Mr. McGunn was the lowest bidder and should be awarded the highest points for criteria number 1, which related to cost. There were several irregularities in Mr. Litza's processing of the evaluation committee's results. For example, on the evaluation of the file conducted by member Sheryl Dollar, regarding criteria number 2, which relates to the conformity of space offered to the specific requirements contained in the invitation to bid (with a weight of 25 points), Mr. Litza admitted he lowered Mrs. Dollar's point award in that area from 35 to 25 without first checking with her to insure that his action would meet with her approval. While this is irregular, it is of little or no consequence since - the maximum number of points that could be given for that particular item was 25 and Mr. Litza's actions did not reduce that member's award to less than the maximum allowable. He contends that his action was based on what he considered to be a mistake on her part. In another apparent irregularity, Mr. Litza prepared a recommendation letter based on his and the other committee members' evaluation of the files to DHRS Headquarters in Tallahassee on December 8, 1983. In that letter, be indicated that McGunn would provide gas heat for the proposed building for free. Though McGunn had not specifically stated this, he implied it from the energy features paragraph in the Intervenor's bid. On the other hand, the bid by TSU contained an express comment offering to pay the utility charges. This specific provision was overlooked and omitted from the evaluation and report to Tallahassee by Litza, who contends that this omission was merely an oversight. There are other discrepancies as well. In his testimony, Mr. Litza indicated Mr. McGunn proposed to build one building but his letter of December 8th and that of December 21, 1984, both reflect two buildings. Here again, Mr. Litza explains this as the result of his being confused. Nonetheless, this erroneous information was referred to Mrs. Goodman at DGS. This is significant in that at the evaluation committee meeting, when the forms were given out, several of the members expressed a preference for a two-building complex. After the award, Mr. Litza secured agreement from McGunn to build two buildings. Mr. Litza admits that much of this was done in an attempt to insure that McGunn, as the low bidder, got the award. Mr. Litza equated the lowest bid with the best and had Petitioner been the low bidder, he contends he would have done the same thing. In most areas, he would not, however, have given Petitioner's four-building concept a high score because of the increased heat and air requirements of four buildings. Mr. Litza also downgraded Petitioner on that bid criteria which relates to the proximity of offered space to the clients to be served because Petitioner's site, he contends, was too close to the clients to be served. In this case, a housing project for low income families which make up much of the clientele to be served by DHRS, was located across the street from the proposed site offered by the Petitioner. Mr. Litza contends that he was thinking of the potential damage to the building because of increased activity by virtue of the facility being so close. There were other questionable areas in Mr. Litza's testimony. For example, he testified that though Petitioner provided 15 more parking spaces than Intervenor, this would result in mud being tracked in from the adjacent dirt road 200 feet away in greater quantities than in Intervenor's proposal. He also considered positively that the Intervenor's proposed site was closer to a restaurant than that of the Petitioner. Though it was recommended by DHRS Headquarters in Tallahassee that only two of the committee members be from the Palatka office, Mr. Litza disregarded that advice because, he contends, there was a morale factor in that office and the people assigned there wanted to have a part in this decision. Because of this, he allowed Ms. Stouffenberg to put five extra members of her staff on the committee. Nonetheless, the evaluation committee serves only in an advisory capacity. Its recommendation is no more than an advisory opinion. The ultimate decision as to which of the bidders should be awarded the contract is made at DHRS Headquarters in Tallahassee. Ms. Shinholster, a Clerk IV in the DHRS Gainesville office, who works as a secretary to Mr. Litza and several others, was advised she would be on the committee for the evaluation at the same time she was given the bid file. She did not get an opportunity to meet with other committee members to talk about the standards to be used, nor was she given any standards by which to evaluate the files. All she was told by Mr. Litza was that McGunn was the lowest bidder. She cannot explain how she accorded points on her evaluation sheets except that she gave the low bidder the highest number of points. Mr. George Smith, a Senior Analyst with DHRS in Tallahassee, relied on Mr. Litza's input when he made his recommendation to his superiors that the award should be made to McGunn. He also formulated his own opinion, based on his own analysis of the bids. He resolved any dispute regarding cost in favor of Mr. McGunn on the basis of the average rental, and regarding space, in favor of McGunn on the basis of the number of buildings. Dr. Perry, an economist with the University of North Florida, testified to the Federal Government's policy regarding the desirability of using the present value of money methodology and the determination of an acceptable discount rate or index in calculating the actual cost of the bids. Both experts, Dr. Perry and Dr. Scott, who testified for DGS, agree that the present value methodology is valid and presents a more accurate analysis of cost than the average rental cost methodology which does not utilize this theory. The major difference between the two was primarily in the percentage to be utilized in applying the discount rate. Whereas Dr. Perry adopted the Federal policy and suggested a 10 percent discount rate, Dr. Scott testified that a more viable percentage rate in November, 1983, at the time the award was to be made, would have been 3.3 percent. If the 10 percent rate were used, then the Petitioner's bid would be the lowest of all submitted. On the other hand, if the 3.3 percent rate were used, Intervenor's bid would be the lowest. If a different discount rate, that of 5.7 percent were to he used, the bid of Elizabethan Development Corporation would be low. It is at about the 6 percent point and above that Petitioner's bid becomes the lowest. Nonetheless, the State has not adopted the present value of money theory and the policy followed by the State is not to consider that methodology in analyzing costs. State policy is to use only the average rental methodology. There are no written instructions (rules) on evaluating bids for leases of this nature. Oral instructions given by DGS to each agency are that the average rate per square foot is to be computed using, if the square footage is constant, for each year of the lease, the basic square footage requested, multiplied by the rental rate proposed for each year of the basic lease, divided by the number of years. If the square footage is not constant in every year of the lease, evaluators are directed to apply the rate per square foot proposed in each year to the square footage to be utilized in that year, total up the annual rentals, total up the square footage involved, and divide to arrive at the average rate per square foot per year. Utilizing one or the other of those two methods in evaluating both the McGunn and the TSU bids, it becomes clear that the McGunn bid results in an average of $8.86 cost per square foot per year and the TSU bid an average of $9.58 per square foot per year. Recalculation of DHRS' evaluation by DGS showed the DHRS' figures as stated above were correctly arrived at. This procedure is followed on all turnkey and non-turnkey leases in the State of Florida. The reason the State uses this process instead of the present value of money process is because it is easy. DGS statistics indicate that most landlords in the approximately $32,000,000 worth of leases presently existing with the State are "Mom and Pop" landlords. These people are not normally trained lease evaluators. By using the straight average rental rate method, there are no arbitrary variables. It has always worked because people can understand it and all agencies which lease property in the State of Florida follow this procedure. Also, this procedure does not require computer-based calculations, and it does not require economists to work with it. Both latter reasons are amplifications of the first. In Mrs. Goodman's estimation, if the present value of money system were to be adopted, her division would have to hire at least two $30,000 per year economists and buy an in-house computer to operate the system. This additional cost, she believes, would far outweigh the paper savings to be realized by utilizing the present value of money system. As of the hearing date, considering all the factors, in Mrs. Goodman's opinion, DGS would nonetheless still recommend Mr. McGunn's bid as the lowest and best bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore RECOMMENDED that DHRS lease Number 590:8030 be awarded to Kenneth R. McGunn. RECOMMENDED this 5th day of September, 1984, in Tallahassee, Leon County, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1984. COPIES FURNISHED: Donald E. Holmes, Esquire William E. Townsend, Jr., Esquire Post Office Drawer D Palatka, Florida 32078-0019 James A. Sawyer, Jr., Esquire District III Legal Counsel Department of Health and Rehabilitative Services 1000 Northeast 16th Avenue Gainesville, Florida 32609 Stephen J. Kubik, Esquire Department of General Services Room 452, Larson Building Tallahassee, Florida 32301 H. Allen Poll, Esquire 112 South Main Street Gainesville, Florida 32601 Linda C. McGurn, Esquire 1717 Northeast 9th Avenue Gainesville, Florida 32301 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1321 Winewood Boulevard Tallahassee, Florida 32301 Ronald W. Thomas, Executive Director Department of General Services 115 Larson Building Tallahassee, Florida 32301
Findings Of Fact Respondent issued an invitation to bid on March 13, 1992. Bid number SB 92-244I involved the disassembly and removal of an existing walk-in freezer and the furnishing and installation of a new walk-in freezer at Coral Sunset Elementary School. The invitations to bid provided in paragraph Y of the Special Conditions: Failure to file a specification protest within the time prescribed in Florida Statutes 120.53 3.(b) shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. (sic) Bid specifications were included in the invitations to bid issued on March 13, 1992. Twenty-three bids were solicited. There were five responses. One of the responses was submitted by Choice Restaurant Equipment, Inc. ("Choice"). Choice is a vendor for equipment manufactured by Petitioner, Nor-Lake, Inc. ("Nor-Lake"). Nor-Lake is an out-of-state corporation with manufacturer's representatives in numerous states including Florida. 4, Petitioner, CHD Marketing Group ("CHD"), is the manufacturer's representative for Nor-Lake in Florida. CHD represents no other manufacturer of the product included in the bid response. Choice is a sales agent for CHD and other manufacturer's representatives in Florida. Choice sells the products of a variety of manufacturers but is the exclusive sales agent for CHD pursuant to a verbal agency agreement. Choice timely submitted a bid for bid number SB 92-244I on April 8, 1992, prior to the bid deadline of 2:00 p.m. on the same day. The successful bidder submitted its bid by Federal Express at 4:51 p.m on April 8, 1992. Respondent's Department of Purchasing and Stores (the "Department") had stated on March 13, 1992, when the invitations to bid were issued, that bid responses must be received by the Department no later than 2:00 p.m. on April 8, 1992, at the Department's address at 3980 RCA Boulevard/Suite 8044, Palm Beach Gardens, Florida, 33410-4276. Prior to April 8, 1992, the Department relocated to a new facility at 3326 Forest Hill Boulevard, West Palm Beach, Florida. The new address was posted at the old location and Department representatives were present at the old address to accept walk-in bids. Federal Express first attempted to deliver the successful bid at the Department's old address at 10:30 a.m. on April 8, 1992. Federal Express delivered the successful bid to the Department's new address at 4:51 p.m. At 2:00 p.m. on the same day, The Department announced that all bids were in and opened the bids that had been delivered. The successful bid and one other bid were delivered on April 8, 1992, after the public opening conducted at 2:00 p.m. on the same day. Bids were tabulated on April 9, 1992. Bid tabulations were posted on April 13, 1992, and the successful bid was announced. The successful bid was for $8,174.00. Three bids were lower than the successful bid. Choice's bid was for $7,742.56. The other two lower bids were for $8,020.00 and $6,620.00. All three lower bids were rejected as non- responsive. Choice's bid was rejected because it did not meet bid specifications for 22 gauge steel, thermostatically controlled door heaters, and reinforced steel door panels. CHD filed a Notice of Protest on April 14, 1992, and a Formal Written Protest on April 24, 1992. CHD's protest alleges that: Choice's bid was lower than that of the successful bidder; the successful bid was not timely made; the bids were not opened publicly in violation of bidding procedure requirements; and the bid specifications were arbitrary and capricious, favored one bidder, and that Choice's bid was responsive. Neither a notice of protest nor a formal written protest was submitted by Choice or Nor-Lake. Neither Choice nor Nor-Lake attended the informal protest conference conducted on April 30, 1992. On May 7, 1992, Respondent's Office of General Counsel issued its written notice of proposed agency action. The written notice recommended that the bid be awarded to the successful bidder and that CHD's protest be dismissed for lack of standing. CHD requested a formal hearing on May 14, 1992, and the matter was referred to the Division of Administrative Hearings for assignment of a hearing officer on May 15, 1992. The bid submitted by Choice was prepared by CHD but signed by the president of Choice. Neither Nor-Lake nor CHD signed a bid or were otherwise bidders of record for bid number SB 92-244I. Neither Choice, CHD, nor Nor-Lake, filed a notice of protest concerning the bid specifications within 72 hours after Choice received the notice of the project plans and specifications on March 13, 1992. The sole basis upon which CHD claims it is substantially affected is the adverse economic impact caused to it by the proposed agency action. The proposed agency action will result in lost sales from this and future transactions. CHD will lose commissions from this and future transactions. The dealer relationship between CHD and Choice will be damaged because Choice will not want to sell a freezer that is not acceptable to Respondent. The marketing strategy developed between CHD and Nor-Lake will be damaged because it is conditioned upon the award of public contracts.
Findings Of Fact On or about December 29, 1981, the College solicited sealed bids for construction of alterations and additions to the Technical and Gymnasium Buildings located on its campus in Madison, Florida. In response, seven general contractors submitted bids. (P-1, P-2, P-3.) Bids were publicly opened on February 9, 1982. Griffin Construction, with a bid of $536,575, was the apparent low bidder; the second lowest bidder was Long Contractors, with a bid of $539,512. (Testimony of Griffin, Sims, Rutherford; P-3, P-4, P-5.) After the low bid was identified, Tom McClanahan, representing Long Contractors, asked that the subcontractor list accompanying the low bid be opened. Griffin Construction's subcontractor list was then opened. McClanahan asked if the license and charter numbers of the subcontractors were listed. 2/ Upon learning that these numbers were not included on Griffin Construction's subcontractor list, McClanahan protested. (Testimony of Sims, Rutherford, Griffin.) At its February 15, 1982, meeting, the College District Board of Trustees ("Board") rejected the low bid of Griffin Construction on the sole ground that the omission of subcontractor license and charter numbers constituted a failure to comply with the conditions of the bid documents. 3/ The Board then voted to award the contract to Long Contractors, the second lowest bidder, on the ground that it was the lowest bid conforming to the bid documents. In so doing, the Board followed the College president's recommendation--a recommendation based on his belief that the non-complying bid must be rejected, that it did not involve a matter of Board discretion. (Testimony of Sims, Rutherford, Griffin; Stipulation of Parties; P-41.) The bid specifications contain instructions to bidders requiring "each Bidder . . . [to] submit with his proposal a list of the subcontractors who will perform the work . . . as indicated by the `List of Subcontractors' form." (P-1, P-2.) The instructions further provide: The applicable subcontractor license registration or certification number must be noted on the bid opposite his name, and in the event that the subcontractor is a corporation, his State Corporate Charter number shall also be noted. If the subcontractor is an out of state firm, their Charter number with the Secretary of State to do business in the State of Florida should also be noted. The "Listing of Subcontractors" form provided with the specifications contains column headings for the names and addresses of the subcontractors but does not contain a separate heading for the requested license or corporate charter numbers. 4/ The form states that the subcontractor list "is an integral part of the bid." (P-1, P-2.) The bid instructions further require bidders to evaluate and determine the qualifications of their listed subcontractors. The bidder shall have determined to his own complete satisfaction that a listed subcontractor has been successfully engaged in this particular type of business for a reasonable length of time, has successfully completed installations comparable to that which is required by this agreement and is qualified both technically and financially to perform that pertinent phase of the work for which he is listed. (P-1, P-2.) The bid documents expressly reserve to the College the right "to reject any or all bids, and to waive informalities." (P-1 P-2.) No bidder correctly listed the required license and corporate charter numbers on its "Listing of Subcontractors" form. Griffin Construction. Griffin failed to include any license or corporate charter numbers. However, by subsequent letters dated February 9 and February 18, 1982, and at hearing, it supplied the required subcontractor license and charter numbers. Long Contractors. Long listed for its roofing subcontractor a sheet metal registration number, not the required roofing license number. [A sheet metal registration does not qualify a contractor for roofing work. See, 489.105, 489.113, Fla. Stat. (1981).] For its electrical subcontractor, Long omitted the prefix, "ER" from the listed number. For its plumbing subcontractor, Long listed a mechanical registration number instead of the required plumbing certification or registration number. [A mechanical registration does not qualify a contractor to perform plumbing work. See, 489.105, 489.113, supra.] Of the four areas requiring state licenses--roofing, heating and air conditioning, electrical, and plumbing--Long listed correctly only the registration number for its heating and air conditioning subcontractor. Long incorrectly listed No. FO6962 as the corporate number of Gandy Enterprises, its painting subcontractor. This is the number of a related corporation, Industrial Coatings, Inc. Remaining Bidders. Of the five other general contractors submitting bids, two-- Richard Walker Construction Company and GRC Contracting, Inc.--omitted all subcontractor license and charter numbers. The other three bidders failed to completely list all the required numbers. (Testimony of Rutherford; P-11, P-12, P-13, P-14, P-15, P-16, P-17, P-34, P-37, R-1, R-5.) The project architect testified that the submittal of incorrect or incomplete subcontractor license and charter numbers was a deficiency which a bidder should be allowed to cure after bid opening. But the failure to submit any required "number" was a deficiency which, in his opinion, could not be similarly corrected. He failed, however, to supply a reasonable basis for drawing such a distinction. Therefore, his opinion on this question is given little weight. 5/ (Testimony of Rutherford.) Subcontractor license and charter numbers are readily obtainable and can be verified by contacting the pertinent state agency--the Florida Department of Professional Regulation, Construction Industry Licensing Board, or the Florida Department of State. (Testimony of Griffin, Rutherford; P-32, P-33, P- 34, P-35, P-36, P-37.) The project architect, William Rutherford, routinely requires the listing of subcontractor license and charter numbers on bids for public construction projects. The main purpose it serves is that it would enable him to identify the listed contractor, since sometimes subcontractors have similar business names. Although if he was uncertain about the qualifications of a subcontractor, he would ordinarily question the general contractor. (Testimony of Rutherford.) Although Mr. Rutherford has customarily required the listing of subcontractor "numbers" on public projects, he has never made any use of those numbers in the past. (Testimony of Rutherford.) The general contractor who is awarded the contract is responsible to Mr. Rutherford and the College for construction of the project in accordance with the bid specifications. If, after bid opening, a listed subcontractor is unable to perform, Mr. Rutherford would ordinarily arrange for substitution of a new subcontractor acceptable to the general contractor and owner. (Testimony of Rutherford.) Griffin Construction's failure to list the license and charter numbers of its listed subcontractors, and its subsequent curing of that failure, did not affect the amount of its bid 6/ by giving it an advantage or benefit not enjoyed by other bidders. The bid omission did not allow Griffin Construction the opportunity to change any material element of its bid after bid opening. The inclusion or exclusion of subcontractor "numbers" at bid opening does not affect the ability of a contractors to obtain the required bond, the quality of bidding general contractors, the quality of listed subcontractors, the quality of work performed, or any material feature of the competitive bidding process. (Testimony of Griffin, Rutherford.)
Recommendation Based on the foregoing, it is RECOMMENDED: That the construction contract in question be awarded to Vick Griffin Construction Company, the lowest responsible bidder. DONE AND RECOMMENDED this 29th day of April, 1982, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of April, 1982.
Findings Of Fact On October 26, 1976, the School Board of Orange County and ITEL Data Product Corporation (ITEL) entered into a lease agreement providing for the lease of data processing equipment to the Board from ITEL by which ITEL supplied a computer central processing unit (CPU) and related equipment. Concomitantly, by agreement, ITEL provided for servicing and maintenance of the equipment. In October, 1977, IBM announced its new 303X series of computers with delivery schedules to customers for the newly introduced equipment to take up to two years. IBM has had a long-standing policy, well-known in the data processing industry, of filling customer orders for equipment in the sequence in which they are received, called "sequential delivery." With public agency customers, such sequential orders are not envisioned by the agency nor IBM to be a firm order because of the often protracted procurement process, involving competitive bidding, that public bodies typically have to engage in before making such a major purchase. IBM therefore permits public agencies, such as the School Board in this case, to place non-binding orders in anticipation of a future procurement so that a sequential delivery position will be available to the public agency and thus cause no delay in acquisition of the equipment should IBM become the successful bidder upon a particular procurement. On October 6, 1977, the School Board placed a "reservation" for an IBM 3031 CPU and related data processing equipment. In a letter of October 11, 1978, the School Board informed IBM that this equipment would be needed in approximately November, 1979, subject to availability of funds and subject to IBM being selected as a winning vendor in a competitive bidding process. There was no executed contract or other commitment between IBM and School Board at this point in time. Sometime in the summer of 1979, the School Board, which had become dissatisfied with the service and maintenance it had received from ITEL pursuant to the ITEL lease, engaged certain members of its staff in a study regarding its future data processing equipment needs. The School Board staff study resulted in a determination by the staff, and ultimately by the Board, to acquire additional data processing equipment capacity in excess of the capacity supplied under the ITEL lease. On August 28, 1979, the School Board terminated the ITEL lease effective December 31, 1979, and on or about September 5th, notified ITEL of that termination. On or about October 2, 1979, after determining that it wished to lease new and greater capacity equipment, the School Board Issued an "Invitation to bid" to eleven vendors, providing for the leasing, with option to purchase, of an IBM 3031 CPU and related equipment "or their equal." In response to this invitation to bid, ITEL, Menrex Corporation, as well as IBM, submitted bids and on November 13, 1979, the School Board rejected all the bids as being not responsive, as it had reserved the right to do in the invitation to bid document. The rejection of these bids on November 13, 1979, provided only slightly over a month during which the School Board would have to acquire equipment by rental or purchase and have it installed, since the ITEL lease would be terminated on December 31, 1979. Accordingly, acting on the advice of counsel, the School Board determined that it could legitimately develop an interim emergency leasing plan for meeting its data processing needs upon the expiration of the ITEL lease starting December 31, 1979. This leased equipment was expected to be in place for approximately three to six months or until such time as a new bidding effort and procedure could be developed. The School Board, upon advice of counsel, determined that under its procurement regulations, it could rent equipment on a month to month basis without engaging in a competitive bidding process if it solicited quotations from at least three vendors. Thus, on November 13, 1979, the School Board solicited quotations from three potential vendors, Comdisco, ITEL and IBM, for purposes of securing an interim rental of an IBM 3031 CPU, "or equal", and related equipment. IBM and the Petitioner herein, NAS, which is the successor in interest to ITEL, responded to the solicitation of quotations and NAS informed the Board that it could not supply the particular equipment specified, but offered a NAS CPU at a monthly charge and suggested other related equipment to the Board that NAS considered to be suitable. The School Board staff informed NAS that the CPU unit itself would be a suitable alternative to the IBM 3031 CPU mentioned in the solicitation of quotations. On November 20, 1979, the School Board elected to select IBM's quotation and entered into the lease arrangement with IBM on a month-to-month rental basis. NAS did not challenge that action by the School Board. This rental agreement was entered into on or about December 7, 1979. It was a standard IBM lease and contained a provision whereby IBM offered the customer an option to purchase the equipment, although there was no obligation imposed therein on the customer to purchase the equipment, which was the subject of the lease. The agreement provided that the customer would be contractually entitled to certain "purchase-option credits" or accruals if it was leasing the equipment on a long-term basis and subsequently elected to exercise the option to purchase that same equipment. IBM grants such purchase-option credits as a general rule in month-to-month rental situations such as this, although they are not always a matter of contractual right on behalf of the customer. In any event, no consideration was shown to have been given at the time of entering this rental agreement to the existence or non-existence of any purchase-option credit provision since the only authorized contract at that time was a month-to- month rental agreement. No purchase or option to purchase which would be binding on either party was contemplated since both IBM and the School Board were aware that before a purchase of this magnitude could be made, that a competitive bidding procedure must be utilized. Equipment was installed pursuant to the rental agreement in December, 1979. Neither at the time of the contracting, nor at the time of the installation of the IBM 3031 CPU, did NAS or Comdisco challenge the award of the month-to-month rental contract to IBM. In early 1980, the rental agreement being only temporary, the School Board began studying various alternatives for making a permanent acquisition of needed data processing equipment. In early May of 1980, upon advice of its attorney and various staff members assigned to study the matter, the School Board determined that it would be more economical for the School Board to purchase a CPU and related equipment and service either by cash or installment payment, than to continue renting a CPU and related equipment or to lease those items with an option to purchase as had originally been contemplated in the October, 1979, aborted procurement effort. Thus, it was that on about April 20, 1980, the School Board appointed a committee of five persons to help draft technical specifications to ultimately be promulgated in bidding invitation documents with a view toward acquiring the required data processing equipment through competitive bidding and ultimate purchase. The committee included School Board employees and outside consultants with knowledge of the field of data processing. The members were: Louis Nall, Education Consultant with the Florida Department of Education; Kim Anderson, Information Systems Consultant with the Florida Department of Education; David Andrews, Coordinator, Systems Support, School Board; Mike Staggs, Coordinator, Operations for the School Board; and Craig Rinehart, Director of the Systems Development/Systems Support staff of the School Board. Upon this committee agreeing upon required specifications for the equipment to be acquired, the bidding documents or "invitation to bid" and related supporting documents were developed by the committee in conjunction with assistance of certain other members of the staff of the Board as well as the School Board's attorney. The bid documents were approved by the School Board on May 27, 1980, and they were issued on May 23, 1980, to eight potential vendors, including NAS, IBM, and Amdahl Corporation. The bid documents invited bids for the sale of an IBM 3031 CPU and related equipment "or their equal" (plus service and maintenance) for delivery no later than July 15, 1980. In addition to specifying an IBM 3031 CPU and related equipment "or their equal.," the pertinent specifications contained in the invitation to bid documents provided as follows: The manufacturer of the equipment described in the bid was required to currently manufacture it and offer for sale or lease along with it, an upgradable attached word processor subsystem the same as, or equal to, the IBM 3031 "attached pro- cessor." The Central Processing Unit, or CPU, being bid had to be capable of hosting or accommodating an attached processor. (The purpose of requiring this was so that the School Board could later ob- tain more processing capability if and when it needed it, rather than having to pay for more capacity than it needed at the time of the initial purchase. The vendors were not required by the bidding documents, however, to bid at the time of this procurement for the actual sale of such an attached processor, to be added later.) The School Board reserved the right to reject any and all bids and to waive any informal- ity in any bid. The bid documents initially stated that the School Board would not pay any separately stated interest or finance charges in arriving at its total purchase price for all equipment to be bid. Each bidder was required to offer a certain number of support or maintenance personnel in the Orlando area at the time the bid was submitted and the Board would enter into a separate service and maintenance agreement with the successful vendor. NAS did not protest the bid specifications contained in the invitation to bid documents. NAS did request and receive several interpretations and clarifications of the bid documents from the Board in a manner favorable to NAS. These favorable clarifications or interpretations were as follows: The unavailability of serial numbers for data processing equipment at the time the bid was prepared would not adversely affect the bid's validity. NAS could temporarily rent equipment from other manufacturers which it could not itself deliver by the July 15, 1980, date required in the bid documents. (emphasis supplied) NAS would be deemed by the Board to comply with the requirement that support personnel be present in the Orlando area, provided it had the required support personnel in the area at the time the equipment was actually delivered, rather than at the originally stated time of submission of the bid. The NAS 7000N CPU, which was a computer of greater capacity than the IBM 3031, even after the IBM had the attached processor added, was specifically determined by the Board to be con- sidered as equivalent to the IBM 3031 and thus ap- propiately responsive to that specification and the invitation to bid documents. NAS would be deemed by the Board to comply with the term "manufacturer" even though NAS did not in itself manufacture the equipment, but only marketed it for the maker, Hitachi Corporation. IBM also had a role in determining and securing clarifications or interpretations of the specifications in the invitation to bid from the School Board. Thus, it was that IBM suggested that the Board could save money if it allowed each vendor (not just IBM) to separately state an interest or finance charge in its bid, since IBM was of the opinion that the Internal Revenue Service would not tax as ordinary income to the vendor any separately stated interest charges or financing charges received by such vendor from a public governmental body such as the School Board. Thus, to the extent that vendors could save on income taxes from the total payment, if successful, then the School Board could reasonably expect all vendors to submit correspondingly lower bids in response to the invitation to bid. In response to IBM's request, the School Board amended the bid documents to allow a "separately stated time-price differential" for any item of equipment, not to exceed seven and one-half percent of that item of equipment. At NAS' request, the School Board also amended the bid documents to state that a single central processor (the NAS 7000N), with equivalent power to the IBM 3031 CPU, which was upgradable in the field, would be an acceptable alternative to the requirement that a separate processor must be capable of being attached to the CPU in order to increase data processing capacity. In fact, the NAS 7000N actually has somewhat greater data processing capacity than the IBM 3031. A further amendment to the bid documents provided that in determining the lowest and best bid, the Board would consider each vendor's total charges for service, maintenance and support of the equipment for a one- year period following the award of bids. Additionally, at the request of IBM, an amendment was approved to the bid documents stating that instead of seeking equipment "new and not refurbished," that that requirement would be changed to "new and not refurbished or not more than one-year old." These amendments were sent to all potential bidders. Prior to disseminating the May, 1980, invitation to bid documents, the School Board established an Evaluation Committee to review and analyze bids to be received in response to those documents. The Committee was composed of the following individuals: David Brittain, the Director of the Educational Technology Section, Florida Department of Education; William Branch, Director of Computer Service, University of Central Florida; Louis Nall, Education Consultant, Florida Department of Education; Ronald Schoenau, Director of Northeast Regional Data Center, Florida University System; Craig Rinehart, Director of Systems Development/Systems Support of the Orange County School Board; Mike Staggs, Coordinator, Operations of the School Board; David Andrews, Coordinator, Systems Support, School Board; Dale Brushwood, Director of Production Control, School Board; and David Brown, Attorney for the School Board. The Evaluation Committee was charged with conducting a review and analysis in accord with certain instructions given by the Board and to recommend to the Board the bid the Committee believed was the lowest and best bid. The Committee was instructed that objectivity is of prime importance. Five vendors submitted bids in response to the Invitation documents, as amended. They were NAS, IBM, Amdahl, CMI and Memorex. On June 17, 1980, the bids were opened by the Board. On a recommendation of the Evaluation Committee, the School Board found the bids submitted by CMI and Memorex to be not responsive to the bid documents. The bids submitted by NAS, IBM and Amdahl Corporation were found responsive to the bid document. The Evaluation Committee met for approximately 5 hours evaluating the bids by a number of different criteria, including the consideration of both a one-year and a three-year maintenance cost, as well as an assumption arguendo that the bid documents did not merely call for the IBM 3031 CPU upgradable by the addition of an attached processor, as the specifications actually requested, but instead that the $330,000 (estimated) attached processor was to be bought at the outset from IBM. The result was that the Evaluation Committee reported that the IBM bid was the lowest and best response, even if the cost of a $330,000 attached processor was added to their bid, which was not actually to be the case because the attached processor was not included in this procurement process. Even had that been added to the IBM bid, making it the second lowest dollar bidder, the Evaluation Committee still felt it to be the lowest, best bid. The IBM bid for the 3031 CPU and related equipment was $1,412,643 plus a time-price differential of $58,738 for a total of $1,471,381. The related bid for service, maintenance and support for the first year was $74,201.34, making a grand total for IBM's bid of $1,545,582.34. The NAS bid for the sale of an NAS 7000N CPU and related equipment was the next lowest bid at $1,575,751 plus a time-price differential of $74,722 for a total of $1,650,473. The accompanying bid for service, maintenance and support for the first year was $64,603. The total of the NAS bid was thus $1,715,076. The Amdahl Corporation's bid was higher than either IBM or NAS. In evaluating and in arriving at the decision that the IBM bid was the lowest and best, the Evaluation Committee was concerned with the previous poor record of maintenance and support provided by NAS's predecessor in interest, ITEL Corporation, as well as by the fact that there were then no NAS 7000N computer systems installed in the United States, so that some knowledge of its performance record could thus be gained. Further, the residual value for NAS' equipment had not yet been proven to the extent that IBM's had. Thus, the Committee determined that the IBM bid would still be the lowest and best even had the attached processor, at an estimated cost at time of $330,000, been added to the bid, making it the second lowest in dollar terms because the IBM bid combined the least risk, with the maximum equipment capacity growth flexibility at maximum benefit to the School Board in terms of financial flexibility. The NAS machine would provide more capacity than the Board needed for several years at higher cost, without the Board having an option regarding when that extra capacity should be obtained. The financial flexibility benefit of the IBM bid in terms of allowing for future capacity growth was borne out because the attached processor, by the time it was actually acquired from IBM in 1982, only cost $172,000, due to price decreases made possible by technological advances. The Evaluation Committee unanimously recommended acceptance of the IBM bid as the lowest and best received, and in official session on June 24, 1980, after hearing presentations by an NAS representative, the School Board unanimously voted to award IBM the contract for the subject equipment. On July 1, 1980, the contract submitted by IBM was executed by IBM and the School Board. It provided for a purchase by the Board of the equipment and services described above, payable in two installments, $600,000 on or before August 15, 1980, and the balance on or before July 5, 1981. On July 16, 1980, NAS filed a petition for administrative hearing with the Board, also filing an emergency motion for stay with the School Board, seeking a stay of all further agency action on the contracts with IBM, including any payment, pending disposition of the case. On July 29, 1980, the School Board, after hearing argument of NAS counsel, denied that petition for Administrative Hearing and motion for stay on the basis that the contract between the Board and IBM had already been executed and that the NAS request for a 120.57(1), Florida Statutes, hearing was not timely. On August 4, 1980, NAS appealed the Board's decision to deny a hearing to the Fifth District Court of Appeal and also filed an emergency motion for stay pending appeal. The emergency motion requested the court to prohibit any further action pursuant to the contract, including payment of any sums pending determination of the issues raised in the appeal. On August 15, 1980, the court granted the emergency motion for stay on the condition NAS post a supersedes bond on or before August 18, 1980. On August 26, 1980, the court vacated that order because of failure to timely post the supersedes bond. The School Board then paid IBM the first installment payment of $600,000, when due, shortly thereafter. On May 6, 1981 the Fifth District Court of Appeal ultimately rendered a decision that NAS ". . . should have an opportunity to present evidence and arguments, pursuant to Section 120.57(1)(b)4, Florida Statutes, (Supp. 1980), that its bid was the lowest and best response to the bid document." Thus, the case was remanded to the Board to conduct an administrative hearing, and the Board referred the matter to the Division of Administrative Hearings. On June 4, 1981, NAS filed with the Board a motion for stay to prevent the Board from making the final payment to IBM on the purchase price. After hearing arguments of NAS' attorney, the Board, on June 23, 1981, denied the motion for stay and NAS appealed. On July 3, 1981, the Fifth District Court of Appeal affirmed the School Board's denial of the stay. Final payment was thereafter made by the Board to IBM, thus completing the purchase and all performance of the contract.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence in the record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is RECOMMENDED: That a final order be entered by the School Board of Orange County denying the relief requested by the Petitioner. DONE and ENTERED this 22nd day of September, 1983, in Tallahassee, Florida. P. MICHAEL RUFF, 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 22nd day of September, 1983. COPIES FURNISHED: John A. Barley, Esquire 630 Lewis State Bank Building Post Office Box 10166 Tallahassee, Florida 32302 William M. Rowland, Esquire Post Office Box 305 Orlando, Florida 32802 Peter J. Winders, Esquire Nathaniel L. Doliner, Esquire Post Office Box 3239 Tampa, Florida 33601 Daniel E. O'Donnell, Esquire 400 Colony Square, Suite 1111 Atlanta, Georgia 30361 James L. Scott, Superintendent Orange County Public Schools Post Office Box 271 Orlando, Florida 32802
Findings Of Fact By Invitation to Bid for Lease NO. 590:1944, Respondent invited lease proposals for approximately 15,206 square feet of office space "located within the following boundaries: On the North, Aloma Avenue/Fairbanks Avenue the East, Semoran Boulevard the South, Colonial Drive, and on the West, Mills Avenue." The geographic area includes as many as 100 office buildings, although the invitation only generated three bids. The Invitation to Bid announced a Pre-Bid Conference on December 22, 1987. Interested parties were directed to contact Linda N. Treml, whose telephone number was provided, for "bid specifications and information regarding the space." The Invitation to Bid stated that "[a]ny questions concerning this project are to be directed to [Ms. Treml]" and "prospective bidders are encouraged to consult with [Ms. Treml] beforehand in an attempt to enable as correct a bid submittal as possible." The Invitation to Bid required that certain attachments accompany the bid proposal and referred the prospective bidder to paragraph 9 of the Bid submittal Form. The required attachments included a scaled floorplan "showing present configurations with measurements," net rentable square footage calculations using floorplan measurements, and a preliminary site layout. The Invitation to Bid stated that Respondent reserved the right to waive any minor informalities or technicality and seek clarification" of bids received, when such is in the best interest of the state. Responding to Respondent's newspaper advertisement and direct-mail solicitation for bids, James W. Boyle, who is a real estate broker active in leasing and property management, requested from Ms. Treml an Invitation to Bid and Bid Submittal Form. Mr. Boyle regularly reviews announcements of forthcoming leasing activity by state agencies. If he is aware of a building that appears to meet the agency's requirements, he contacts the building's owner or manager and informs him or her that he may have a prospective tenant. After receiving the bid materials for Lease No. 590:1944, Mr. Boyle contacted Kathryn Doyle, who is the leasing manager of Petitioner, and learned that Petitioner could accommodate Respondent's space needs for the term sought in the Lakeview 436 office building. Mr. Boyle assisted Ms. Doyle in the preparation of the Bid Submittal Form for Petitioner. In his first conversation with Ms. Doyle, Mr. Boyle ascertained that Petitioner's building carried a Semoran Boulevard street address and in fact had direct access to Semoran Boulevard. Petitioner's building lies on the east side of Semoran Boulevard, which serves as the eastern boundary of the geographic area described in the Invitation to Bid. Three bids were submitted in response to the subject Invitation to Bid. When they were opened, Ms. Treml and her supervisor, George A. Smith, determined that bids of Petitioner and a third party were nonresponsive because their office buildings were outside the geographic area specified in the Invitation to Bid. These bids were not considered further. Mr. Boyle had previously represented the owners of the FARE building several months earlier in a bid for Lease No. 590:1895. The Invitation to Bid in that case, which was issued by Respondent and named Ms. Treml as the contact person, provided that the proposed office space must be located within the following boundaries: Beginning at the intersection of US 17-92 and Colonial Drive, then west on Colonial Drive to the intersection of Edgewater Drive, then north on Edgewater Drive to the intersection of Kennedy Blvd. . ., then east on Kennedy Blvd. . . . to the intersection of US 17-92, then south on US 17- 92 to the point of beginning." Although Mr. Boyle's client was not awarded Lease NO. 590:1895 for reasons not relevant here, his client's bid, as well as the bid of another unsuccessful bidder owning a building on the east side of the highway serving as the east boundary of the geographic area, were considered responsive and thus within the specified geographic area. Ms. Treml interpreted the boundary description in Lease NO. 590:1944 differently from the boundary description in Lease NO. 590:1895. The description for Lease NO. 590:1895 defined the boundaries by "beginning" at a certain intersection, then proceeding "on" a highway, and so on. The description for Lease NO. 590:1944 defined the boundaries by identifying landmarks "on the north," then the "east," and so on. At the time of assisting in the preparation of Petitioner's bid, Mr. Boyle was also aware of an Invitation to Bid issued by Respondent for Lease NO. 590:1875. In this case, Respondent specified office space "in the following area of Brevard County, Florida: Beginning at the intersection of U.S. Highway 1 and State Road 50, then West on SR-50 to the intersection of 1-95, then North on 1-95 to the intersection of SR-406 . . . then East on SR-406 to the intersection of U.S. 1, then South on U.S. 1 to the point of beginning." In the case of Lease NO. 590:1875, the bid contact person, Lynn Mobley, issued a clarification letter stating that any building located on either side of the boundary road with an address on the boundary road would be considered to be within the boundary. Ms. Mobley and her supervisor, Ernest Wilson, who are Respondent's District 7 Facilities Services Assistant Manager and Manager, respectively, have consistently advised potential bidders that a building located on a boundary highway is included in the geographic area even though it would be outside the area if the dividing line were the centerline of the highway. Mary Goodman, Chief, Bureau of Property Management of the Department of General Services, testified that, in the course of her review of leasing activities by various state agencies, she has historically guided agencies that, if a building abuts a boundary highway but is not, strictly speaking, within it, the agency "could waive that as a minor technicality and consider it a responsive bid." Neither Mr. Boyle, Ms. Doyle, or any other representative of Petitioner spoke to Ms. Goodman prior to submitting the subject bid proposal. Ms. Treml customarily waives minor irregularities in bid submittals. However, she does not treat the location of a building outside the geographic area as a minor irregularity. To do so would be unfair to owners of other buildings outside the geographic area who took the geographic description at its face value and never submitted bids. Ms. Doyle received the bid materials from Mr. Boyle after the Pre-Bid Conference had taken place. However, Mr. Boyle elected not to attend the Pre- Bid Conference at which Ms. Treml explained, among other things, her interpretation of the specific geographic area. He chose not to attend because he felt that he would not learn anything relevant at the conference, which was attended by a representative of Intervenor. Neither Mr. Boyle, Ms. Doyle, or any other representative of Petitioner contacted Ms. Treml prior to submitting Petitioner's bid. Mr. Boyle, whose compensation in this case is entirely contingent upon a successful bid, estimates that he spent about 20 hours working on Petitioner's bid. Ms. Doyle estimates that she spent about 40 hours working on the bid. Petitioner also spent $800 in obtaining an "as-built" drawing of the space that accompanied its proposal. By letter dated February 22, 1988, Respondent notified the bidders of its decision to award the lease contract to Intervenor. Petitioner filed a notice of intent to protest the award by letter dated February 24, 1988. Ms. Treml met Mr. Boyle and Ms. Doyle on March 1, 1988, and cited the location of Petitioner's building as the only reason for the determination of nonresponsiveness. The attempt at mediation having failed, Petitioner filed a formal written protest of the award by letter dated March 3, 1988. Petitioner attached to its bid proposal an "as-built" drawing. Although drawn to scale, the drawing did not bear the measurements of the then- present interior tenant improvements, mostly walls, nor did it disclose on its face any calculations showing how the rentable area was computed from the gross area. These omissions were due to Mr. Boyle's advice to Ms. Doyle that such information would be unnecessary in this case. The omissions from Petitioner's "as-built" drawing were rendered less critical by the fact that Respondent would have the right under the lease to require the landlord, at its expense, to remove the present improvements and re- configure the space to Respondent's demands. However, one purpose of the floorplan is to show where the space is located within the building. Another purpose is to verify the rentable area calculation by showing the measurements of items, such as restrooms, that should not be included in the rentable area for which Respondent is charged rent. The drawing is supposed to show the rentable area computation. Additionally, even though Respondent could insist on a total renovation of the premises, Respondent might wish to evaluate whether it could use a portion of the existing space in order to reduce the possibility of construction delays. George A. Smith, the Senior Management Analyst for Respondent who reviewed Ms. Treml's determination of nonresponsiveness prior to the award of the subject lease, testified that the deficiencies in Petitioner's "as-built" drawing were not a "minor irregularity."
The Issue The two major issues in this case are as follows: Was the failure of Datamaxx to submit resumes of training and maintenance personnel as required by Performance Mandatory No. 10 of the Invitation to Bid a material deviation from the Invitation to Bid such as to render Datamaxx a nonresponsive bidder? If Datamaxx was a nonresponsive bidder, must the contract be awarded to Burroughs, or must DHRS, pursuant to Section 13A-1.002(3), Florida Administrative Code, have the contract rebid, or seek single source procurement or negotiation approval from the Division of Purchasing?
Findings Of Fact Based on the admissions of the parties, on the testimony of the witnesses at the hearing, and on the exhibits received in evidence, I make the following findings of fact: For at least the past 10 years, the DHRS Data Communications Network has been maintained by Burroughs on a sole source basis. At the end of the previous Burroughs Terminal Maintenance contract with Burroughs, the Department of General Services (DOS) asked DHRS to bid the contract in lieu of sole source procurement, it being the belief of DOS that there was competition in this area. On or about September 19, 1986, DHRS published an Invitation to Bid which advised prospective bidders that sealed bids would be opened on October 20, 1986, for a contract, known as "Burroughs Terminal Maintenance" [Bid No. 86 ATM] regarding maintenance of the terminals of the DHRS Data Communications Network. The Special Conditions of the Invitation to Bid contained, among others, the following provisions: The State has established certain require- ments with respect to bids to be submitted by bidders. The use of "shall," "must" or "will" (except to indicate simple futurity) in this Invitation to Bid indicates a requirement or condition from which a material deviation may not be waived by the State. A deviation is material if, in the State's sole discretion, the deficient response is not in substantial accord with this Invitation to Bid requirements, provides an advantage to one bidder over other bidders, has a potentially significant effect on the quantity or quality of items bid, or on the cost to the State. Material deviations cannot be waived. (at p. 1) No negotiations, decision, or actions shall be initiated or executed by the bidder as a result of any discussions with any State employee. Only those communications which are in writing from the Department's Purchasing office may be considered as a duly authorized expression on behalf of the State. Also, only communications from bidders which are signed and in writing will be recognized by the State as duly authorized expressions on behalf of the bidder. (at p. 2) All personnel performing maintenance must be trained to service the equipment covered by this contract. Training shall be completed before the individual is assigned to service the equipment covered by this contract. Training shall be provided to whatever level is necessary to ensure the individual has the required qualifications to perform satisfactory maintenance service on Burroughs equipment listed in Attachment A of this Invitation to Bid. Bidder shall submit with their bid a summary of their Burroughs training program and resumes of personnel who will be performing this training and the resumes of personnel who will be per- forming the maintenance. (at p. 8) Bidder shall certify to the State, at the time the bid is submitted, that bidder has existing established service centers staffed with personnel trained to service the equipment covered by this contract . . . In lieu of this requirement, if bidder does not have existing established service centers, liaison office, and trained personnel, and bidder submits a plan for compliance, the required certification must be given the State no later than two (2) weeks prior to the anticipated starting date of the contract as indicated in the paragraph of this document entitled Calendar of Events. Failure to comply with this requirement shall result in rejection of the bid and award of the bid to the next lowest responsive bidder. The Invitation to Bid was drafted by the Department of Health and Rehabilitative Services. The only bidders on the contract (other than no- bids) were Burroughs and Datamaxx. DHRS found Burroughs and Datamaxx both to be responsive bidders and posted their bids making them public in the recognized manner of publicizing the bidder to be awarded a bid. Both bids were found to be responsive by DHRS at the time they were made public. The Datamaxx bid was the lowest bid and the Burroughs bid was the next to lowest bid. DHRS staff recommended the contract be awarded to Datamaxx. The Datamaxx bid was approximately $784,000 less than the Burroughs bid. In its bid Datamaxx indicated that it understood and agreed to all provisions of the Invitation to Bid, specifically including those dealing with Mandatory Requirements, Verbal Instruction Procedure, Rejection of Bids, Bid Evaluation, Performance Mandatories, and Certification. Datamaxx submitted the Certification required under the terms of the Invitation to Bid and did not submit a plan for compliance with its bid. Datamaxx never requested in writing that the requirement for resumes be waived, and DHRS never advised Datamaxx in writing that it did not have to submit the resumes. Datamaxx did not submit with its bid the resumes of training and maintenance personnel required under Performance Mandatory 10 of the Invitation to Bid. Performance Mandatory No. 10 required the submission of resumes with the bid, and did not concern an event that would take place after the bid had been let. DHRS considered the requirement for resumes to be a mandatory requirement. The qualifications of the persons who would be performing the maintenance under the contract would have a potentially significant effect on the quality of the maintenance provided. Nothing could be more material to the contract than the ability of the personnel to perform that contract. The difference in the dollar amount of the bids of Burroughs and Datamaxx influenced the decision of DHRS in finding Datamaxx to be a responsive bidder. This was a major reason Datamaxx was found to be a responsive bidder. In evaluating the Datamaxx bid, DHRS went outside the material provided in the Datamaxx bid. Subsequent to the posting of bids, DHRS met with Datamaxx and advised Datamaxx that its initial submission was deficient for not including resumes with the bid, that DHRS had waived the resumes, but that in order for DHRS to continue its recommendation that the bid be awarded to Datamaxx, DHRS had to have the resumes prior to the awarding of the bid. DHRS considered it an error and a deficiency in the bid that the resumes were not furnished. Datamaxx, on November 6, 1986, advised DHRS in a letter to Charles Ray that it would submit a plan which would address, among other things, service personnel resumes by November 17, 1986. DHRS could not have considered Datamaxx's letter of November 6, 1986, in evaluating whether Datamaxx was a responsive bidder, because that letter was not received until after DHRS had already found Datamaxx to be a responsive bidder and recommended that the contract be awarded to Datamaxx. Had Datamaxx not submitted the resumes prior to November 17, 1986, DHRS staff would have recommended that the award of the contract be withdrawn. The performance the State would receive under the contract would directly depend on the qualifications of the persons performing the service and the maintenance, and the resumes would be the only source of information regarding the qualifications of the personnel.
Recommendation For all of the foregoing reasons, it is recommended that a final order be entered to the following effect: Concluding that the bid submitted by Datamaxx USA Corporation on Bid No. 86 ATM should be rejected on the grounds that it is not responsive, Concluding that the bid submitted by Burroughs Corporation should be rejected on the basis of Rule 13A-1.002(3), Florida Administrative Code, and, Providing for the agency to issue a second invitation to bid/request for proposals or take other action provided by Rule 13A-1.002(3), Florida Administrative Code. DONE AND ENTERED this 25th day of June 1987, at Tallahassee, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 25th day of June 1987. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 86-4460B1D The following are my specific rulings on each of the proposed findings of fact submitted by both parties: Findings proposed by Petitioner Paragraphs 1 through 19 are accepted with a few minor editorial modifications. The first two lines of paragraph 20 are rejected as redundant. The remainder of paragraph 20 is accepted. Findings proposed by Respondent Paragraphs 1 and 2 are accepted in substance. Paragraph 3 is rejected as constituting unnecessary details. Paragraphs 4 through 7 are accepted. Paragraphs 8, 9, and 10 are rejected as irrelevant. Paragraph 11 is rejected in part as irrelevant and in part as contrary to the greater weight of the evidence. Paragraph 12 is accepted. Paragraph 13 is rejected as constituting irrelevant and unnecessary details. COPIES FURNISHED: Robert L. Powell Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Room 407 Tallahassee, Florida 32399-0700 Edgar Lee Elzie, Jr., Esquire MacFarlane, Ferguson, Allison & Kelly 804 First Florida Bank Building Tallahassee, Florida 32301 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
