The Issue Whether Respondent was justified in cancelling the award of bid of HRS Lease No. 590:2054 to Petitioner, BOOZER, on the basis that it was nonresponsive. Whether Respondent acted fraudulently, arbitrarily, illegally or dishonestly in issuing an award of HRS Lease No. 590:2054 to Intervenor rather than to Petitioners or some other bidder.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: HRS caused an invitation to bid to be advertised regarding Lease No. 590:2054 on January 3, 1989 and January 10, 1989. The Invitation to Bid required that all bids be received on or before 2:30 p.m. February 1, 1989, for 9,168 net rentable square feet, plus or minus 3%, of existing office space. A pre- bid meeting was scheduled for January 11, 1989. The advertisement also advise that the bid specifications could be obtained from the Orlando Regional Office of HRS, and that the State of Florida reserved the right to reject any and all bids. The material provisions of the bid specifications at issue in this proceeding are: The space be made available on September 1, 1989 or within 175 days after bid is finalized. The proposed space must be in an "existing building", which was: defined to mean "dry and capable of being physically measured to determine net rentable square footage at the time of bid submittal". The bidder provide 2 clear photographs of the exterior front of the proposed facility and 2 scaled (1/8 inch or 1/4 inch 1 foot preferred) floor plan showing present configurations with measurements that equate to the net rentable square footage (HRS Exh. 1, General Specifications Requirement No. 10(a)) Emphasis in original). Building(s) in not more than 2 locations provided the facilities are immediately adjacent to or within 100 yards of each other. Prior to the pre-bid conference, but after the initial publication of the bid invitation, representatives of NOTTUS contacted Ernie Wilson, the facilities services manager for District 7, HRS, to inquire regarding the propriety of submitting a bid for space in two buildings in which HRS presently had facilities, together with a facility that was greater than 100 yards from the existing facilities. At the time of the inquiry, NOTTUS was leasing facilities to HRS at its Lipscomb facility in Palm Bay, Florida. A portion of the square footage that NOTTUS inquired about leasing to HRS was the remaining square footage in two buildings that HRS partially occupied at that time. All of the premises submitted by NOTTUS under its bid package were located in the Woodlake PUD, which is all under single ownership. A representative from HRS advised the representative from NOTTUS that: the issue regarding the proximity of the locations would not be addressed as a bid specification, but rather, that would be a matter to be weighed by the evaluation committee in analyzing the bids. the bid proposal to be submitted would actually be for two locations as a portion of the space offered by NOTTUS was to be located in buildings in which HRS presently maintained facilities. The submittal of the bid package regarding the premises subject to occupancy by HRS, as ultimately submitted by NOTTUS, would definitely not disqualify the bid submittal. Mr. Wilson also received telephone calls from BOOZER and a third bidder making inquires regarding the bid package. The Pre-bid conference was held on January 11, 1989. No objections or questions regarding the bid specifications as to be utilization or definition of the terms "existing building" and "present configuration" were raised at that time. At no time prior to the submission of the bids were any objections or questions raised by BOOZER regarding the utilization of the term "existing building" or the term "present configuration" as those terms were defined within the bid specification. Each of the Petitioners in this action, the Intervenor, as well as two other parties, submitted bids to HRS within the time requirement set forth in the bid documents. The bids were opened at the time and place reflected in the aid documents and Invitation to Bid. Subsequent to the opening of the bids, John Stewart, who is Ernie Wilson's supervisor, and Ernie Wilson reviewed the bid packages submitted for Lease No. 590:2054 and made a determination as to which bids were responsive. As a result of that evaluation, a determination was made that all five bidders were responsive. These bidders were the Petitioner, Fred D. BOOZER, the Intervenor, Nottus, Inc. the Petitioner, Trust NB-1 Micah G. Savell and Professional Center V. Inc. These bid proposals were then submitted to the evaluation committee who viewed the property of each of the bidders on February 13, 1989. The bid documents of BOOZER contained an additional document, i.e., a site plan, which reflected that the premises subject to his bid proposal were an "existing building". The area submitted for the bid was shaded reflecting the entire square footage submitted for bid as being "in existence." The drawing further reflected the "existing building" as being the "proposed HRS building". The premises subject to the Petitioner's, BOOZER, bid were not in existence, as that term was defined in the bid specifications, in that approximately 2500 square feet had not yet been constructed. Two walls, a floor slab and a roof were not in existence. The only improvements located therein were palm trees, grass and a sidewalk. Petitioner stipulated that the area occupied by the palm trees, grass and sidewalk was in fact "not dry". The existing building at 2225 South Babcock Street that was dry at the time of the bid opening constituted approximately 6,900 square feet of premises subject to Petitioner's bid. At the time of the inspection, the Petitioner, BOOZER, was present. At no time did BOOZER indicate that the total facility bid was not in existence. The members of the evaluating committee who viewed the property for purposes of evaluating the bid were not aware of the fact that the entire premises subject to BOOZER's bid proposal was not in "Existence" and "dry". The floor plan showing the present configuration of BOOZER's facility reflected an open floor space for the area occupied by the palm trees, grass and sidewalk. The palm trees, grass and sidewalk were not reflected in the present configuration drawing. Both the floor plan and site plan were prepared by BOOZER's son with his approval. In evaluating the respective bid proposals, the evaluation committee rated the properties as follows: Fred D. BOOZER - 450 points Nottus, Inc.- 433 points Micah Savell - 384 points Trust NB-l - 360 points Professional Center V. Inc.- 357 points The location requirement found in Article D.3(b) of the bid package was taken into account. In evaluating the Nottus bid, including a zero rating from one of the evaluation committee members. As a result of the points awarded by the evaluation committee, a determination was made to award the bid to BOOZER, who was notified of this award on or about March 14, 1989 by letter dated March 14, 1989. On or about March 20, 1989, Petitioner, BOOZER, obtained a construction permit from the City of Melbourne to construct a fire wall and framing for additional shell building. This building permit was for the purpose of enclosing the area that was occupied by the palm trees, grass and sidewalk at the time of the bid proposal being submitted. Upon being awarded the bid, Petitioner, BOOZER then made a decision to commence construction to complete the premises subject to his bid proposal, and had expended $28,000 thereon through the hearing date. On or about March 29, 1989, HRS, through Ernie Wilson and Lynn Nobley, discovered the fact that approximately 2,500 square feet represented as being a part of the existing building, in fact was not existing pursuant to the bid specifications. At the time of this discovery, construction under the construction permit had not been completed. Mr. Wilson advised BOOZER at that time that he was concerned that BOOZER's bid was nonresponsive because the premises subject to the bid proposal were not in an "existing" building at the time of the bid submittal. The normal procedure for HRS in awarding a bid where the initial award is cancelled or thrown out is to award the bid to the second and next best lowest bidder. It is not the normal practice of the HRS evaluation committee to measure the applicable properties at time of evaluation to determine net rentable square footage. At the time of discovery of the foregoing status of BOOZER's building, Ernie Wilson, contacted a Nottus representative, Fred E Sutton, its President, to advise him of the possible nonresponsiveness of BOOZER's bid and requested information to determine whether Nottus, the second low bidder, still had facilities available pursuant to its bid documents and whether Nottus would agree to continue to continue to be bound by the terms thereof. Mr. Sutton advised Ernie Wilson that the facilities were still available and that Nottus would agree to abide by the terms of its bid proposal. Following the procedural steps necessary to advise the appropriate individuals within HRS of the possible nonresponsive bid by BOOZER, Ernie Wilson was advised by the Director of HRS General Services, King W. Davis, by letter dated April 2, 1989 to withdraw the award for the proposed lease 590:2054 from BOOZER because of approximately 2,500 feet of nonexisting space. He was also instructed to award same to Nottus as the second lowest bidder. On or about April 14, 1989, Ernie Wilson advised BOOZER of the Notice of Withdrawal of the award from BOOZER and award to Nottus, together with the reasons therefor, which was received by BOOZER on April 17, 1989. Petitioner, BOOZER, timely initiated these actions by filing his Notice of Intent to appeal the withdrawal of the award of bid to him and the award to Nottus, and by timely filing a formal written protest and request for formal hearing. Attachment "D" of the bid package required the submittal of a proposed plan to a division of the State Fire Marshal for review of any proposed construction or renovation to determine whether such construction or renovation complied with the uniform fire safety standards. Said plans were required to be prepared by licensed architects and engineers for certifications outlined in Attachment "D". These matters were all to be completed prior to the commencement of any revocation or alteration. Petitioner, BOOZER, commenced said improvements prior to said approval. In fact, BOOZER submitted no plans in compliance with these requirements prior to construction. Petitioner, BOOZER, is a licensed builder in the State of Florida, and has been for ten years. BOOZER further acknowledged that at the time of signing and submitting the bid proposal, he certified that he understood the terms of the bid specifications and agreed to be bound by them. TRUST NB-1 attempted to initiate an appeal of the award of the bid to Nottus by submitting a facsimile "notice of protest" to HRS predicated on the award of the bid to Nottus occurring greater than sixty (60) days following the bid opening date. TRUST NB-1 received notice of the award to Nottus on April 18, 1989 and attempted facsimile delivery on April 21, 1989. The facsimile "Written Notice of Protest" was not filed until April 25, 1989. The regular mail receipt of said Notice was received by HRS and filed on April 24, 1989. 38. The "formal written protest" was filed with HRS on May 1, 1989. 39. signature The facsimile Notice of Intent to Protest did not contain of a representative of TRUST NB-1. the original 40. Ernie Wilson is the custodian of records for bid protests for HRS, District 7, and is also the person designated in the bid documents as the contact person for the bid on Lease No. 590:2054. TRUST NB-1 was ranked number four in relation to the five bids submitted. Bidder Micah Savell, not a party to these proceedings, is the next low bidder after BOOZER and Nottus, Inc.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent enter a final order: (a) Finding the bid of Petitioner, BOOZER, to be unresponsive and that the cancellation of the award by Respondent was justified. Find the bid of Intervenor, NOTTUS to be unresponsive. Find that Petitioner, TRUST NB-1, lacks standing and its protest should be dismissed. Reject all bids. DONE AND ENTERED this 21st day of July, 1989, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of July, 1989. APPENDIX Proposed Findings of Fact by Petitioner, Fred O. Boozer: 1-5 Rejected. 6 and 7 Accepted as incorporated in the Recommended Order. Proposed Findings of Fact by Intervenor, Nottus, Inc. Accepted. Accepted as modified. 3-30. Accepted. 31. The first two sentences rejected as argument and not supported by the evidence. Last sentence in paragraph accepted. 32-40. Accepted. COPIES FURNISHED: Thomas Houck, Esquire 312 South Harbor City Boulevard Suite 1 Melbourne, Florida James A. Sawyer, Esquire District 7 Legal Counsel Department of Health and Rehabilitative Services 400 West Robinson Street Suite 911 Orlando, Florida Sam Power Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Gregory L. Coler Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John Miller General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
Findings Of Fact Nine bids were received for Contract E4571, Project/Job No. 99004-3516 ("E4571"). Petitioner's bid was timely received. Respondent opened bids on December 13, 1991. Respondent posted its intent to award E4571 to J & D Tropical Landscape Design on December 20, 1991. Section 1.2 of the Bid Specifications for E4571, as modified by the Special Provisions, states: A contractor's bid shall be in the form of a unit price for each unit expected to be accomplished. The Special Provisions to E4571 require each bidder to submit a single unit price for each pay item called for in the Bid Price Proposal. Item 4 in the Special "Provisions provides: It shall be the responsibility of the Contractor to submit to the Department A SINGLE unit price for each pay item called for in the Bid Price Proposal. The Contractor shall be responsible for his/her method of averaging. Failure to comply shall result in the Contractor's Bid Proposal being declared "Irregular" and such Bid Proposals will be rejected. (emphasis added) Petitioner's Bid Proposal was properly declared irregular and rejected by Respondent. Petitioner failed to comply with the requirements of Item 4 in the Special Provisions by failing to submit a single unit price for each pay item, by failing to correctly average a unit price, and by failing to state the unit price in words. The Unit Price Sheet on page 23 of the Bid Proposals contains the following table listing item numbers A582- 2 through A584-4. Petitioner listed item number A583 as follows: ITEM PLAN ITEM DESCRIPTION AND UNIT PRICE $ AMOUNTS NUMBER QUANTITIES UNIT PRICE (IN FIGURES) (Exten- (IN WORDS) sion Price) 3/ A583 4 200.000 TREES (8' TO 20, 85 20400 PLANT ' HEIGHT OR CLEAR TRUNK) @ DOLLARS CENTS The actual extension price 4/ for 200 trees at $85 per unit is $17,000 rather than the $20,400 stated by Petitioner in the table on page 23. The "Contract Total" stated by Petitioner in the bottom right corner of the table is $37,013.20. The "Contract Total" that should have been stated if Petitioner intended the extension price of item number A583-4 to be $17,000 would have been $33,613. The "Contract Total" listed by a bidder on the Unit Price Sheet is the unverified contract price. The actual contract price is determined by Respondent pursuant to the formula given in Section 1.3 of the Bid Specifications. Section 1.3 of the Bid Specifications foil E4571 states: The contract price is defined as the sum of the unit bid price times the planned work for each item as shown on the Unit Price Sheet. Petitioner would have been the lowest successful bidder irrespective of whether Respondent had replaced the extension price for item number A583-4 and the "Contract Total" stated by Petitioner with the actual extension price for item number A583-4 and the actual "Contract Total" . However, Respondent is precluded from doing so by Section 3-1 of the Standard Specifications For Road ,and Bridge Construction ("Standard Specifications"), published by the Florida Department of Transportation (1991) and by the Special Provisions for E4571. Respondent follows "Section 3-1 of the Standard Specifications for the purpose of evaluating bid proposals. Section 3-1 is used, in part, to determine the extension price for item numbers listed on the Unit Price Sheet. Section 3- 1 provides in relevant part: In the event of any discrepancy in the three entries for the price of any item, the unit price as shown in words shall govern unless the extension and the unit price shown in figures are in agreement with each other, In which case they shall govern over the unit price shown in words. Petitioner did not show the unit price in words for any item number on the Unit Price Sheet, including item number A583-4. There is a discrepancy in the three entries for item number A583-4 on the Unit Price Sheet. Petitioner failed to show the unit price for item number A583-4 in words, and the unit price and extension price are not in agreement. Under such circumstances, Respondent interprets Section 3-1 of the Standard Specifications as requiring that Petitioner's bid be declared irregular and rejected. Respondent's interpretation of Section 3-1 of the Standard Specifications is reasonable and is consistent with the mandate in Item 4 of the Special Provisions for E4571. See Finding 4, supra. Furthermore, in practice, the correct unit price of a pay item is necessary to process payment under the contract and the contractor must submit invoices based upon the pay items and unit prices listed in its bid. The bid specifications for E4571 provide that a bidder is responsible for his or her own averaging of a stated unit price, and that if a bidder fails to provide a single unit price for each pay item on the Unit Price Sheet the bid shall be declared "Irregular" and will be rejected. The requirement to provide a single unit price for each pay item was emphasized by Respondent at the mandatory pre-bid meeting. Petitioner's representative attended the mandatory pre-bid meeting. No challenges were made to the bid specifications by any bidder.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order dismissing the protest filed by Petitioner. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 20th day of February, 1992. DANIEL MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (964) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of February, 1992.
The Issue Whether the Department of Health and Rehabilitative Services (HRS) acted in an arbitrary and capricious manner in determining to award the bid for its district office to Koger Properties, Inc. (Koger) and whether the petitioner submitted the lowest and best bid under the terms of the bid specifications.
Findings Of Fact GENERAL BACKGROUND - STIPULATED FACTS Petitioners received a formal Invitation to Bid on Lease No. 590:1784 from HRS, District V. The purpose of the ITB was to obtain competitive proposals for the leasing of office space by HRS within a specifically defined area. Petitioners timely submitted their bid in response to the ITB. All timely received bids were first evaluated to determine technical responsiveness. Petitioners' bid was determined to be responsive to the technical requirements of the ITB. Responsive bids were then presented to a bid evaluation committee for comparison and formulation of a recommendation for award. In comparing the various responsive bids and formulating a recommendation for award, the members of the bid evaluation committee were required to visit each proposed facility and to apply the evaluation criteria as contained in the ITB package. By memorandum dated July 30, 1986, the bid evaluation committee recommended that the bid be awarded to Koger although petitioners submitted the lowest rental price. On or about August 5, 1986, petitioners received notice from HRS of its intent to award Lease No. 590:1784 to Koger. By letter dated August 6, 1986, petitioners notified HRS of their intent to protest the intended award of Lease No. 590:1784 to Koger. The Notice of Intent to Protest was timely filed pursuant to the provisions of Section 120.53(5), Florida Statutes, and Rule 10- 13.11, Florida Administrative Code. Thereafter, the petitioners timely filed their formal written protest. Petitioners are substantially affected by the decision of HRS to award the lease to Koger. THE BIDDING PROCESS The Department of Health and Rehabilitative Services issued an Invitation to Bid and Bid Submittal Form (ITB) seeking approximately 39,968 net rental square feet of office space in Pinellas County, Florida, to be used as the district administrative offices. The ITB set forth the method in which the bids would be evaluated as follows: EVALUATION OF BIDS Bids received are first evaluated to determine technical responsive- ness. This includes submittal on bid submittal form, inclusion of required information and data, bid signed and notarized, etc. Non responsive bids will be withdrawn from further consideration. Responsive bids are presented to a bid evaluation committee for com- parison and formulation of a recom- mendation for award. This is accomplished by a visit to each proposed facility and application of the evaluation criteria. The committees recommendation will be presented to the department's official having award authority for final evaluation and determin- ation of successful bidder. EVALUATION CRITERIA The successful bid will be that one determined to be the lowest and best. All bids will be evaluated based on the award factors enumerated in the bid submittal form. The ITB also provided that "the department agrees to enter into a lease agreement based on submission and acceptance of the bid in the best interests of the department and the state." In accordance with the ITB a pre-bid conference was held on April 29, 1986; however, neither petitioners nor any representative of petitioners attended the pre-bid conference. Further, petitioners made no oral or written inquiries concerning the ITB or the evaluation criteria to be utilized. Bids received from the following providers were determined to be responsive and presented to the bid evaluation committee for comparison and formulation of the recommendation for award: James P. & Margaret R. Gills (1100 Building) Koger Properties, Inc. (Koger) LTBCLH Partnership (Justice Building) Procacci Real Estate Management Co., Inc. (ICOT Building) Elizabethan Development, Inc. (Handy City Building). BID EVALUATION COMMITTEE The bid evaluation committee was composed of the following people who, along with their staffs, would occupy the leased property: Robert Withrow, Chairman of the Committee and District Administrative Services Director; Samuel Kinsey, Financial and Accounting Director for District V; Patricia Bell, Program Manager for Aging and Adult Services; Fredrick M. O'Brien, General Services, Manager for District V; and Pegi Hollingsworth, Personnel Officer. Each member of the evaluation committee received a bid package consisting of the bid specifications and the bids submitted. Each member also received a bid evaluation sheet which was used to rate each bidder. They received no other instructions with regard to the evaluation criteria. Although each specific evaluation criterion was weighted, i.e., given a comparative value, the committee members were not specifically instructed as to how points should be assigned for each category. The evaluation committee went to each of the proposed buildings for the purpose of making a comparative evaluation based on the evaluation criteria provided. However, the primary focus was on the Koger Building and the petitioners' 1100 Building because they had submitted the lowest rental rates of the five bidders considered. After the viewing process, the members of the committee, except Mr. Withrow, discussed the factors that should be considered in applying each of the evaluation criterion. Although the committee members had not formulated the evaluation criteria to be used, they were uniquely qualified to apply the evaluation criteria provided to the specific needs and requirements of the HRS offices that would occupy the building. Though the committee members were in agreement as to the various factors to be included in each of the criterion listed, they did not discuss the points that would be awarded to each facility. Each member independently assigned points to each facility based on his or her own evaluation of the facility's comparative value in each of the listed categories. Koger received the best evaluation from all five committee members with point totals of 98, 98, 98, 98 and 99 out of a possible 100 points. Petitioners' building was ranked last of the five buildings evaluated by four of the members, with point totals of 75, 77, 71 and 75, and fourth by Mr. Withrow with a total of 81 points. Based on the comparative evaluation of the buildings, the committee recommended that the bid be awarded to Koger. By letter dated July 30, 1986, the District V office received authorization from the HRS Director of General Services to award the bid to Koger as being in the best interest of the department and state. THE EVALUATION CRITERIA The ITB included the evaluation criteria list used by the committee to ascertain the relative value of each building. At the top of the page it is stated: The successful bid will be that one determined to be the lowest and best. All bids will be evaluated based on the award factors enumerated... The evaluation criteria are divided into three general areas: (1) Associated Fiscal Costs, (2) Location, and (3) Facility. Each general area includes subcategories, with each subcategory being given a total maximum value. Each of the criteria disputed by petitioners is discussed below. 1(a) Rental rates for basic term of lease. (Weighting: 45) All of the bids received by HRS were within the rental limits established by the Department of General Services and also much lower than expected. Even the highest bid was lower than anticipated, and Koger's and petitioners' bids were considered especially desirable. The bids received, listed at present value for the ton year basic lease period, are as follows: BIDDER TOTAL COST AMOUNT MORE THAN LOW BID 1100 BUILDING $1,881,690.1 KOGER 1,993,131.4 $111,441.3 JUSTICE 2,473,559.8 591,869.7 ICOT 2,655,306.1 773,616.0 HANDY CITY 3,223,202.0 1,341,511.9 Rental rates for the basic term of the lease were given a weighted value of 45. All of the committee members gave petitioners 45 points, as the low bidder, and all gave Koger 44 points as the next low bidder. However, four of the members simply agreed that the low bid would receive the maximum amount of points with each subsequent low bidder receiving one less point than the one before it, which resulted in the high bidder receiving 41 points even though its bid was 1.7 times greater than the low bid. Only Mr. Withrow made an attempt to prorate the points based on the differences in the amount bid, thus resulting in the high bidder receiving only 20 points. However, even Mr. Withrow awarded Koger 44 points based on the minimal difference between the Koger bid and the petitioners' bid. Both Mr. Withrow and Mr. Kinsey explained the award of 44 points to Koger by comparing the difference in the amounts bid to the HRS District V budget or the budgets of the entities using the facilities. However, the purpose of the evaluation was to compare each facility to the other facilities. Thus, the award of points for rental rates should have been based on a comparison of the rates offered. Although it was reasonable to assign the maximum number of points to petitioners, as the low bidders, the amount of points assigned to the remaining bidders should have been based on a comparison of the amount of each bid to the low bid. This would have made a significant difference in the points awarded to Justice, ICOT, and Handy City; however, even using a strict mathematical computation would not significantly affect the points awarded Koger due to the minimal difference in Koger's bid and petitioners' bid. Koger would receive no less than 42 points, only 2 points less than awarded, regardless of the method of mathematical computation used. 1/ 2(a) Proximity of offered space in central or preferred area of mad boundaries (Weighting: 5) All the members of the committee agreed that Koger is in the most preferred area because its location is more accessible to the employees and the persons who visit the office than any of the other buildings. Koger is in northeast St. Petersburg, minutes from the interstate. The 1100 Building is located in a more congested area in downtown Clearwater on the extreme northern boundary of the designated area. In making a comparison Of the building locations, all of which were located within the map boundary, the committee jusifiably determined that the building that was the most strategically located, in terms of accessibility, would be considered to be in the most preferred area. Thus, Koger was awarded five points by all committee members. The 1100 Building received 2, 0, 1, 3 and 1 points. Although all committee members awarded Koger the highest points, only one committee member resided closer to the Koger Building than the other buildings. Mr. Withrow, who lives closer to the 1100 Building than Koger, gave the 1100 Building only 1 point because it was more inaccessible to the district clients and employees. Further, the District Administrator, who approved the lease to Koger, resides closer to the 1100 Building. 2(b) Frequency and availability of satisfactory public transportation within proximity of the offered space (Weighting: 5) Both Koger and the 1100 Building received the maximum of five points in this category except from Mr. Withrow who gave the 1100 Building four points. The committee members felt that the bus transportation as about the same for each building. Although the 1100 Building had more buses passing the facility due to its location in downtown Clearwater, the committee considered the destination of the buses and concluded that a person would wait the same length of time for a bus to take him to his destination from either the Koger Building or the 1100 Building. Mr. Withrow differed on the points awarded because he considered the Koger location to be better due to its proximity to the airport. The district office has a large number of people that visit from Tallahassee and other districts in the state. 2(c) The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on the efficient and economical conduct of departmental operations planned for the requested space. (Weighting: 3) Koger received the maximum of 3 points from every committee member in this category; the 1100 Building received 0 points from every member. Although this category is listed within the general area of "Location", the committee members followed the category requirement and considered all environmental factors, including the physical characteristics of the building. In the 1100 Building, committee members noted problems with the air conditioning system and the elevators. The building was not maintained well, and the bathrooms were small and poorly ventilated. The HRS parking at the 1100 Building was not conveniently located. To get to the parking lot from the building an employee would have to cross a parking lot adjacent to the building, cross an intersection and then walk up to a block to get to his or her car. Many of the office employees work late and would be walking to their cars after dark, and there was concern expressed for employee safety considering the parking arrangement offered by petitioners. Koger had none of the problems observed at the 1100 Building. Further, Koger was better suited for the handicapped because there was no need to use a ramp as there was at the 1100 Building. 3(a) Conformance of space offered to the specific requirements contained in the Invitation to Bid. (Weighing: 10) 3(b) Susceptibility of the design of the space offered to efficient layout and good utilization. (Weighting: 10) 3(c) Provisions of the aggregate square footage in a single building. Proposals will be considered, but fewer points given, which offer the aggregate square footage in not more than two locations...within 100 yards of each other. (Weighting: 10) Koger's bid is for a two-story building containing approximately 39,000 square feet. The 1100 Building is a 15-story building. It would provide approximately 39,000 square feet on the second, fourth, fifth, part of the eighth, part of the ninth, and twelfth floors. The space allocation in the 1100 Building, spread over 6 floors, would provide a major problem in efficiently locating the staff. Certain offices could not be placed on certain floors because of space restrictions, and related offices could not be placed in close proximity to each other. Offices that needed to be on the same floor could not be located on the same floor. Because the space offered by petitioners is spread over 12 floors, accessibility to related offices would be much more difficult. Further, the limited space per floor makes it more difficult for HRS to properly utilize the space provided. None of the testimony provided by the committee witnesses related the "conformance of the space offered to the specific requirements contained in the Invitation to Bid" (e.s.) The ITB lists the offices and rooms required, giving sizes for each. Other than the total square footage, which petitioners met, there were no other specific requirements contained in the ITB. None of the committee members compared the conformance of the space offered to the specific room and office requirements. Indeed, the testimony of the committee members indicate that accessibility of the space was considered under criteria 3(a) rather than the conformance of the space to the ITB. Since the space offered by petitioners apparently complied with the requirements of the ITB, petitioners should have received 10 points for that category. The points awarded under 3(b) and 3(c), however, were proper. The space offered by the 1100 Building is not susceptible to an efficient layout or good utilization of the space offered. Further, the committee legitimately differentiated between the single buildings offered by each bidder, under 3(c), by considering where the space was located within the building. Obviously, factor 3(c) reflects a concern that the space offered not be too separated. It clearly provides that proposals for space in two separate buildings will get fewer points than single building proposals, and there is no indication that all single building proposals should receive the same maximum points. This factor clearly relates to the proximity of the spaces offered to one another, with contiguous space getting the most points. 3(d) Offers providing street-level space (Weighting: 2) Approximately half of the space offered by Koger is street-level space. Koger received two points. The 1100 Building provides no street-level space; it received no points in this category. Petitioners do not contend that they should have gotten any points, but assert Koger should only have gotten one point because not all its space was street-level space. THE COMPARATIVE EVALUATION The evaluation committee members were very conscientious in comparing the relative values of the buildings offered based on the criteria provided and their observations. Their evaluations were not made arbitrarily, but based upon the factors set forth in the evaluation criteria. Although errors were made in calculating the values awarded for categories 1(a) and 3(a), these errors were not due to arbitrary action by the committee members. Further, should the appropriate points under 3(a) be added to petitioners evaluations and three points be subtracted from Koger's evaluations (two points for 1(a) and one point for 3(d)), petitioners evaluations would be 79, 80, 76, 80 and 84, and Koger's would be 95, 95, 95, 95 and 96. The strategic plan for HRS, 1986-1991, Goal 12, is to enhance employee morale and job satisfaction in several ways, one of which is to replace or upgrade 90 percent of substandard physical work environments by December 31, 1990. The testimony and evaluations show, and the committee members found, that the Koger Center would provide a better work environment than the petitioners' 1100 Building. Based on the criteria set forth in the ITB, the Koger bid is the "lowest and best" bid.
The Issue Whether Respondent acted contrary to the agency's governing statutes, rules, or policies or the bid specifications in its proposed decision to award Contract No. T7380 to Astaldi Construction Corporation ("Astaldi").
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, and on the entire record of the proceeding, the following Findings of Fact are made: The Department is a state agency authorized by section 337.11 to contract for the construction and maintenance of roads within the State Highway System, the State Park Road System, and roads placed under its supervision by law. The Department is specifically authorized to award contracts under section 337.11(4) to “the lowest responsible bidder.” On April 15, 2016, the Department advertised a bid solicitation for Contract T7380, seeking contractors for the widening of a 3.8 mile portion of U.S. Highway 301 in Hillsborough County from two lanes to six lanes between State Road 674 and County Road 672 and over Big Bull Frog Creek. The advertisement provided a specification package for the project and the “Standard Specifications for Road and Bridge Construction” (“Standard Specifications”) used on Department roadway projects. The work included seven components: bridge structures (Section 0001), roadway (Section 0002), signage (Section 0003), lighting (Section 0004), signalization (Section 0005), utilities (Section 0006), and intelligent transportation systems (Section 0007). The advertisement identified 666 individual items of work to be performed and quantity units for each item. The project was advertised as a low-bid contract with a budget estimate of $51,702,729. The Department’s bid proposal form contains five columns with the following headings: Line Number; Item Number and Item Description; Approximate Quantities and Units; Unit Price; and Bid Amount. The bid proposal form contains line items for the seven components of the project. The utilities component contains 42 line items, each with an Item Number and Item Description. For example, Line Number 1410 corresponds with the following Item Number and Item Description: “1050 11225 Utility Pipe, F&I, PVC, Water/Sewer, 20–40.9 [inches].” Each bidder inserts a Unit Price for the line item in the corresponding “Unit Price” column. The “Bid Amount” column for each line item is an amount generated by multiplying a bidder’s Unit Price by the Quantities (determined by the Department) for each Line Number. The Bid Amount for each Line Number is then added together to generate the “Total Bid Amount” representing the bid for the entire project. Astaldi, Prince, Hubbard, and other potential bidders attended the mandatory pre-bid meeting. Prequalified contractors were given proposal documents that allowed them to enter bids through Bid Express, the electronic bidding system used by the Department. Plan revisions were issued by addenda dated May 10, 2016, and June 7, 2016. A Question and Answer Report was published and updated as inquiries were addressed. Bids were opened on the letting date of June 15, 2016. Bids for Contract T7380 were received from Astaldi, Prince, Hubbard, the DeMoya Group (“DeMoya”), Ajax Paving Industries of Florida, LLC (“Ajax”), and Cone & Graham, Inc. (“Cone & Graham”). The bids were reviewed by the Department’s contracts administration office to ensure they were timely, included a Unit Price for each line item, and contained the completed certifications required by the specifications. Bidders were checked against the Department’s list of prequalified bidders to confirm they possessed a certification of qualification in the particular work classes identified by the bid solicitation. Each bidder’s total current work under contract with the Department was examined to ensure that award of Contract T7380 would not place the bidder over its Department-designated financial capacity limit. Astaldi submitted the lowest bid, a total amount of $48,960,013. Prince submitted the next lowest bid, a total amount of $57,792,043. Hubbard’s total bid was the third lowest at $58,572,352.66. The remaining bidders came in as follows: DeMoya, $63,511,686.16; Ajax, $68,617,978.10; and Cone & Graham, $70,383,697.74. All bidders were prequalified in the appropriate work classes and had sufficient financial capacity, in accordance with section 337.14 and Florida Administrative Code Chapter 14-22. The Department’s construction procurement procedure, from authorization to advertisement through contract execution, is outlined in the Department’s “Road and Bridge Contract Procurement” document (“Contract Procurement Procedure”). The scope statement of the Contract Procurement Procedure provides: “This procedure applies to all Contracts Administration Offices responsible for advertising, letting, awarding, and executing low bid, design-bid-build, construction, and maintenance contracts.” Limited exceptions to the procedure may be made if approved by the assistant secretary for Engineering and Operations. If federal funds are included, the Federal Highway Administration division administrator, or designee, must also approve any exceptions from the procedure. The stated objectives of the Contract Procurement Procedure are: “to standardize and clarify procedures for administering low-bid, design-bid-build, construction, and maintenance contracts” and “to provide program flexibility and more rapid response time in meeting public needs.” The Department’s process for review of bids is set forth in the “Preparation of the Authorization/Official Construction Cost Estimate and Contract Bid Review Package” (“Bid Review Procedure”). The scope statement of the Bid Review Procedure states: This procedure describes the responsibilities and activities of the District and Central Estimates Offices in preparing the authorization and official construction cost estimates and bid review packages from proposal development through the bid review process. Individuals affected by this procedure include Central and District personnel involved with estimates, specifications, design, construction, contracts administration, work program, production management, federal aid, and the District Directors of Transportation Development. The Bid Review Procedure contains a definitions section that defines several terms employed by the Department to determine whether a bid or a unit item within a bid is “unbalanced.” Those terms and their definitions are as follows: Materially Unbalanced: A bid that generates reasonable doubt that award to that bidder would result in the lowest ultimate cost or, a switch in low bidder due to a quantity error. Mathematically Unbalanced: A unit price or lump sum bid that does not reflect a reasonable cost for the respective pay item, as determined by the department’s mathematically unbalanced bid algorithm. Official Estimate: Department’s official construction cost estimate used for evaluating bids received on a proposal. Significantly Unbalanced: A mathematically unbalanced bid that is 75% lower than the statistical average. Statistical Average: For a given pay item, the sum of all bids for that item plus the Department’s Official Estimate which are then divided by the total number of bids plus one. This average does not include statistical outliers as determined by the department’s unit price algorithm. For every road and construction project procurement, the Department prepares an “official estimate,” which is not necessarily the same number as the “budget estimate” found in the public bid solicitation. The Department keeps the official estimate confidential pursuant to section 337.168(1), which provides: A document or electronic file revealing the official cost estimate of the department of a project is confidential and exempt from the provisions of s. 119.07(1) until the contract for the project has been executed or until the project is no longer under active consideration. In accordance with the Bid Review Procedure, the six bids for Contract T7380 were uploaded into a Department computer system along with the Department’s official estimate. A confidential algorithm identified outlier bids that were significantly outside the average (such as penny bids) and removed them to create a “statistical average” for each pay item. Astaldi’s unit pricing was then compared to the statistical average for each item. The computer program then created an “Unbalanced Item Report,” flagging Astaldi’s “mathematically unbalanced” items, i.e., those that were above or below a confidential tolerance value from the statistical average. The unbalanced item report was then reviewed by the district design engineer for possible quantity errors. No quantity errors were found.1/ The Department then used the Unbalanced Item Report and its computer software to cull the work items down to those for which Astaldi’s unit price was 75 percent more than or below the statistical average. The Department sent Astaldi a form titled “Notice to Contractor,” which provided as follows: The Florida Department of Transportation (FDOT) has reviewed your proposal and discovered that there are bid unit prices that are mathematically unbalanced. The purpose of this notice is to inform you of the unbalanced nature of your proposal. You may not modify or amend your proposal. The explanation of the bid unit prices in your proposal set forth below was provided by ASTALDI CONSTRUCTION CORPORATION on ( ) INSERT DATE. FDOT does not guarantee advanced approval of: Alternate Traffic Control Plans (TCP), if permitted by the contract documents; Alternative means and methods of construction; Cost savings initiatives (CSI), if permitted by the contract documents. You must comply with all contractual requirements for submittals of alternative TCP, means and methods of construction, and CSI, and FDOT reserves the right to review such submittals on their merits. As provided in section 5-4 of the Standard Specifications for Road and Bridge Construction you cannot take advantage of any apparent error or omission in the plans or specifications, but will immediately notify the Engineer of such discovery. Please acknowledge receipt of this notice and confirmation of the unit bid price for the item(s) listed below by signing and returning this document. Section 5.4 of the Bid Review Procedure describes the Notice to Contractor and states: “Contracts are not considered for award until this form has been signed and successfully returned to the Department per the instruction on the form.” State estimating engineer Greg Davis testified that the stated procedure was no longer accurate and “need[s] to be corrected” for the following reason: Since the procedure was approved back in 2011, we’ve had some subsequent conversations about whether to just automatically not consider the award for those that are not signed. And since then we have decided to go ahead and just consider the contract, but we are presenting a notice, of course, unsigned and then let the technical review and contract awards committee determine. Astaldi signed and returned the Notice to Contractor and noted below each of the ten listed items: “Astaldi Construction confirms the unit price.” Mr. Davis explained that the purpose of the Notice to Contractor form is to notify the contractor that items have been identified as extremely low and to ask the contractor to confirm its understanding that in accepting the bid, the Department will not necessarily approve design changes, methods of construction, or maintenance of traffic changes. Section 6.6 of the Contract Procurement Procedure sets forth the circumstances under which an apparent low bid must be considered by the Department’s Technical Review Committee (“TRC”) and then by the Contract Awards Committee (“CAC”). Those circumstances include: single bid contracts; re-let contracts; “significantly mathematical unbalanced” bids; bids that are more than 25 percent below the Department’s estimate; 10 percent above the Department’s estimate (or 15 percent above if the estimate is under $500,000); materially unbalanced bids, irregular bids (not prepared in accordance with the Standard Specifications); other bid irregularities2/; or “[a]ny other reason deemed necessary by the chairperson.”3/ Bids that are not required to go before the TRC and CAC are referred to as “automatic qualifiers.” Because it was mathematically unbalanced, the Astaldi bid was submitted to the TRC for review at its June 28, 2016, meeting. The TRC is chaired by the Department’s contracts administration manager, Alan Autry, and is guided by a document entitled “Technical Review Committees” (“TRC Procedure”). The TRC Procedure sets forth the responsibilities of the TRC in reviewing bid analyses and making recommendations to the CAC to award or reject bids. The TRC voted to recommend awarding Contract T7380 to Astaldi. The TRC’s recommendation and supporting paperwork was referred to the CAC for its meeting on June 29, 2016. The duties of the CAC are described in a document entitled “Contracts Award Committees” (“CAC Procedure”). Pursuant to the CAC Procedure, the CAC meets approximately 14 days after a letting to assess the recommendations made by the TRC and determines by majority vote an official decision to award or reject bids. Minutes for the June 29, 2016, CAC meeting reflect 21 items before the committee including: two single bid contracts; four bids that were 10 percent or more above the official estimate; one bid that was 15 percent or more above the official estimate on a project under $500,000; three bids that were more than 25 percent below the official estimate; and 11 bids with significantly unbalanced items, including Contract T7380 with an intended awardee of Astaldi. The CAC voted to award Contract T7380 based on the low bid submitted by Astaldi. A Notice of Intent to award the contract to Astaldi was posted on June 29, 2016. As noted at Finding of Fact 2, supra, Contract T7380 consisted of seven components: structures, roadway, signage, lighting, signalization, utilities, and intelligent transportation system. The Department does not compare bids by component, but looks at the total bid amount to find the lowest bidder. The Department also reviews the bids for discrepancies in individual unit items using the process described above. Astaldi’s bid of $48,960,013 was approximately $8.8 million below Prince’s bid of $57,792,043, $9.6 million less than Hubbard’s bid of $58,572,352, and $2.7 million below the Department’s public proposal budget estimate of $51,702,729. As part of its challenge to the intended award, Prince performed a breakdown of bids by individual components and discovered that nearly all of the differences between its bid and Astaldi’s could be attributed to the utilities component. Astaldi’s bid for the utilities component was $7,811,720, which was roughly $8.5 million below Prince’s utilities bid of $16,305,903 and $5.8 million below Hubbard’s utilities bid of $13,603,846.4/ The utilities component was included pursuant to an agreement between the Department and Hillsborough County, the owner of the water and sewer lines, relating to the improvement of water and sewer lines along the roadway limits of the project. The utility work consists of installing a new water- line and force main sewer. The existing water main and the existing force main conflict with the proposed location of the new storm drainage system. The new water main and force main must be installed, tested, and approved before being put into active service. To prevent water utility outages to customers, the new system must be installed and approved before the existing waterline and existing force main can be cut off and removed. Utility work is therefore the first task to be performed on Contract T7380. Once the utility component is completed, the contractor will furnish and install the stormwater system, the roadway, the bridgework, and all other components. Article 3-1 of the Standard Specifications5/ reserves to the Department the right to delete the utility relocation work from the contract and allow the utility owner to relocate the utilities. Utilities are the only portion of a Department contract subject to deletion because the funding is provided by the utility owner, which usually has allocated a certain dollar figure to contribute towards the contract prior to the bidding. If the bid for utilities comes in over the utility owner’s budget, the owner can opt out of the contract and self-perform. In this case, Hillsborough County had contracted with the Department to contribute $8.9 million for utility relocation work. The Department did not exercise the option to delete the utilities portion of the contract. Jack Calandros, Prince’s chief executive, testified that Prince uses a computer program called HeavyBid, created and supported by a company called HCSS, to build the cost components of its bids. Every witness with industry knowledge agreed that HeavyBid is the standard program for compiling bids in the construction field. Mr. Calandros testified that cost components include material quotes provided by third-party vendors and quotes from potential subcontractors. Labor and equipment costs are ascertained by using historical rates and actual cost estimates that are tracked by the HeavyBid software. Prince maintains its own database of costs derived from 20 years’ experience. Mr. Calandros stated that Prince’s internal labor and equipment rates are checked and adjusted at least once a year to ensure they are current and accurate based on existing equipment and personnel. Prince received three vendor quotes for the materials to perform the utility work on Contract T7380. In compiling its bid, Prince ultimately relied on a final quote from Ferguson Waterworks (“Ferguson”) of $8,849,850. Based on this materials quote and Prince’s overall utilities bid of $16,305,903, Mr. Calandros opined that it would not be possible for Astaldi to perform the utilities component for its bid amount of $7.8 million. Prince’s estimating expert, John Armeni, reviewed Astaldi’s bid file, read the deposition testimony of Astaldi’s chief estimator, Ed Thornton, and spoke to Mr. Thornton by telephone. Mr. Armeni also reviewed Prince’s bid and the bid tabulation of all bidders’ utilities component line items. Based on his review and his extensive experience in the industry, Mr. Armeni concluded that Astaldi’s bid does not include all costs for labor, material, and equipment necessary to construct the utilities portion of this project. Mr. Armeni reviewed the materials quote from Ferguson that Prince used in its bid. He noted that Astaldi’s bid file contained an identical quote from Ferguson of $8.8 million for materials, including some non-utilities materials. Mr. Armeni noted that the Ferguson quote for utilities materials alone was approximately $8 million, an amount exceeding Astaldi’s entire bid for the utilities portion of the project. Mr. Armeni also noted that Astaldi’s overall bid was 18 percent below that of the second lowest bidder, Prince. He testified that 18 percent is an extraordinary spread on a bid where the Department is providing the quantities and all bidders are working off the same drawings and specifications. Mr. Armeni believed that the contracting authority “should start looking at it” when the difference between the lowest and second lowest bidder is more than 10 percent. In his deposition, Mr. Thornton testified he was not aware of how Astaldi arrived at its bid prices for the utility section of the project. Mr. Thornton indicated multiple times that he was not Astaldi’s most knowledgeable person regarding the bid submitted by Astaldi on Contract T7380 project. He testified that Astaldi intended to subcontract the utilities work and acknowledged that the company received a subcontractor quote of $14.9 million after the bids were submitted. Mr. Thornton did not know if Astaldi had solicited the quote. He said it is not unusual for a company to receive subcontractor bids after it has been named the low bidder on a project. Mr. Thornton conceded that Astaldi’s bid did not include all the costs necessary to construct the utilities portion of Contract T7380. At his deposition, he did not have before him the materials needed to determine which items of cost Astaldi had omitted. Mr. Thornton testified that Astaldi was not missing any information it needed at the time of bid submission and understood that its price was to include all labor, materials, and subcontracting costs to perform the contract. After the proposed bid award, Astaldi used HeavyBid to produce a report indicating that the company now estimates its cost of performing the contract at $53,708,129.03, or roughly $4.75 million more than its winning bid. Mr. Thornton testified that Astaldi nonetheless stood ready to execute the contract and perform the work at its bid price. Central to the dispute in this case is Standard Specifications Section 9, “Measurement and Payment,” article 9-2 of which is titled “Scope of Payments.” In particular, subarticle 9-2.1 provides: 9-2.1 Items Included in Payment: Accept the compensation as provided in the Contract as full payment for furnishing all materials and for performing all work contemplated and embraced under the Contract; also for all loss or damage arising out of the nature of the work or from the action of the elements, or from any unforeseen difficulties or obstructions which may arise or be encountered in the prosecution of the work until its final acceptance; also for all other costs incurred under the provisions of Division I. For any item of work contained in the proposal, except as might be specifically provided otherwise in the payment clause for the item, include in the Contract unit price (or lump sum price) for the pay item or items the cost of all labor, equipment, materials, tools and incidentals required for the complete item of work, including all requirements of the Section specifying such item of work, except as specially excluded from such payments. Prince contends that the second paragraph of subarticle 9-2.1 renders Astaldi’s bid nonresponsive because Astaldi admittedly failed to include “the cost of all labor, equipment, materials, tools and incidentals” in its bid. Prince points out that the “Technical Special Provisions” governing the utilities portion of the project reinforce the requirement that each bidder include all costs for the work. Technical Special Provisions Section 1-7.1 provides that “[p]ipe installation cost shall include all necessary work, equipment, and labor needed for installing the pipe, such as, coordination with existing utilities and support during construction and support of existing power poles during construction.” Technical Special Provisions Section 1-8.1 goes on to say that “[n]o separate payment will be made for the following items for work under this Technical Special Provision and the cost of such work shall be included in the applicable contract pay items of work,” followed by a comprehensive list of 30 items. Prince concludes that the requirement that each bidder include all costs, including costs of all necessary labor, equipment, and materials, in the Unit Price for each work item is “manifest” in the bid specifications and requires rejection of any bid that does not include all costs. Mr. Armeni opined that if one bidder excludes a portion of its costs, the other bidders are placed at a competitive disadvantage. Alan Autry, the Department’s central contracts administration manager, testified that five other projects were let as part of the bid package that included Contract T7380. He stated that it is typical for the Department to list multiple projects on one day. Mr. Autry’s office usually performs one bid letting per month, with the holiday months of November and December rolled together in a single letting. Mr. Autry stated that his office lets between 200 and 300 projects per year, not counting contracts that are let at the district level. Twenty other contracts were before the CAC at the June 29, 2016, meeting at which the Astaldi award in this case was approved. As noted at Finding of Fact 2, supra, Contract T7380 included 666 line items. Six companies submitted bids, meaning there were a total of 3,996 line items in this single contract. Assuming that the 200 to 300 other projects let by the Department’s Tallahassee office contain similar numbers, there are more than one million line items bid in any given year. If Prince’s reading of the bid specifications is correct, the Department is required to examine each of these line items and somehow make a determination whether the item includes all of the bidder’s costs. This problem of determining bidder cost is complicated by the presence of “companion” or “sister” items in bids, i.e., two items that must be considered in tandem to arrive at something like the actual cost of the work. Prince provided an example of such companion items in its analysis of the bids in this project. Two bid items included in the structures section of the bid proposal form were concrete culverts and reinforcing steel. The contractor may cast the culverts in place at the worksite or purchase them precast. If the concrete culvert is cast in place at the worksite, then reinforcing steel must be used to strengthen the culvert. If the concrete culvert is precast by a materials supplier, then the reinforcing steel has already been incorporated into the culvert at the time of installation. Mr. Calandros explained that when a contractor uses precast culverts, there is no need to list a separate additional cost for reinforcing steel; all costs are captured in the line item for concrete culverts. In this bid, Prince used precast culverts and therefore bid a penny per unit for reinforcing steel.6/ Bidders who cast the culverts in place showed a much higher cost for reinforcing steel but a lower cost for the concrete culverts. When the “companion items” were considered in tandem, the total cost for each vendor was fairly consistent. Prince’s explanation for companion items was coherent but did not explain how the Department is supposed to know which items are companion items as it undertakes the line-by-line cost examination of each bid in accordance with Prince’s reading of the bid specifications. Prince also failed to provide an explanation as to how the Department is to determine a bidder’s costs for any one line item or, for that matter, for its overall bid on a project. Bidders consider their cost information and the processes by which they build bids to be confidential proprietary information. In the instant case, Prince disclosed its own information (aside from materials costs) only under seal during litigation. In its ordinary course of business, the Department does not have access to this information. In fact, as noted at Finding of Fact 23, supra, the Department does not compare bids by component. It looks only at the total bid amount in determining the lowest bidder. Standard Specifications Article 3-8 reserves to the Department the right to perform an audit of the contractor’s records pertaining to the project upon execution of the contract. No authorization is provided to audit records of bidders prior to contracting. Standard Specifications Subarticle 2-5.1 allows bidders to indicate “free” or “$.00” for items that will be supplied at no cost to the Department. Though the Department’s practice, according to Mr. Autry, is to include zero bid items on the Notice to Contractor for confirmation of the price, subarticle 2-5.1 requires no Department investigation as to whether the bidder’s cost for a zero bid is actually zero. Bidders often bid a penny on items, as Prince did on reinforcing steel in this case. Standard Specifications Article 3-5 requires all contracts to be secured by a surety bond such that, in the event of a default by the contractor, the surety company will indemnify the Department on all claims and performance issues. Standard Specifications Section 4 provides that the scope of work is to be determined within the contract, including the furnishing of all labor, materials, equipment, tools, transportation, and supplies required to complete the work. The Department is authorized to make changes to the scope of work and make equitable adjustments of payments. If necessary, the Department may enter into supplemental agreements for additional or unforeseen work. Prince cautions that these change provisions could become relevant because Astaldi’s bid contains no information explaining how Astaldi will cover the $4.75 million difference between its bid price and its actual cost to perform the contract. Prince accurately states that nothing in Astaldi’s bid demonstrates that it has cash reserves to cover the loss and still complete the entire scope of the work.7/ Prince contends that this lack of demonstrable reserves renders Astaldi nonresponsible as to this project. Prince argues that it is error for the Department to rely on Astaldi’s certificate of qualification as proof of the company’s responsibility. The certificate of qualification process considers a contractor’s financial status at the time it submits its financial statements and other information regarding company resources. Prince contends that the Department’s assessment of the contractor’s financial statements and issuance of a certificate of qualification is insufficient to determine the contractor’s responsibility on a given bid. Prince argues that the Department is required by its governing statutes and the Standard Specifications to award a particular contract to the particular bidder that is the lowest, responsive, and responsible bidder, and that “responsible” for a given project is not synonymous with “prequalified.” Prince hypothesizes that under the Department’s practice, a bidder could possess a certificate of qualification issued in January, be indicted in another state for fraud and bribery in February, submit the lowest bid for a Department project in March, and be awarded the contract. By relying solely on the bidder’s certificate of qualification to determine responsibility, the Department could award a contract to a nonresponsible bidder. Section 337.14 provides that any person desiring to bid on any construction contract in excess of $250,000 must first be certified by the Department. Mr. Autry explained that the Department prequalifies contractors to submit bids on certain types of contract, such as major bridges and structures. Contractors applying for certification are required to submit their latest annual financial statements. The Department is charged with reviewing applications to determine “whether the applicant is competent, is responsible, and possesses the necessary financial resources to perform the desired work.” § 337.14(3), Fla. Stat. The Department assigns the contractor work classes and a total capacity after evaluating its experience and financials. The Department’s certificate is good for 18 months, though the contractor’s capacity is reviewed annually. At the time of a particular bid, the Department verifies the contractor’s available capacity, which is simply its total assigned capacity minus current work the contractor is performing for the Department. Mr. Autry testified that the Department does not go back and look at a bidder’s financials to determine whether it can sustain a loss on a given project. The Department does not repeat its capacity analysis during the year, regardless of how many projects the company bids on. The Department’s analysis is limited to whether the company’s current capacity is sufficient for the project on which it is bidding.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Transportation enter a final order dismissing Prince Contracting, LLC’s, second amended formal written protest and awarding Contract T7380 to Astaldi Construction Corporation. DONE AND ENTERED this 22nd day of December, 2016, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of December, 2016.
The Issue At issue in this proceeding is whether the decision of the respondent, Department of Corrections (Department), to award the subject bid to intervenor, Doctors and Physicians Laboratories, Inc. (Doctors), comported with the essential requirements of law.
Findings Of Fact Background On October 16, 1991, the Department of Corrections (Department) issued invitation to bid number 91-CO-5369 (hereinafter "the ITB"), which sought to secure appropriate services to perform drug tests on certain applicants for employment and existing employees of the Department. The deadline for submitting bids was established as 11:00 a.m., November 7, 1991. At the time of the deadline, the Department had received four bids, including those of petitioner, Toxicology Testing Service, Inc., and intervenor, Doctors and Physicians Laboratories, Inc. (Doctors). Petitioner's bid was $372,000, and Doctors' bid was $315,491.60. Based on its evaluation, the Department ranked Doctors first and petitioner second, with composite scores of 91.67 and 90.38, respectively, and proposed to award the contract to Doctors. Petitioner filed a timely formal written protest to contest the Department's decision, and charged that the Department materially departed from the evaluation criteria contained in the ITB. The Invitation to Bid Pertinent to this case, section 4.7 of the ITB established the evaluation criteria to be used in determining the acceptability of the bids as follows: 4.7 Evaluation Criteria Criteria Point Value 1. References 5 2. Firm Profile 5 3. Firms Qualifications 15 Understanding of Scope of Services 25 Bid Price 50 100 And, section 4.7.5 of the ITB established the following methodology to be utilized in awarding points for the bid price criteria: The award for bid price shall be determined as follows: The Bidder who submits the lowest bid price will be awarded 50 points. All others bidders will be awarded points based on the following formula: Bid Price Points = 50 X [1-A/B] where: A = the difference between the percentage of the bid being evaluated and the low bid(s). B = the low bid. The lowest bid price will be computed by multiplying the unit prices for Items 1, 2 and 3 for all three years by the estimated quantity. The estimated quantity is for bidding purposes only and is not a guarantee. The total annual cost for Items 1 and 2 for all three years will be added to determine the Total Cost for all three years. The vendor with the lowest Total Cost will be awarded the 50 points. Negative points will not be awarded. Pursuant to the provisions of section 5.13 of the ITB, the contract was to be awarded to the bidder that received the highest overall point total under the criteria established by section 4.7 of the ITB. The Department's evaluation and the protest Based on its evaluation of the bids, the Department's evaluation committee awarded petitioner 49.34 points for its technical proposal (items 1-4 of the evaluation criteria) and Doctor's 41.67 points for its technical proposal. Bid price points were then established through a preexisting computer program, which derived 41.04 points for petitioner and 50 points for Doctors. When totalled, petitioner received 90.38 points and Doctors received 91.67 points. Accordingly, the Department proposed to award the contract to Doctors. Petitioner filed a timely protest to contest such award. The gravamen of that protest is petitioner's contention that the Department applied a methodology other than that established by the ITB to derive the bid price points and that had it utilized the methodology established by the ITB petitioner would have received the most points and been the prevailing bidder. 1/ Consistent with petitioner's contention, the proof demonstrates that the computer program used to derive the bid price points and the methodology established by the ITB to derive such points differed with regard to the definition of A in the formula, discussed supra. In the computer program, factor A was defined as the difference between the price of the bid being evaluated and the low bid. In the ITB, factor A was defined as the difference between the percentage of the bid being evaluated and the low bid. The Department was not, however, aware of this dichotomy until the subject protest, believing that its ITB conformed with the methodology it had previously programed for its computer, and, at hearing, offered proof, which is credited, that use of the word "percentage" in the definition of A was a typographical error which should have read "price." Notably, the Department heavily weighed price (50%) in its ITB, and it is apparent the Department intended to use a formula that would create a difference in price scoring that was relative to any difference in the bid prices. Use of the formula, as correctly defined in its computer program, would accomplish such goal. Use of the formula, as incorrectly defined by the ITB and interpreted by petitioner in these proceedings, would not accord any meaningful weight to price. 2/ Under such circumstances, it cannot be reasonably concluded that the Department departed from the essential requirements of law when it declined to apply the methodology as interpreted by petitioner to award the contract. Moreover, for the reasons that follow, petitioner has failed to demonstrate that the Department's decision to stand by its award based on the correctly defined methodology departed from the essential requirements of law. Here, the proof demonstrates that petitioner, upon receipt and review of the ITB, was well aware that the formula for awarding points based on price was nonsensical, and most likely, in error. 3/ Notwithstanding, petitioner took no action under the provisions of general condition 6 and special condition 4.4 of the ITB to raise any question or seek any clarification or interpretation of the formula from the Department. 4/ Rather, petitioner submitted its best price offer, more likely than not, without reliance on the erroneous formula set forth in the ITB. 5/ Under such circumstances, it cannot be concluded that the Department's award of the contract, based on an application of the correct definition of factor A, accorded any bidder an unfair advantage or otherwise departed from the essential requirements of law.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be rendered dismissing the subject bid protest. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 20th day of May 1992. WILLIAM J. KENDRICK 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 20th day of May 1992.
Findings Of Fact In August, 1975, the Department of General Services invited competitive bids for the purchase of supervisory and control equipment and revenue metering equipment for expansion of primary electric utilities in the Capitol Center, a project known as State Project No. DGS-6026/6424, AEP File No. 74288-003. Plans and specifications for the project were developed by the department's consulting architect/engineers Reynolds, Smith and Hills. The Department of General Services (hereinafter Department) and Reynolds, Smith and Hills (hereinafter Reynolds) conducted formal bid opening on September 25, 1975. Bid proposals were received from petitioner, Weston Instruments, Inc. (hereinafter Weston), and from Respondents, Harris Corporation (hereinafter Harris) and Hathaway Instruments, Inc. (hereinafter Hathaway). The amount of the bids were as follows: CONTRACTOR BASE BID ALTERNATE NO. 1-ADD TOTAL Harris 332,000.00 28,649.00 360,649.00 Weston 338,991.00 20,965.00 359,996.00 Hathaway 343,429.00 33,224.00 376,653.00 Hathaway's bid as submitted was responsive to the specifications and other requirements of the bid invitation. Weston's bid was responsive to the specifications and requirements of the bid invitation with the following exception. Specification B-2, in its second paragraph, states: "In order to facilitate the execution of the Agreement, the Bidder shall submit with his proposal a list of and brief description of similar work satisfactorily completed, with location, date of contracts, together with names and addresses of Owners." Weston did not submit that information with its bid but did submit that information on October 9, 1975. The Harris bid as submitted was not responsive to the specifications and requirements of the bid invitation. The material deviations from the specifications found in the Harris bid are as follows: Paragraph 16755-13(c) of the specifications states that data logger equipment by Teletype, Lear Siegler or General Electric will be considered. The Harris bid proposed a data logger manufactured by Practical Automation, Inc. and noted that if Harris was required to conform to the specifications by furnishing a data logger manufactured by one of the three specified manufacturers, its base bid would have to be increased by $635.00. Paragraph 16755-18 of the specifications requires a specific number of supervisory functions at each of the nineteen locations. The Harris bid met the requirements of the specifications at only one of the nineteen locations. At each of the other eighteen locations the Harris bid was from one to three supervisory points deficient. According to the evidence presented it would cost between $250 to $300 per location to furnish the supervisory points left out of Harris' bid. Paragraph 16755-13(d) of the specifications requires that the data logger shall log an uninitiated (alarm) change of status in red lettering. Harris' bid states that the equipment they have chosen is not available with red ribbon printout and that they therefore propose that all changes normally logged in red would instead have an asterisk in the first column. This specification requiring logging in red of an alarm change of status was included by the specifications writer of the architect/engineers as a safety feature. Paragraph 16755-13(e) of the specifications requires that the log shall contain time in a 24 hour format to a tenth of a minute. The Harris bid proposes that the log shall be in seconds rather than tenths of a minute. The specifications require equipment delivery to the job site and substantial completion within 180 calendar days after receipt of Notice To Proceed. The specifications further provide for liquidated damages of $100 per day for each day the contractor fails to meet the above completion date. The Harris bid requested that the liquidated damages clause and the required time for completion be modified to provice that the 180 day period would not commence until all drawings had been approved by the architect/engineers. The architect/engineers, Reynolds, Smith and Hills, calculated that the required drawing time was approximately 60 days. Therefore, the Harris bid proposes that Harris would have 240 days instead of 180 days in which to deliver the equipment to the site and substantially complete the contract. The Harris bid proposed a deviation from the warranty provision of the specifications. The specifications in paragraph E-17 placed the final determination of the need for repairs or changes under the guarantee clause of the specifications with the architect/engineers and the owner. Harris proposes to alter those specifications and place the right of final determination as to the existence and cause of any claim defect with Harris. Harris' bid contained information setting forth their experience with the Micro II System, which is the system they proposed in their bid. That information shows that the Micro II System had been in use no more than two and one-half years at the time of the bid letting. In its evaluation of the bidders' proposals, based upon the data contained in the original bid packages, Reynolds calculated that the deviation from the specifications by Harris gave Harris at least a $10,135 advantage in its bidding (See Petitioner's Exhibit 8). That evaluation did not include a dollar value for the deviation from the specification concerning the warranty. In that evaluation Reynolds noted the failure of Harris to meet the supervisory point requirements. They calculated that this would add $3,900 to Harris' bid based on twelve locations at $300 per location. In fact, Harris failed to meet the requirements at eighteen locations, which at $300 per location, would add $5,400 to Harris' bid. Thus, using the evaluation figures of Reynolds, it appears that Harris' deviations from the specifications gave them at least an $11,635 advantage in the bidding. On October 9, 1975, Reynolds held a conference with each of the three bidders. At that conference Weston provided a list of three names, with addresses of customers for whom Weston had completed work similar to that proposed in its bid. Reynolds did not receive any material information from these references until after October 31, 1975. At least two of the references commented favorably on Weston's performance in letters to Reynolds dated January 13, 1976 and January 20, 1976, respectively. By letter dated October 31, 1975, Reynolds' project manager for this project conveyed the architect/engineers' recommendation for award to the Department. That recommendation was that the contract be awarded to Hathaway Instruments, Inc., for the base bid item only. The recommendation noted that the alternate should be rejected because the bids for the alternate were excessively high. As stated in the letter of recommendation, Reynolds rejected Harris' bid because "there were several major exceptions taken to the specification (sic), the most serious of which was their not being able to meet the delivery schedule." Also, as stated in the letter of recommendation, Weston's bid was apparently rejected because they "could not meet the experience qualifications as specified." Harris, at the time of the bid letting, had five years experience with its Micro I equipment but had only two and one-half years experience with its Micro II equipment. The two lines of equipment constitute two generations of equipment. Neither Harris nor Weston had five years experience with the specific equipment proposed in their bids. Both, however, have had five years experience with the general type system and equipment proposed with Harris being the more experienced of the two. Based upon the evidence presented Weston and Harris are both responsible bidders. In November, 1975, the Department directed Reynolds to contact Harris and determine whether Harris would conform their bid to the specifications. The project manager for Reynolds so contacted Harris and by letter dated November 17, 1975 (Petitioner's Exhibit 4), notified the Department that Harris stated they would deliver the equipment within the time required by the specifications. That letter reiterated Reynolds' recommendation of Hathaway as contained in their letter of October 31, 1975. Reynolds did not retreat from their recommendation of Hathaway and at the final hearing again stated that recommendation. Thereafter, the Department proposed to award the contract to Harris and set the matter for final decision on December 2, 1975. Harris' bid was a responsible offer but was not in full compliance with the bid specifications and conditions. The bids of Weston and Hathaway were responsible offers and were in full compliance with the bid specifications and conditions except as noted in paragraphs 4, 7 and 19 herein. Paragraph B-18 of the Specifications and Contract Documents (Petitioner's Exhibit 1) states that "No bid modification will be accepted after the close of bidding has been announced." Section A of the same document states that bids would be received until 2:00 p.m. EDST, on September 25, 1975. No evidence was presented which would show that the time for receiving bids was extended beyond that set forth above. Therefore, the close of bidding appears to have been at 2:00 p.m., EDST, September 25, 1975. The agreement by Harris to conform their bid to the specifications and conditions constituted a material modification of their bid. This modification occurred in November, 1975, after the close of bidding, and was therefore not allowable under the terms of the Specifications and Contract Documents set forth above. The lowest base bid and alternate bid of those responsible offers received in full compliance with the bid specifications and conditions was that of Weston. No evidence was presented which would show that the Department submitted its complete File on this matter to the Division of Purchasing along with its reasons for recommending a bid other than the low bid meeting specifications, as required by Section 13A-1.02(a), F.A.C.
The Issue Whether Respondent's intention to award the contract arising out of Invitation to Bid 12/13-44 (the ITB) to Paragon Construction is contrary to Respondent’s governing statutes, Respondent’s rules on policies, or the ITB specifications.
Findings Of Fact Stipulated Facts On November 16, 2012, the Department posted its ITB for demolition and renovation at the Pompano State Farmers Market. The ITB specified that bids were to be submitted to the Respondent at 407 South Calhoun Street, Mayo Building, Room SB-8, Tallahassee, Florida. The bid opening for the ITB was scheduled for 2:00 p.m. on December 21, 2012. Petitioner's response was received by the Department on December 21, 2012, at 11:07 a.m. Three other responses, from Bi-Tech Construction, Inc., JW Anthony Builders, Inc., and Eagle Enterprises, were received by Respondent prior to 2:00 p.m. on December 21, 2012. Five responses, from Paragon Construction, West Construction, State Contracting and Engineering Corporation, Real Concepts, and Anzco, Inc., were delivered by FedEx to the Department's mailroom at 2:02 p.m. on December 21, 2012. Each was tendered to FedEx on December 20, 2012, for delivery to the Department by 8:30 a.m. on December 21, 2012. The five responses were logged in by the Department's employees on December 21, 2012, between 2:03 p.m. and 2:04 p.m. Petitioner's response and the responses of Bi-Tech Construction, Inc., JW Anthony Builders, Inc., and Eagle Enterprises were opened at approximately 2:10 p.m. by Tina Peacock, assistant to the Department's purchasing director, Christie Hutchinson. Ms. Hutchinson advised Petitioner at 2:15 p.m. on December 21, 2012, via e-mail that Petitioner had provided the apparent low bid of $114,500. At 2:30 p.m. on December 21, 2012, the Department's mailroom personnel delivered the five additional responses to the Department's purchasing bureau in room SB-8 and left them unopened on Ms. Peacock's desk. Ms. Peacock had already left for the day. Ms. Hutchinson discovered the responses and opened them at approximately 2:40 p.m. on December 21, 2012. At 2:56 p.m., Ms. Hutchinson advised Petitioner that Petitioner was no longer the apparent low bidder and that the apparent low bidder was Paragon Construction, with a bid of $98,873. The Department was initially advised by FedEx on January 9, 2013, that the delay in delivering the five responses was due to weather delays in FedEx's Tennessee processing center. FedEx later confirmed that the delay was caused by their internal package sorting network and not due to weather conditions. The tabulation sheet showing the Department's intention to award a contract to Paragon Construction was posted on January 7, 2013. Petitioner timely filed its Petition challenging the Department's intended award. Findings of Fact Based on the Evidence of the Record Under “Special Terms, Conditions and Specifications,” the ITB states in the "Purpose" section that the "project budget is estimated to be $120,000.” All mail and express courier deliveries addressed to the Department are delivered to the Department's central mailroom, which is located in a different part of the building from Ms. Hutchinson's office. Mailroom personnel log in the delivered item, then deliver the mail or item to the room specified on the envelope or package. The normal bid opening procedure used by the Department is for bids to be opened by Ms. Peacock in Ms. Hutchinson's office. In this instance, both Ms. Peacock and Ms. Hutchinson were present for the opening of the first four bids that were received before 2:00 p.m. Bid responders are notified in the ITB that they may, but are not required to, attend the bid opening, which is public. At approximately 2:33 p.m. on December 21, 2012, Ms. Hutchinson received an e-mail from one of the bidders, West Construction, inquiring if the Department received their bid package by the deadline. She sent the tabulation sheet to West Construction. Ms. Hutchinson went to Ms. Peacock's desk at approximately 2:40 p.m. to return the file with the tabulation sheet, and discovered the additional envelopes on Ms. Peacock's desk. She went to the mailroom to find out when the packages were received by the Department, then sought advice from the Department's legal counsel. Upon receiving that advice, Ms. Hutchinson proceeded to open the late arrivals. By that time, Ms. Peacock had gone home, so Ms. Hutchinson personally opened them. There is nothing in the record to indicate that anyone else was in the room with Ms. Hutchinson when she opened the late-arriving bid responses. Between the time of delivery of the responses to the Department, and the opening of the same, the five bid responses remained sealed. Ms. Hutchinson testified that prior to the opening of the five late bids, she did not know what comprised the contents of each bid and had no way of knowing whether the late bids were higher or lower than those already opened. Her testimony in this regard was credible and is accepted. Paragraph 16 of the General Instructions to Respondents reads as follows: Minor Irregularities - Right to Reject. The buyer reserves the right to accept or reject any and all bids, or separable portions thereof, and to waive any minor irregularity, technicality, or omission if the Buyer determines that doing so will serve the State's best interests. The Buyer may reject any response not submitted in the manner specified in the manner specified by the solicitation documents. The “Evaluation and Award” section of the ITB also informs the bidders that "[a]s the best interests of the state may require, the right is reserved to reject any and all bids or waive any minor irregularity or technicality in bids received." The ITB contains the following language regarding late bids: LATE BIDS Bids received after the bid opening time and date will be rejected as untimely and will not be opened. A late bid notice will be sent to the bidder upon the posting of award notice with instructions for its return. Unclaimed late bids will be destroyed after 45 days. Offers from vendors listed on the Department's posted award notice are the only offers received timely in accordance with the Department's bid opening time and date. After leaving work shortly after 2:00 p.m. on Friday, December 21, 2012, Ms. Peacock did not return to work until January 2, 2013. She then contacted FedEx to inquire about the reason for the delay in the delivery of the late responses. Initially, she was informed that the delay was due to weather. However, by letters dated January 29, 2013, the Department was informed by FedEx that the delay was caused by their package sorting network. Whether the delay was caused by the weather or the package sorting network is of no consequence. In either event, the lateness of the five bids which arrived at the Department two minutes after the posted bid opening time was due to problems of the courier, and was not caused by the bidders. The January 29, 2013, letters also informed the Department that the late packages, including the one containing the bid from Paragon Construction, were tendered to the courier service for morning delivery on December 21, 2012.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Department of Agriculture and Consumer Services enter a final order dismissing the bid protest filed by Petitioner. DONE AND ENTERED this 26th day of March, 2013, in Tallahassee, Leon County, Florida. S BARBARA J. STAROS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of March, 2013.
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made. On October 11, 1991, DOT's District Four office let out for bid district contracts E4551 and E4554. Contract E4551 calls for the mechanical sweeping of Interstate 95 in Broward County. Contract E4554 calls for the mechanical sweeping of Interstate 95 in Palm Beach County. At a mandatory pre-bid conference, the bidders for the Contracts were provided with a packet which included a Notice to Contractors and Standard Specifications. The Notice to Contractors is a four page document which is specific to each contract. The Standard Specifications are the same for all district contracts. Both the Notice to Contractors and the Standard Specifications to the bidders required bidders to submit proof of the ability to acquire a performance and payment bond in an amount equal to the contract bid price. Bidders could satisfy this requirement by submitting a bid guarantee of 5% of the bid, submitting a notarized letter of intent from a bonding company or by providing a Certificate of Qualification issued by Respondent. The Notice to Contractors for both Contracts provided as follows: Failure to provide the following with each bid proposal will result in rejection of the contractor's bid.... District contracts of $150,000 or less require the following as proof of ability to acquire a performance and payment bond: A notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a performance and payment bond in the amount of your bid, should your firm be awarded the project; in lieu of a notarized letter the following may be substituted: (1) a bid guarantee of five percent (5%); or (2) a copy of the Contractor's Certificate of Qualification issued by the Department. (No emphasis added) Similarly, the first Standard Specification provides: 1.1 Bidders (contractors) A contractor shall be eligible to bid on this contract if:... (2) Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the District Contract Administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of your bid, should your firm be awarded the project.... The requirement to submit proof of the ability to acquire a performance and payment bond has been imposed on the Districts by DOT Directive 375-00-001-a (hereinafter the "Directive".) This Directive was in place at all times material to this proceeding. Section 3.2.2 of the Directive provides: A contractor shall be eligible to bid if: ...Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the minicontract administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of the bid, should the firm be awarded the project. A bid guaranty as specified above may substitute as proof of ability to obtain a performance and payment bond. This applies to bids amount over or under $150,000. A copy of the Contractor's Certificate of Qualification issued by the Department may be substituted in lieu of a notarized letter for those contracts not requiring a bid bond. The bids for the Contracts were opened on October 11, 1991 in Fort Lauderdale, Florida. Bids were received from four bidders: CPM, SCA, Florida Sweeping, Inc. and P. F. Gomez Construction Co., Inc. In its bid proposals, SCA included executed bid bonds in an amount sufficient to cover the amount of each bid proposal. Each bid bond cost $55.00. CPM did not submit executed bid bonds with its proposals. Instead, CPM submitted letters from Mark A. Latini dated September 25, 1991. Those letters were provided on the stationery of Bonina-McCutchen-Bradshaw, Insurance and indicate that Mr. Latini is the "bond manager." The letters provide as follows: Amwest Surety Insurance Company is the surety for the above-referenced contractor and stands ready to provide the necessary performance and payment bond for the referenced bid should Certified Property Maintenance, Inc., be low and awarded the referenced contract. All bonds are subject to normal underwriting requirements at the time of the bond request.... The letters submitted by CPM with its bid proposals were not notarized and were not binding obligations to issue bonds since they were conditioned upon meeting certain unspecified underwriting requirements at the time of the bond requests. The submitted bids were reviewed by the District Four Contractual Services Office. The bids submitted by CPM were the lowest for each contract. Its bid for Contract No. E4551 was $109,343.97. Its bid for Contract No. E4554 was $30,312.63. SCA's bids for the Contracts were $139,442.14 and $44,100.00, respectively. During the initial review of the bid proposals, the Contractual Services Office rejected CPM's bids for failure to have its bonding company "letters of intent" notarized. In addition, the bid proposals submitted by Florida Sweeping, Inc. were rejected for failure to note a required addendum and the bids submitted by P. F. Gomez Construction Co., Inc. were rejected because the "proposal bond was not of proper character". On October 18, 1991, DOT posted its Notice of Intent to Award the Contracts to SCA, the only bidder for the Contracts whose proposals had not been rejected. CPM timely filed protests of the proposed awards to SCA on October 22, 1991. The protests filed by CPM argued that its bids should not have been invalidated simply because the bonding company's letters did not include notary seals. At this point, the sole basis for the disqualification of CPM's bids was the failure to have the bonding company letters notarized. Respondent contends that, except for the absence of the notary seal, the letters submitted by CPM met the requirements of the Notice to Contractor and the Standard Specifications cited above. However, those letters are equivocal and do not evidence a binding commitment to issue a bond upon award of the contract. The DOT officials admit that they do not know what "normal underwriting requirements" would or could be required by CPM's bonding company. This conditional language makes it uncertain whether CPM could obtain the necessary bond. Therefore, it is concluded that those letters do not meet the requirements of the Notice to Contractors, the Standard Specifications or the Directive. A hearing on CPM's protest was not held. CPM's president, Raymond Hanousek, who prepared CPM's bid and attended the pre-bid meeting, called DOT's District office the day the bids were opened and was informed that his company's bid was low, but was rejected because its bond commitment letter was not notarized. Mr. Hanousek spoke with Joseph Yesbeck, the District's Director of Planning and Programs. After their conversation, Mr. Yesbeck reviewed the file and met with Teresa Martin, the District's contract administrator for construction and maintenance contracts, and other members of the contracting staff. Ms. Martin explained why CPM's bid had been disqualified, and the matter was thereafter discussed with the District and Department attorneys. After reviewing the situation, Mr. Yesbeck determined that the failure to submit notarized letters should be considered a non-material deviation and the bids submitted by CPM should be accepted and considered the low responsive bids. Mr. Yesbeck concluded that the absence of the notary seal did not give any competitive advantage to CPM and that defects of this nature are routinely allowed to be cured. Therefore, he reversed the contract administrator's decision to disqualify CPM on both Contracts. The District secretary concurred in the decision reached by Mr. Yesbeck to repost the award of the Contracts. Mr. Yesbeck prepared a joint letter of reposting which removed CPM's disqualification and declared CPM to be the low bidder for both Contracts. At the time Mr. Yesbeck made his decision, he had not reviewed the Directive from the Assistant Secretary's office stating that there must be a notarized letter showing proof of ability to obtain a performance and payment bond. Mr. Yesbeck did not review the Directive until his deposition was taken one week prior to the hearing in this case. According to Ms. Martin, the option to provide a notarized letter from a bonding company as an alternative to the posting of a 5% bid guarantee or obtaining prequalification was designed to promote participation in state contracting by small business and minority business enterprise applicants. While DOT was apparently trying to make it easier and cheaper for companies to bid by not requiring a bond to be posted, the DOT Directive and the bid documents still clearly required unconditional proof that a bid bond would be issued if the contract was awarded to the bidder. CPM was not prequalified nor did it post a bond. Thus, in order to meet the requirements of the Notice to Contractors and the Standard Specifications, CPM's only option was to submit a notarized letter showing proof of ability to obtain a performance and payment bond. DOT was never provided with any proof that CPM had been prequalified by the bonding company for a bond and/or that a bond would unconditionally be issued if CPM was awarded the Contracts. Because the letters stated they were "subject to normal underwriting requirements at the time of the bond request", there was some possibility CPM would not be able to obtain a bond. Such a condition was not permissible under the bid doucments. The decision to accept CPM's bid was contrary to the DOT Directive, the Notice to Contractors and the bid specifications which require that a bidder demonstrate proof of ability to obtain a performance and payment bond. Consequently, it is concluded that DOT's decision to accept the conditional, unnotarized letters submitted by CPM was arbitrary and capricious. There is some indication that other DOT Districts have, on occasion, waived the notarization requirement for the bond letter. However, it is not clear whether the language in the bid documents was the same or similar in those cases and/or whether the bond letters were conditional. In the past, whenever District Four has gotten a bid without a notarized bond letter, the bid was rejected. Apparently, there has never been a protest based on such a denial in District Four. Under Section 337.18, DOT does not need to require notarized, unconditional bond letters on contracts under $150,000. Indeed, there was a suggestion that some DOT Districts have dropped the requirement for certain contracts under $150,000. However, the bid documents in this case clearly required some proof that the bidder could acquire a performance and payment bond upon award of the Contracts. It was incumbent for all bidders to meet this requirement. It was arbitrary to delete this requirement after the bids were submitted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding the bids submitted by CPM to be non-responsive and rejecting those bids. Petitioner should enter into negotiations with SCA regarding the award of the contract. In the absence of a favorable negotiation, Petitioner should enter a Final Order rejecting all bids and opening the Contracts up for new bids. DONE and ENTERED this 24th day of March, 1992, at Tallahassee, Florida. J. STEPHEN MENTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of March, 1992.
Findings Of Fact Pursuant to Section 287.042(2), Florida Statutes, the Department of Management Services (DMS), lets various Invitations to Bid (ITB) for the benefit of state agencies, cities, counties and other local government agencies so that these entities may purchase a variety of goods and services. On August 24, 1993, DMS issued Invitation To Bid #28-070-700-P. The bid was one of 225 Invitations to Bid issued by DMS in 1993. The bid was for the purchase of medium and heavy trucks. The bid which is the subject of this case involves truck #150. The truck #150 bid has thirteen pages with forty- seven options plus base truck bid blanks. General Condition 1 of the Invitation to Bid requires that "all corrections made by bidder to his price must be initialed." Other documents provided by the Department to interested bidders as part of the bid package reiterate the requirement that all price changes must be initialed. These documents include the "Checklist," a document entitled "Common Problems That Result in Bid Being Rejected" and the document entitled "Medium and Heavy Trucks Index." The requirement in General Condition I of the Invitation to Bid, that all price changes must be initialed, contains no printed exceptions with respect to "nonpreselected" options. The purpose of the requirements of General Condition 1 of the Invitation to Bid is to protect both the State of Florida as well as competing vendors. The reason for the requirement that all price changes or alterations be initialed by the vendor is to protect both the State of Florida against a successful bidder later inserting higher option prices and charging the state agencies those prices, and the vendor against the State later inserting lower prices and attempting to hold the vendor to those prices. General Condition 13 of the bid document states: LEGAL REQUIREMENTS: Applicable provisions of Federal, State and Local law and all ordinances, rules, and regulations shall govern development, submittal and evaluation of all bids received in response hereto and shall govern any and all claims and disputes which may arise between persons(s) submitting a bid response hereto and the State of Florida, by and through its officers, employees and authorized representatives, or any other person, natural or otherwise; and lack of knowledge by any bidder shall not constitute a cognizable defense against the legal effect thereof. . . (Emphasis added.) General Condition 13 incorporates Rule 60A-1.001(3), Florida Administrative Code, which permits the State to waive minor irregularities in the conformance of a bid proposal to the formal bid requirements. The lowest bidder is determined by two factors. The first factor is the price for the base truck. The base truck is the minimum truck which can be ordered in this contract with no options. It is basically a chassis with an engine. The second factor involves additions to the truck called preselected options or predetermined options. All of the other options for the particular vehicle are deemed nonpreselected options. Preselected options are generally the most frequently ordered additions to the base truck along with some other less frequently ordered options. The preselected options can vary from bid to bid; however, DMS always determines the preselected options before opening the bids. The price of any option cannot exceed retail price. There is, therefore, a ceiling for the prices of preselected and nonpreselected options. The preselected options are not announced until after the bid is posted to prevent dishonestly low prices on preselected options and to promote competitive prices throughout the contract document. The bidders therefore do not know which options are preselected when they are composing their bids. There is nothing to be gained by a bidder loading a particular option with a high markup, because the bidder cannot guarantee that the option will not be preselected. The bid evaluation price is the base truck price plus the price of the combined chosen preselected options. DMS received numerous bids on the ITB, including a bid from Petitioner and Intervenor. Atlantic Ford bid a combined price of $38,737.00, and was the apparent low bidder; Duval Ford bid a combined price of $39,944.00 and was the apparent second low bidder. Upon receipt of the bids from the bidders, the bids were held in a locked room until the bid opening. After the bid opening, the purchasing specialist assigned to this bid reviewed each bid for conformity to the general non-technical specifications. Only the Bureau of Procurement is responsible for the nontechnical review although other Bureaus or Divisions may review and have input into the review process. However, these other Divisions' input is not binding. In the nontechnical review the purchasing specialist reviewed each bid's signatures, whether or not the bid was signed in ink, and numerous other requirements. The purchasing specialist also reviewed the bids to determine if all base bid blanks and price blanks for preselected options were filled in and that no corrections were made to those prices without a bidder's initials acknowledging the change. The bids which failed to meet the general conditions of the bid for base bid items and preselected options were rejected as nonresponsive bids. After the initial nontechnical review, the bids were sent to the Division of Motor Vehicles and Watercraft for a technical evaluation. However, since each bid document contains bids for several trucks, there may be a mixture of responsive and nonresponsive bids for various trucks in the same document and the Division of Motor Vehicles and Watercraft may receive responsive and nonresponsive bids for technical review. John Bevins of the Division of Motor Vehicles and Watercraft reviewed the technical parts of the bid. This information included manufacturer's codes for options and base truck features as well as the manufacturer's retail price which no bidder can exceed. After John Bevins completed his review, he filled out a bid rejection recommendation form. John Bevins chose to include nontechnical items in his recommendation, although this was beyond the scope of his review. Mr. Bevins indicated on his bid evaluation form that Atlantic Ford failed to initial a typewritten correction on option 8206 of truck 150. Mr. Bevins returned the reviewed bids to the purchasing specialist along with his recommendation that Atlantic Ford's bid was not responsive since it failed to initial the typewritten correction on option 8206. The purchasing specialist discussed the failure of Atlantic Ford to initial the typewritten correction on option 8206 with H. P. Barker, Jr., the Bureau Chief of Procurement. H. P. Barker, Jr. has the final authority within the Bureau of Procurement to decide if a bid is responsive. He is the customary agency decision-maker on these matters. After careful consideration and discussion, H. P. Barker, Jr., determined that the failure of Atlantic Ford to initial the typewritten correction on a credit is a minor irregularity according to the Department's purchasing rules, since option 8206 was a nonpreselected option and did not effect the total bid price for determining the lowest bidder. Barker's decision was based on the State's interest in obtaining trucks at the lowest price, thereby obtaining the most goods per contracting dollar. Duval Ford conceded that the typewritten correction was faint and does not appear on photocopies of the bid. Barker testified that DMS accepts photocopies of bids. If Atlantic Ford had submitted a photocopy of its bid, as it could have legally done, then the typewritten correction would probably not have been noted by the Department or the other bidders. Barker also testified that bids are not rejected if nonpreselected option blanks are not filled in. Dealers can choose not to offer all nonpreselected options. Finally, in this case option 8206 was a credit. Even if a purchaser under the contract orders option 8206, it will pay six dollars ($6.00) less for the overall truck from Atlantic Ford than if the truck was ordered from Duval Ford. Duval Ford offered evidence from 1991, that DMS had rejected a bid of another dealer for failure to initial a price change on a nonpreselected option. However, Nelson Easom, Duval Ford's manager had not been able to discover any similar rejections in the subsequent two years. Barker testified that the policy regarding noninitialed nonpreselected options changed three years ago. DMS then decided to treat them as minor irregularities. The policy change was based on the public policy to award the lowest bid whenever possible and to prevent minor deviations in bids from causing the state to pay higher prices for goods and services. Moreover, the evidence did not show any abuse of the bid process which would occur should price changes not be initialed. The alleged "protection" afforded to bidders by requiring every change to be initialed is at best tenuous since any fraudulent price changes could easily be recognized by the party against whom the change was made. Given these facts, this case over initials appears to be much ado about nothing, and the failure of Atlantic Ford to initial its price change on a nonpreselected option is a minor irregularity and waiveable by DMS. DMS therefore did not act in an arbitrary and capricious manner by waiving the irregularity and awarding the bid to Atlantic Ford.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent issue a Final Order in this case dismissing Petitioner's formal protest and awarding the contract for the Project to Atlantic Ford. DONE AND ENTERED this 15th day of March, 1994, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of March, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-6790BID The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 16, 17, 18, and 19, of Respondent's Proposed Findings of Fact are adopted in substance insofar as material. Paragraphs 15 of Respondent's Proposed Findings of Fact was legal argument. The facts contained in paragraphs 1, 2, 3, 4, 10, 13, 17, 18, 21 and 24 of the Petitioner's Proposed Findings of Fact are adopted in substance insofar as material. The facts contained in paragraphs 11 of Petitioner's Proposed Findings of Fact were immaterial. The facts contained in paragraphs 5, 6, 7, 8, 9, 12, 14, 15, 16, 19 and 20 of Petitioner's Proposed Findings of Fact are subordinate. 9. The facts contained in paragraphs 22 and 23 of Petitioner's Proposed Findings of Fact were not shown by the evidence. COPIES FURNISHED: Charles Cook Howell, III Howell, O'Neal & Johnson Suite 1100 Jacksonville, Florida 32202 Cindy Horne Office of the General Counsel Department of Management Services Knight Building, Suite 309 2737 Centerview Drive Tallahassee, Florida 32399-0950 Kerri L. Barsh Attorney at Law Greenberg Traurig et al. 1221 Brickell Avenue Miami, FL 33131 Paul A. Rowell, Esquire General Counsel Department of Management Services 312 Knight Building 2737 Centerview Drive Tallahassee, FL 32399-0950 William H. Lindner Secretary Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950
