The Issue Whether Saxon Business Products, Inc.'s ("Saxon") response to the Department of General Services' invitation to bid for walk-up convenience copiers should be disqualified on grounds that: Saxon's omission of a supply price list was a material deviation from the bid specifications and conditions; and Saxon's walk-up convenience copier, model "Saxon 300," failed to prove two-sided copy capability.
Findings Of Fact I. Invitation to Bid On June 10, 1981, DGS issued invitation to Bid No. 544-600-38-B ("ITB") entitled, "Walk-Up Convenience Copiers; Bond Paper and Magazine Finish Bond Paper." The ITB proposes an annual contract under which state agencies and institutions can purchase copying machines. It contains general and special conditions and specifications, and warns vendors that bids that do not comply with such conditions "are subject to rejection." (Testimony of Celnik) The ITB specifications divide copiers into two groups: Group I, plain bond copiers, Group II, magazine finish copiers. The copiers are further categorized by type: Type I indicates minimum features; Type II indicates two- sided copying capability; Type III indicates one reduction capability; and Type IV indicates two or more reduction capabilities. These types are further separated into 12 classes on the basis of speed and volume (P-1.) The ITB special conditions instruct bidders to submit bid sheets 2/ breaking down all copying costs to a per-copy basis. Bids are to be evaluated and contracts awarded to bidders submitting the, lowest cost per copy in each category of copier. Cost per copy is calculated by using a specific cost formula. (P-1.) The ITB cost formula contains three components: machine cost, labor cost, and supply cost. DGS proposes to disqualify Saxon's bid in several categories of copiers for failure to supply a supply price list required by the supply cost component. This component provides, in relevant part: C) SUPPLY COST - The bidder shall compute supply costs on the Manufacturer's Brand. If there is an existing state con- tract for supplies for the manufacturer's brand equipment, the state contract price may be substituted. Supply costs will be rounded to six (6) decimal points. All other costs will also be rounded off to six (6) decimal points. The volume price used by the vendor to compute supply cost shall be based on the monthly median vol- ume of the type and class being bid. Supply cost submitted shall be firm for the contract period, except for paper, and all supply costs shall be current market price, verifiable. Vendor must submit supply price lists with his bid to substantiate that correct price vol- umes were used, unless state contract prices were used. A contract award may include supplies if deemed in the best interest of the State. By electing to substitute state contract supplies, the vendor is certifying that his equipment, using said supplies, will meet all per- formance requirements of this bid and of the equipment manufacturer. NOTE - All cost formulas will be verified by the Division of Purchasing and errors in extension will be corrected. In the event incorrect supply cost volumes are used by a bidder, the Division of Purchas- ing will adjust these costs to the median volume range. (e.s.)(P-1.) The purpose of the supply price list requirement, included in DGS's 1980 and 1981 ITB for convenience copiers, is to enable DGS to verify the supply cost figures shown on a vendor's bid sheets; in this way, DGS can insure that all vendors are using correct quantity pricing on their bid sheets. 3/ (In the past, some bidders had used lower supply prices, which were tied to high volume purchases; but those volumes frequently exceeded the state's needs and the median volumes specified by the ITB for each category of copier.) The verification procedure followed by DGS in both 1980 and 1981 involves checking the vendor's bid sheets against the prices shown on the supply price list. 4/ If DGS finds an inconsistency between the two, it "corrects" the bid sheet supply cost upward or downward to reflect the price shown on the supply price list. 5/ Such a bid sheet correction would also change the total median cost per copy, the factor used to evaluate competing bids. DGS also checks the supply list to determine whether it contains current market prices. (Testimony of Hittinger, Eberhard.) If a vendor fails to submit a supply price list, DGS cannot verify that the supply prices used on the bid sheet (to compute total median cost per copy) accurately reflect the median volumes specified in the ITB. Neither can DGS determine whether the supply prices used on the bid sheet are set prices, which do not vary with volume, or volume prices, which do; the bid sheets, on their face, do not reveal which type of pricing is being used. (Testimony of Eberhard; P-1.) After sealed bids are publicly opened, DGS has an established practice of not allowing any bidder to submit additional material which could alter price or other information previously submitted on bid sheets. DGS does, however, accept late information if it can be corroborated by an independent source. For example, a bidder might -- after bid opening -- supply its corporate charter number, which can be easily verified by contacting the Department of State. (Testimony of Hittinger, Eberhard.) The ITB special conditions also require DGS to test and approve copiers prior to bid opening. Copiers which are not tested and accepted by DGS are ineligible for a contract award: EQUIPMENT APPROVAL - Each item of equipment bid shall have been tested by the Division of Purchasing prior to the bid opening time and date for performance and reliability under normal working con- ditions. Any bidder whose equipment has not been tested shall provide a model of the equipment on which he intends to bid to a specified testing station, complete with all supplies, at no expense to the State. Testing will extend for a period of twenty (20) working days. In the event evaluation and acceptance of untested ma- chines has not been accomplished prior to the bid opening date and time, such machine shall not be eligible for an award. (P-1.) II. Bid Opening: Saxon's Failure to Submit Supply Price List Prior to the 1981 bid opening, Saxon failed to submit a supply price list in connection with its bid. This was apparently an oversight on its part; a year earlier, it had furnished a supply price list in response to a similar ITB for convenience copiers. Because of Saxon's omission, DGS was unable to verify the supply prices used by Saxon on its bid sheets or determine whether Saxon was utilizing set or volume prices. (Testimony of Eberhard, Celnik, Hittinger.) After bid opening, Saxon notified DGS that the supply prices shown on its bid sheets were set supply prices -- unit prices which do not vary with volume -- and confirmed that they are the supply prices which it now offers to the state. (Testimony of Celnik.) In its evaluation of the bids, DGS applied the requirement of a supply price list equally to all bidders. All bidders who omitted a supply price list were informed that they were disqualified. Saxon's bid was disqualified in five copier categories: Group I, Type I, Class I; Group I, Type I, Class II; Group I, Type I, Class IV; Group I, Type II, Class I; and Group I, Type II, Class II. At least 11 vendors, however, did submit supply price lists with their bid sheets; approximately one-third were set price lists, the remaining were volume price lists. (Testimony of Eberhard; P-3.) If a vendor could submit a supply price list after the bid opening, it could effectively decrease or increase its bid. (This is so because, in case of a conflict between the bid sheet supply price and the supply price list, the price list value will prevail. A change in the bid sheet supply price will change the cost per copy figure the determining factor in awarding contracts.) A vendor submitting a late supply price list would have an unfair advantage since it could change its bid after bid opening while its competitors could not. The competitive nature of the bidding process would be impaired. (Testimony of Hittinger, Eberhard.) Furthermore, if late submittal of a supply price list was allowed, a bidder could disqualify itself by refusing to provide it; the bidder would then have the advantage of revisiting its bid and -- if it chose -- withdrawing it after bid opening. The opportunity to withdraw a bid -- after bid opening -- would be an advantage not enjoyed by those who timely submitted supply price lists with their bids. (Testimony of Hittinger, Eberhard.) In some copier categories, the vendors who omitted supply price lists were the low bidders. If DGS disqualifies them for their omission, it must award the contract to the next highest bidder. The difference between those low bids and the next higher bid is substantial -- in some cases exceeding 23 percent. 6/ (Testimony of Celnik, Eberhard, Nee, Reinhart.) III. Failure of "Saxon 300" to Demonstrate Two-Sided Copying Capability In accordance with the ITB, Saxon submitted its "Saxon 300" copier to DGS for evaluation and testing. Prior to bid opening, DGS conducted a 20-day test of the machine. The "Saxon 300" machine which DGS tested lacked two-sided copying capability. It could reproduce clearly on one side, but not on the other. The "Saxon 300" sales literature and instruction manual submitted with the machine did not represent that the machine had two-sided copying capability. (Testimony of Nee; 1-5, 1-6, 1-7, R-2.) The "Saxon 300" may have two-sided copying capability, but only after special modifications are made to the copier. These modifications include removal of a roller device, replacement of the heating element, and replacement of the blower system. Saxon did not indicate at the time of testing, or in its bid, that the "Saxon 300" required such modification for two-sided copying capability. Neither did it indicate what, if any, additional costs would be charged for such modifications. (Testimony of Nee, Wallace; R-3.) After DGS tested the "Saxon 300," it sent Saxon a form letter indicating that the copier met minimum operating requirements. The letter did not inform Saxon that the machine lacked two-sided copying capability because DGS did not consider the lack of such capability a major malfunction in the equipment. (Testimony of Nee.) If a machine malfunctions, DGS has -- in the past -- allowed vendors to correct the deficiency or substitute another machine. (Testimony of Nee.) The Group I, Type II, Class I category of copiers, requires two-sided copying capability. Saxon bid its "Saxon 300" as a copier which meets this requirement. (Testimony of Celnik, Nee; P-1.)
Recommendation Based on the foregoing, it is RECOMMENDED: That Saxon's bids in Group I, Type I, Class I; Group I, Type I, Class II; Group I, Type I, Class IV; Group I, Type II, Class I; and Group I, Type II, Class II be disqualified; and That Saxon's bid in Group I, Type II, Class I be disqualified. DONE AND RECOMMENDED this 26th day of February, 1982, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of February, 1982.
Findings Of Fact In November, 1990, the Respondent, the Department of State, sought proposals for the lease of office space for its Division of Licensing. On or prior to December 7, 1990, the proposal opening date, at least six proposals were received by the Respondent. Those proposals were designated by the Respondent as "Tallahassee Associates" (the Petitioner's proposal), "Crossland Agency" (the Intervenor's proposal), "Woodcrest A", "Woodcrest B", "T.C.S." and "DeVoe". On January 2, 1991, the Respondent posted a standard form Bid Tabulation indicating that the following scores had been awarded to the following proposals: Proposal Score Woodcrest A 82 Woodcrest B 82 Tallahassee Associates 73 Crossland Agency 85 DeVoe 54 The proposal of T.C.S. was not evaluated by the Respondent because it was determined to be non-responsive. The Respondent also posted a copy of a memorandum dated January 2, 1991, with the January 2, 1991, Bid Tabulation. The memorandum was from John M. Russi, Director of the Division of Licensing, to Ira Chester, Chief of the Bureau of General Services. Mr. Russi indicated in the memorandum that the Intervenor would be awarded the lease. Attached to Mr. Russi's January 2, 1991, memorandum was a Lease Evaluation Worksheet which indicated the scores which had been awarded by the evaluation committee to the responsive bidders for each of the criteria to be considered in determining the winning bidder. Printed at the top-center of the January 2, 1991, Bid Tabulation was the following notice: FAILURE TO FILE A PROTEST WITHIN THE TIME PRESCRIBED IN SECTION 120.53(5), FLORIDA STATUTES, SHALL CONSTITUTE A WAIVER OF PROCEEDINGS UNDER CHAPTER 120, FLORIDA STATUTES. . . . The January 2, 1991, Bid Tabulation was posted at 1:00 p.m., January 2, 1991. Therefore, pursuant to Section 120.53(5), Florida Statutes, any bidder desiring to contest the Respondent's proposed award of the lease was required to file a notice of protest with the Respondent no later than 1:00 p.m., January 5, 1991, and a formal written protest on or before January 15, 1991. T.C.S. filed a notice of protest and a formal written protest to the January 2, 1991, Bid Tabulation within the time periods prescribed by Section 120.53(5), Florida Statutes. T.C.S. contested the Respondent's determination that it was not responsive. The Petitioner did not file a notice of protest or a formal written protest to the January 2, 1991, Bid Tabulation within the time periods prescribed by Section 120.53(5), Florida Statutes. Pursuant to Section 120.53(5), Florida Statutes, the Respondent reviewed the formal written protest filed by T.C.S. and agreed that T.C.S. was responsive. After agreeing that T.C.S. was responsive, the Respondent evaluated T.C.S.'s proposal and awarded points for each of the criteria to be considered. Toward the end of January, 1991, after deciding that T.C.S.'s proposal was to be evaluated, the Respondent notified all other bidders of its decision in a document titled Posting of Notice of Agency Decision. The Posting of Notice of Agency Decision was signed by the Respondent's General Counsel and was addressed to "All Responsive Bidders". The Posting of Notice of Agency Decision provided, in pertinent part: Notice is hereby given that the Florida Department of State, Division of Licensing, is reviewing the bid tabulation which was posted at 1:00 P.M., January 2, 1991 for Lease No. 450:0070. The revised bid tabulation will be posted at 8:00 A.M. on February 4, 1991 at the Purchasing Office of the Department of State . . . . Failure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes, shall constitute a waiver of proceeding under Chapter 120, Florida Statutes. Any person interested in the new tabulation should contact . . . after the posting time listed above. The Petitioner filed a notice of protest and a formal written protest challenging the Posting of Notice of Agency Decision within the times prescribed by Section 120.53(5), Florida Statutes. The Respondent dismissed this formal written protest by final order dated February 22, 1991. On or about January 31, 1991, more than four weeks after the posting of the January 2, 1991, Bid Tabulation, Ocie Allen spoke by telephone with Phyllis Slater, the Respondent's General Counsel. Ms. Slater told Mr. Allen that all proposals would be reevaluated as a result of T.C.S.'s protest. Mr. Allen was a lobbyist for the Petitioner in January, 1991. On February 4, 1991, the Respondent posted another standard form Bid Tabulation indicating that the following scores had been awarded to the following proposals: Proposal Score Crossland Agency 83 Woodcrest A 80 Woodcrest B 80 Tallahassee Associates 71 T.C.S. 71 DeVoe 51 The differences in the scores of the proposals which had been listed on the January 2, 1991, Bid Tabulation, which are reflected in the February 4, 1991, Bid Tabulation were caused by automatic changes in the scores resulting from the addition of T.C.S. and the fact that T.C.S. had the lowest priced bid. The points awarded for the "rental" criterion, which was worth up to 25 points, were determined by a mathematical formula by which the scores of each bidder are calculated based upon the proposed rental charges of all bidders. The award of points for this criterion was determined objectively based upon the mathematical formula. By adding another bidder, T.C.S., the points awarded to all the proposals automatically changed. The scores of the proposals which had been listed on the January 2, 1991, Bid Tabulation, were not otherwise changed. Nor were the proposals of any bidder reevaluated. The Respondent also posted a copy of a memorandum dated January 24, 1991, with the February 4, 1991, Bid Tabulation. The memorandum was from John M. Russi, Director of the Division of Licensing, to Ira Chester, Chief of the Bureau of General Services. Mr. Russi indicated the following in the memorandum: Pursuant to the settlement stipulation signed by Counsel for T.C.S. Associates on January 23, 1991, in reference to the Bid Protest filed January 11, 1991, the attached "Lease Evaluation Work Sheet" is provided for you to re-post. After reevaluating six bid proposals, the evaluating committee concludes that Crossland Agency should be awarded this bid. Each bidder needs to be notified by certified mail of this action. . . . . Attached to Mr. Russi's January 24, 1991, memorandum was a Lease Evaluation Worksheet which indicated the scores of the responsive bidders which had been awarded by the evaluation committee for each of the criteria to be considered in determining the winning bidder. On February 6, 1991, the Petitioner filed a notice of protest to the February 4, 1991, Bid Tabulation. The Petitioner filed a Formal Written Protest, Request for Formal Hearing and Motion for Stay with the Respondent on February 18, 1991. These documents were filed within the time periods specified in Section 120.53(5), Florida Statutes. The Petitioner's Formal Written Protest was filed with the Division of Administrative Hearings by the Respondent on February 28, 1991. Crossland Agency, Inc., was allowed to intervene in the proceeding. On March 1, 1991, the Respondent and Intervenor filed a Motion to Dismiss. A motion hearing was conducted on March 6, 1991, to consider the Motion to Dismiss.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be issued by the Respondent granting the Motion to Dismiss and dismissing this case, with prejudice. DONE and ENTERED this 22nd day of March, 1991, in Tallahassee, Florida. LARRY J. SARTIN 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 22nd day of March, 1991. APPENDIX TO RECOMMENDED ORDER The parties have submitted proposed findings of fact. It has been noted below which proposed findings of fact have been generally accepted and the paragraph number(s) in the Recommended Order where they have been accepted, if any. Those proposed findings of fact which have been rejected and the reason for their rejection have also been noted. The Petitioner's Proposed Findings of Fact Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 3, 5 and 9. 2 12-13. 3 15-16 and 18-21. See 14. 15. The weight of the evidence failed to prove that the scores of the bidders for the "option period" criterion reflected on the January 2, 1991, Bid Tabulation were modified or reconsidered on the February 4, 1991, Bid Tabulation. The suggestion that "the department had discretion to change scores in any of the remaining eight categories" is a conclusion of law and is rejected. These proposed facts are not relevant to the issue raised in the Motion to Dismiss. Nor was any evidence presented to support these proposed findings. 12. The last sentence is a conclusion of law and is rejected. Proposed Findings of Fact of the Respondent and Intervenor Proposed Finding Paragraph Number in Recommended Order of Fact Number of Acceptance or Reason for Rejection 1 1-2. 3 and 7. 5-6 and hereby accepted. 4 8-12. 5 See 14. 6 15 and 17. 18. The last sentence involves an issue not raised in the Motion to Dismiss or at the motion hearing. Nor was any evidence presented to support these proposed findings. See the Preliminary Statement. COPIES FURNISHED: Linda G. Miklowitz, Esquire 1589 Metropolitan Boulevard Tallahassee, Florida 32308 Benjamin E. Poitevent Assistant General Counsel Department of State The Capitol, MS #4 Tallahassee, Florida 32399-0250 M. Christopher Bryant, Esquire Post Office Box 6507 Tallahassee, Florida 32314-6507 Honorable Jim Smith Secretary of State The Capitol Tallahassee, Florida 32399-0250
The Issue The issues presented here concern the propriety of the Respondent's action in its decision to reject all bids submitted for Project 72906-9109, Duval County, thereby excluding the bid of the Petitioner which was the apparent low bid in this process.
Findings Of Fact Alfair Development Company, Inc. (Alfair), is a company owned by Maggie Alford. This company is certified as a "Disadvantaged Business Enterprise" under the terms of Chapter 337, Florida Statutes. This recognition is for benefit of contractual work done for the State of Florida, Department of Transportation. Alfair, together with two other companies who are "Disadvantaged Business Enterprises," responded to a bid opportunity from the Department of Transportation identified as Project No. 72906-9109, Duval County. The other two bidders were ILA Construction Company, Inc., of Daytona Beach, Florida, and Highway Valets, Inc., of Norwalk, Ohio. This project was for the construction of concrete sidewalks and curb cut ramps, installation and repair. The contract was for competition solely among contractors who had been certified as "Disadvantaged Business Enterprises" by the Office of Minority Programs within the Department of Transportation. As such, it is referred to as a "set-aside" job. In a "set-aside" project, bids are accepted from these "Disadvantaged Business Enterprises" in furtherance of the requirements of Section 339.0805, Florida Statutes, which mandates that not less than 10% of the amounts expended from the State Transportation Trust Fund shall be expended with small business concerns owned and controlled by socially and economically disadvantaged individuals. When the bids were opened related to Project No. 72906-9109, Duval County, Alfair was the apparent winner having offered the lowest bid among the three competitors. However, there was a problem with the bid submission by Alfair and the others, in that Alfair's bid was 70% above the pre-bid estimate of the Department of Transportation concerning the expected price that the agency would have to pay for this project. The other two bidders were even higher, but within the range of the 70% above the pre-bid estimate. The pre-bid estimate had been derived by resort to a manual at the Department of Transportation referred to as the Contract Maintenance Administration and Inspection Manual. Within that manual the pre-bid estimate is found, as it was here, by examining historical workload and/or work needs survey information and development of that information and retention of that information through a computation book. That book includes appropriate forms, square yards, per linear feet, etc., for each item of activity to be paid for in the contract. The form to be used in this process shows the project number, the county, the section number of the roadway to be worked, the method of calculating estimated quantities and specific project location, if known. In this arrangement prior contracts of a similar sort to that contemplated in this instance are reviewed in trying to anticipate the contract costs on this occasion. That approach was followed in making the pre-bid estimate in this project. When the comparison was made of those figures it was a comparison to the immediately preceding years' contract for similar work against the work called for in the subject project at hand. In addition, the Department of Transportation contacted concrete companies to make sure that the concrete cost had remained the same. It also verified that minimum wage requirements had not changed from the prior year to the year in question. At hearing, the only rebuttal which the Petitioner offered to this approach of pre-bid estimate was the attempt to present certain documents which were denied admission as evidence in that the representative of the Petitioner, James D. Alford, III, husband to Maggie Alford, was not shown to be sufficiently apprised of contracting matters to explain those exhibits and show how they would tend to rebut the method of pre-bid estimate by the Department of Transportation. The exhibits standing alone did not lend themselves to the interpretation that they were competent rebuttal. When the degree of difference between the pre-bid estimate and the quotes by the bidders was examined by employees within the Department of Transportation, the belief was expressed that the bids were so out of keeping with the pre-bid estimate as to put to question the advisability of contracting with the apparent low bidder, Alfair. The Department felt that it needed to make certain that its pre-bid estimate was not flawed in some fashion and a determination was made to undergo reevaluation of the initial perception held about the bids offered before making a decision. Nonetheless, the impression was created in the mind of Barry D. Bunn, District Contract Administrator for District II, Department of Transportation, that he was expected in his employment to notice that the bids had been rejected. As a consequence on October 25, 1988, the bidders were advised that all bids were rejected for the project. On that same date, an advertisement was placed in the local newspaper that the project was being resolicited for bid purposes and through the advertisement the "set-aside" was deleted. This meant that for purposes of the re-advertisement of October 25, 1988, a general class of bidders could respond, to include "Disadvantaged Business Enterprises." Having been made mindful of this error, Bunn contacted the newspaper where the advertisement had been placed and told them to take that advertisement out of circulation. This occurred on October 26,1988. On that same date further correspondence was directed to the bidders, to include Alfair, in which it was stated that the bids had not been rejected, identifying that the bids were undergoing a reevaluation process. That reevaluation process did not change the initial impression by the Department of Transportation concerning the quotations received as being too far in excess of the Department's pre-bid estimate. Consequently, on November 1, 1988, a further notice of bid rejection was dispatched. That notice did not describe the reason for the rejection, but upon inquiry Mr. Alford was informed that the basis of the rejection was that the bid quotations were too costly when compared to the pre-bid estimate. Under inquiry the Department of Transportation did not identify the details of that explanation in the sense of saying what items they resorted to for drawing that conclusion and the Alfair company did not seek to gain a further explanation of their reasoning through prehearing discovery. The Department of Transportation had refused to give any further information to the Petitioner about this in the course of the telephone conversation between Mr. Alford and an employee in the Lake City, Florida Office of the Department of Transportation based upon the Department's belief that Section 337.168, Florida Statutes exempts it from having to state the pre-bid cost estimate until a contract has been entered into concerning the project. Nonetheless, it was revealed in the course of the hearing what the difference between the bid quotation of Alfair and the pre-bid estimate had been, as well as identifying the methods for deriving that difference. When Alfair received the notice of rejection of its bid it filed a timely notice of protest followed by a timely petition in protest. In addition, the Petitioner posted the appropriate amount of bond under Section 337.11(3)(b), Florida Statutes, to allow it to pursue this case. The pleadings by the Petitioner are not particularly informative but the sum and substance off the allegations as demonstrated in those pleadings and as set forth by remarks of the representative at hearing, identify the belief held by the Petitioner that the Department of Transportation in rejecting the Alfair bid has been unjust, illegal, dishonest and arbitrary. Moreover, Alfair through its representative found fault with the refusal to reveal to him over the phone the methods of arriving at the pre-bid estimate and the general belief that the Department allows the participation in the bidding process and in the award of contract related to "Disadvantaged Business Enterprises" of persons who are not registered or licensed as contractors through the offices of the Department of professional Regulation within the State of Florida. None of these claims were shown to be meritorious through the proofs submitted at hearing. The Department of Transportation seeks the award of costs under the provisions of Section 337.11(3)(b), Florida statutes. The evidence in this hearing reveals that the salaries of the two witnesses who testified for the Department of Transportation, namely Russell O. Davis and Barry D. Bunn, were $125.80 and $130.00, respectively, per day. These employees were involved in the hearing process for one day. In addition to salary costs the State had to pay these employees $62.50 each for per diem allowance in that the witnesses were from out of town. The cost of attendance at hearing by the court reporter is $67.50.
Recommendation In consideration of the facts found and the conclusions of law reached, it is RECOMMENDED that Final Order be entered which rejects all bids and allows the re-advertisement of Project No. 72906-9109, Duval County. DONE and ENTERED this 28th day of March, 1989, in Tallahassee, Leon County, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of March, 1989. APPENDIX Petitioner has submitted a Memorandum in which an indication is given concerning the Project 72906-9109, Duval County, as to the scope of that project-and an explanation in the mind of the representative of Petitioner as to the reason for "set-aside" projects. An accusation is made that the Department of Transportation has tried to avoid bringing black businesses into the mainstream of Florida economy. This is not borne out by the proof. An accusation is made which was not proven at hearing and is not relevant to the resolution of this dispute concerning the contributions to the Florida tax base made by the black community and businesses. This contention together with the allegation that the Department of Transportation is using tactics to deny a small percent.age of tax dollars to recirculate into the black community for economic development and by such arrangement promotes institutional slavery was not proven. Reference to rejection of all bids on October 18, 1988 is at odds with the facts of this case. Further, there is no indication in the facts of this case that for the first time in history a black-owned company was going to cross economic a threshold within the district in terms of gaining business and that the agency rejected the bids to avoid this. Further reference to the procedural history of this case and the fact that corrections had to be made to the process of notification of rejection of all bids is not sufficient reason to overturn the decision to reject all bids. Reference within the Memorandum/Argument to the need to post a bond as being done because it would cause an economic hardship on a black-owned company is rejected as a grounds of argument in that the requirement of bond is a matter of law imposed upon all companies black or otherwise. The fact that office holders within the State Legislature were called upon by the Petitioner to ascertain the status of this project and that the Department of Transportation went through the process of correcting "the initial rejection of bids in favor of a reevaluation phase, has been explained in the fact finding elated to the sequence of events and the procedures involved in rejecting all bids. Reference to the failure to describe the reasons for rejection beyond the fact that the bids were too high has been described in the- fact finding. No evidence was shown that the refusal to indicate the reason in detail or to refer to the source of the data was in the interest of somehow favoring white prime contractors over black contractors. There is some other indication within this Memorandum concerning the meeting of goals for "Disadvantaged Business Enterprises" and the concern that the Department of Transportation is using minority individuals instead of minority businesses to meet those goals. There was no indication that the Department of Transportation acted inappropriately in its attempts to gain a contract in this case, or that it generally has participated in a process which the Petitioner refers to dualism in preferring minority persons who are not licensed by the Department of Professional Regulation to engage in the construction business over those who are. Moreover, Section 489.103(1), Florida Statutes, states that the license provisions of Florida law, do not pertain to contractors who are working on bridges, roads, streets and highways and services incidental to that work. Comments about training and apprenticeship found within the Memorandum were not proven in the course of the hearing and are not sufficiently relevant to the inquiry at hand; that they need be considered in resolving this dispute. The suggestion that the Department of Transportation intends to put the contract back out for award in some arrangement other than a "set-aside" is correct in the sense of the intentions expressed in the ad of October 25, 1988; however, that advertisement was not carried forward and the oral indication was made by an official of the Department of Transportation at hearing, that the contract would remain "set- aside" if the Department were allowed to readvertise at some point beyond the outcome of this hearing. Finally, the suggestion that if the second bidder in this case had been a non-black company or individual, the Department would have awarded the project to that entity was not borne out in the proof. Respondent's facts are subordinate to the facts found. COPIES FURNISHED: James D. Alford, III 1348 Davis Street Jacksonville, Florida 32209 Marilyn McFadden, Esquire Department of Transportation 605 Suwannee Street, M.S.-58 Tallahassee, Florida 32399-0458 Kaye N. Henderson, Secretary Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0450 Thomas H. Bateman, III General Counsel Department of Transportation 562 Suwannee Street Tallahassee, Florida 32399-0450
Findings Of Fact On or about June 3, 1987, DOT advertised that it would receive bids on State Project No. 97870-334, etc. in Dade, Broward and Palm Beach Counties to improve portions of the Florida Turnpike. On June 24, 1987, bids were received by DOT from Gilbert, State Paving and Archer Western Contractors. The apparent low bidder at bid opening on June 24, 1987, was Gilbert and State Paving was apparent second low bidder. DOT was informally advised by John Beck, an attorney representing State Paving, that Gilbert's bid was believed to be unbalanced and the appropriate officials referred the issue to the DOT Bureau of Estimates to look into the low bid to see if it was unbalanced to the detriment of the State. Review of the Gilbert bid began with an internal analysis of the bid prices in comparison to the DOT Estimate of the Work. All bid prices above or below a certain percent of the engineer's estimate of costs were prepared in a computer printout and those items were checked by the consultants on the project. Basically, the major items in the project, which comprises some 400 bid items, were broken down to 10 groupings and the bids for each item in these groups was prepared for the three bidders and tabulated in Exhibit 2. The DOT Technical Committee reviewed the bids and concluded there was no unbalancing in Gilbert's bid which was detrimental to the State. This recommendation was approved by the Awards Committee which had also been furnished the information in Exhibit 2 by the consulting engineer for the project. Based upon this information, the Awards Committee concluded that the awards should go to Gilbert as no unbalancing detrimental to the State was found. Specification made a part of all DOT bid proposals provide that DOT may reject an unbalanced bid. As a matter of policy, DOT only rejects unbalanced bids deemed contrary to the interests of the State. Bids may be unbalanced in numerous ways. One significant method is known as front loading where the bidder submits a high bid for the work to be done at the beginning of the project such as clearing and grubbing and low bids for the work done later in the project. If successful in getting the award, this bidder would have excess profits on the clearing and grubbing which could draw interest while the less profitable later work was being done. Another variant is to study the plans and specifications to see if the quantities listed in the bid proposal are accurately reflected in the plans and specifications. If not, those items for which the bid proposal shows more than the plans and specifications reasonably required can be bid low, and for those items by which the bid proposal shows less than actually will be required can be bid high. Since the contractor is paid by the units used, those excess units at a higher price would result in more profit for the contractor yet allow him to submit an overall lower bid. For example, if the bid proposal contains two similar items for which the request for proposal estimates 100 each will be required, and the bidder concludes that only 50 will be required at Site A and 150 at Site B, he submits a low bid for Site A and a high bid for Site B. If the fair price for these units is $10 each, and the bidder bids $5 per unit for Site A or $500, and $15 for Site B or $1500, the total bid price is $2000, but if the bidder only installs 50 at Site A he would be paid $250 and install $150 at Site B for which he would be paid $2250. His total compensation would be $2500. In competitively bid contracts, such as the instant project, contractors modify their prices by taking a calculated risk that certain items bid on will not need to be accomplished and submit a nominal bid of $1 or 1 cent for such an item. By definition, such a bid is unbalanced, but if the item so bid has to be provided, the contractor has to provide this service at the bid price. The only evidence submitted by Petitioner tending to show Gilbert's bid was unbalanced to the detriment of the State was testimony, objected to and sustained, that the plans and specifications showed more of certain units would be needed than the estimated quantities on the bid proposal, which constituted the basis for the bids submitted. Such evidence constitutes a challenge to the bid specifications and is untimely. Gilbert's witness who prepared the bid submitted by Gilbert adequately explained the basis for bids submitted by Gilbert on the challenged items. The document entitled "This is Not an Addendum," clearly states on its face that "an addendum may follow containing the following information." No bids are solicited thereby and for no item contained thereon is the State obligated to contract. This document was provided all bidders before bids were open and no unfair advantage to anyone or detriment to the State was shown. In a project containing some 400 bid items, many modifications of the contract during construction is required to cover unforeseen circumstances that arise. While it would be better to get competitive bids on every bit of work done on this project, in this imperfect world unforeseen items will appear. The document complained of attempts to alert the bidders to some anticipated work not foreseen when the bid proposal was prepared, but it is not a part of the bid solicitation.
The Issue The issue in this case is whether Respondent should award a contract to Intervenor to provide physical and occupational therapy services to approximately 1,300 exceptional education students who qualify for such services in 77 public schools in Brevard County, Florida.
Findings Of Fact Intervenor is the incumbent contractor for physical and occupational therapy services provided to Respondent. Intervenor has provided such services to Respondent for approximately six years. On February 24, 1999, Respondent issued its request for proposals ("RFP") for occupational and physical therapy services. The RFP consists of eight unnumbered pages. Ten companies responded to the RFP. However, only the proposals of Petitioner and Intervenor are at issue in this proceeding. A four-member evaluation committee ranked each proposal on the basis of six categories. The six categories were: experience; qualification; recruiting ability; location of office; and responsiveness. The evaluation committee also considered the hourly rate and mileage to be charged by each proposer. The evaluation committee met as a body. Each member of the committee then returned to his or her respective office to complete a scoring sheet. The scoring sheet listed each proposer's name in a column down the left side of the sheet and the six categories for evaluation from left to right across the top of the sheet. A column down the right side of each sheet listed the hourly rate to be charged by the proposer identified in the column down the left side of the sheet. The RFP does not prescribe a scoring formula to be used in completing the scoring sheets. In relevant part, the RFP merely states: . . . The Selection Committee shall rank the firms in order of preference and will submit its recommendation to the Superintendent for his consideration. The [Board] will bear responsibility for the selection of the Contractor and will decide which bid [sic] is most appropriate for Brevard schools and their students. The Superintendent will recommend a therapy service provider which will be presented to the . . . Board for approval at a regular or special Board meeting. RFP at unnumbered page 8. All four members of the evaluation committee ranked Intervenor's proposal first and Petitioner's proposal second. However, the hourly rate in Petitioner's proposal was the lowest of all proposers, at $34.75, and $4.25 less than the $39 hourly rate quoted in the proposal submitted by Intervenor. The proposal submitted by Intervenor charged mileage in addition to the hourly rate while the hourly rate quoted by Petitioner included mileage. Before May 11, 1999, when the Board selected Intervenor as the proposer, the evaluation committee met. The committee asked Respondent's buyer assigned to the contract if the committee was required to recommend the proposal with the lowest price. The buyer advised the committee that the contract was for professional services and did not require the committee to recommend the lowest-priced proposal. The committee determined that Ms. Eva Lewis, one of its members and the Director of Program Support for Exceptional Student Education in Brevard County, should telephone Intervenor and ask if Intervenor would match Petitioner's price. Ms. Lewis telephoned Mr. Rick McCrary, the manager for Intervenor, and asked if Intervenor would accept the contract price of $34.75. After consultation with his superiors, Mr. McCrary agreed to the straight-rate price of $34.75. On May 11, 1999, Ms. Lewis presented the recommendation of the evaluation committee to the Board. The Board asked Ms. Lewis if Intervenor's price was the lowest price. Ms. Lewis disclosed that the evaluation committee preferred the proposal submitted by Intervenor, asked Intervenor to lower its price to meet that of Petitioner, and that Intervenor agreed to do so. The Board voted unanimously to select Intervenor as the proposer to be awarded the contract. The parties directed most of their efforts in this proceeding to the issues of whether competitive bidding requirements apply to the proposed agency action and whether the scoring formula used to rank the proposers complied with those requirements. Petitioner asserts that the selection of Intervenor by the Board violates the competitive bidding provisions in Section 120.57(3), Florida Statutes (1997). (All chapter and section references are to Florida Statutes (1997) unless otherwise stated). Intervenor and Respondent contend that Section 120.57(1), rather than Section 120.57(3), controls the Board's selection of Intervenor for the contract. Although the document used by Respondent to obtain proposals from vendors describes itself as an RFP and describes the responses as either proposals or bids, Respondent and Intervenor suggest that the document is not an RFP but merely a "solicitation." Respondent and Intervenor further argue: . . . that the . . . Board . . . did not attempt to comply with the requirements for competitive procurement under Section 120.57(3) or Chapter 287. . . . And . . . that the . . . Board was never required to comply with those statutes. . . . these are contracts for professional, educational and health services, contracts uniquely and specifically exempted from [the] competitive bid procurement process. Transcript ("TR") at 40. It is not necessary to reach the issue of whether Section 120.57(1) or the competitive procurement provisions in Section 120.57(3) and Chapter 287 control Respondent's selection of Intervenor as the proposer to be awarded the contract. In either event, the proposed agency action is contrary to the specifications in the RFP. Assuming arguendo that Section 120.57(3) and Chapter 287 do not apply to the contract at issue in this proceeding, Respondent failed to comply with RFP specifications. As Intervenor and Respondent point out in their joint PRO, Section F.8. of the RFP states: The . . . Board . . . and the selected proposer will negotiate a contract as to terms and conditions for submission to the . . . Board for consideration and approval. In the event an agreement cannot be reached with the selected proposer in a timely manner, then the . . . Board reserves the right to select an alternative proposer. (emphasis supplied) Intervenor and Respondent are also correct that the phrase "negotiate a contract as to terms and conditions" includes terms and conditions such as the contract price. Contrary to the provisions of Section F.8., the Board did not first select a proposer at its meeting on May 11, 1999, and then negotiate a contract price with the selected proposer. Rather, the evaluation committee negotiated a contract price with Intervenor before May 11, 1999, and the Board then selected Intervenor as the successful proposer. The evaluation committee is not the Board and does not have authority to act on behalf of the Board. As the RFP states, the evaluation committee has authority only to: . . . rank the firms in order of preference and . . . submit its recommendation to the Superintendent for his consideration. The [Board] will bear responsibility for the selection of the Contractor and will decide which bid [sic] is most appropriate for Brevard schools and their students. The Superintendent will recommend a therapy service provider which will be presented to the . . . Board for approval at a regular or special Board meeting. RFP at unnumbered page 8. The last sentence in Section F.8. makes clear that the right to select a proposer is the sole province of the Board and not the evaluation committee. Even if one were to ignore the legal distinctions between the evaluation committee and the Board and the authority of each, the RFP specifications fail to provide adequate notice to potential proposers of the true purpose for the RFP. As Respondent and Intervenor state in their joint PRO: . . . the . . . Board used the proposals it received to test the market for physical and occupational therapy services in Brevard County. The . . . Board then used the information it developed from the proposals as negotiating leverage to obtain a price concession from its incumbent contractor. The . . . Board's negotiation tactics permitted it to secure the superior vendor at the price of an inferior vendor. PRO at 33. The RFP fails to disclose that Respondent intended to use potential proposers to obtain negotiating leverage with the incumbent contractor. The failure of the RFP to disclose its purpose violates fundamental principles of due process, adequate notice, and fairness to potential proposers. It creates a gap between what agency staff knew of the Respondent's intent for the RFP and what potential proposers could know from reading the specifications in the RFP. The failure of the RFP to disclose its true purpose suggests that its authors recognized the chilling effect such a disclosure would have had on the response of potential proposers. The lack of responses from potential proposers, in turn, would have frustrated Respondent's intent to "secure the superior vendor at the price of an inferior vendor." Assuming arguendo that Section 120.57(3) controls the contract award at issue in this proceeding, Respondent's proposed agency action violates relevant provisions in Section 120.57(3)(f). In relevant part, Section 120.57(3)(f) provides: In a competitive procurement contest, other than a rejection of all bids, the Administrative Law Judge shall conduct a de novo proceeding to determine whether the agency’s proposed action is contrary to the agency’s governing statutes, the agency’s rules, or policies, or the bid or proposal specifications. The standard of proof for such proceedings shall be whether the proposed agency action was clearly erroneous, contrary to competition, or arbitrary, or capricious. . . . (emphasis supplied) As previously found, the proposed award of the contract to Intervenor is contrary to the RFP specifications, including specifications for the evaluation and selection process described in paragraphs 7 and 17, supra. The proposed agency action is clearly erroneous within the meaning of Section 120.57(3)(f). It violates fundamental notions of due process, adequate notice, and a level playing field for all proposers. All of the proposers who were induced by the terms of the RFP to expend the time, energy, and expense required to prepare and submit proposals were entitled to rely in good faith on the specifications in the RFP and to require Respondent to adhere to its own specifications. The proposed agency action is also contrary to competition within the meaning of Section 120.57(3)(f). The economic incentive to respond to an RFP would likely diminish over time if the proposed agency action were to persist. Potential proposers would eventually recognize the RFP process as a device intended to reduce the contract price of the incumbent provider rather than as a bona fide business opportunity for potential proposers to gain new market share. Such an economic environment would not likely induce potential proposers to incur the time and expense necessary to prepare and submit proposals. The pool of potential proposers would shrink, and Respondent would lose negotiating leverage with the incumbent vendor. The likely result would be an erosion of negotiating leverage and an accretion in costs.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a Final Order finding that the selection of Intervenor for the contract award is contrary to the RFP specifications and contrary to competition. DONE AND ENTERED this 3rd day of September, 1999, in Tallahassee, Leon County, Florida. DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 3rd day of September, 1999. COPIES FURNISHED: Dr. David Sawyer, Superintendent Brevard County School Board 2700 Judge Fran Jamieson Way Viera, Florida 32940-6699 Harold Bistline, Esquire Stromire, Bistline, Miniclier, Miniclier and Griffith 1970 Michigan Avenue, Building E Cocoa, Florida 32922 Jonathan Sjostram, Esquire Steel Hector and Davis, LLP 215 South Monroe Street, Suite 601 Tallahassee, Florida 32301 Edward J. Kinberg, Esquire Edward J. Kinberg, P.A. 2101 South Waverly Place Suite 200E Melbourne, Florida 32901
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following Findings of Fact are made: In March of 1993, the Department issued an Advertisement for Bids (hereinafter referred to as the "Advertisement") through which it solicited the submission of bids on a construction project (Department Project No. NV-30A, which is hereinafter referred to as the "Project") involving the expansion of the water treatment facility at the Martin Correctional Institution. The Advertisement, along with the other bid documents issued in conjunction with the Advertisement, including, but not limited to, the Instructions to Bidders (hereinafter referred to as the "Instructions") and the Proposal Form, were compiled in a two-volume Specifications Manual (hereinafter referred to as the "Manual") that was made available for public inspection. Section B of the Manual's first volume contained the Instructions. Section B-2 2.A.(11) thereof provided that "Section 01420 as contained in the Technical Specifications must be submitted and the qualifications listed therein must be satisfactory to the Owner and the Engineer. " "Section 01420 as contained in the Technical Specifications" was a "Bidder's Qualification Form, Reverse Osmosis Treatment System Component" (hereinafter referred to as the "R.O. Form"), on which the bidder was to provide "R.O. [Reverse Osmosis] System Supplier" information. The R.O. Form repeated the directive that the bidder was to "[r]eturn [the] [c]ompleted [R.O.] Form [w]ith [its] proposal." Section B-14 of the Instructions addressed the subject of "preparation and submission of bids" and provided, in pertinent part, as follows: Each Bidder shall copy the proposal form on his own letterhead, indicate his bid prices thereon in proper spaces, for the Base Bid and for alternates on which he bids. . . . Proposals containing . . . . items not called for or irregularities of any kind may be rejected by the Owner. Section B-16 of the Instructions addressed the subject of "disqualification of bidders" and provided, in pertinent part, as follows: More than one bid from an individual, firm, partnership, corporation or association under the same or different names will not be considered. Reasonable grounds for believing that a Bidder is interested in more than one proposal for the same work will cause the rejection of all proposals in which such Bidders are believed to be interested. The subject of "contract award" was addressed in Section B-21 of the Instructions, which provided, in pertinent part, as follows: . . . The recommendation for contract award will be for the bidder qualified in accordance with Section B-2 and submitting the lowest bid provided his bid is responsible and it is in the best interest of the Owner to accept it. The qualified bidder submitting the lowest bid will be that bidder who has submitted the lowest price for the base bid, or the base bid plus additive alternates or less deductive alternates, taken in the numerical order listed in the bid documents in an amount to be determined by the Owner. The Order of the alternates may be accepted by the Owner in any sequence so long as such acceptance does not alter the designation of the low bidder. The Owner reserves the right to waive any informality in bids received when such waiver is in the interest of the Owner. Section C of Volume I of the Manual contained the Proposal Form that all bidders were required to use to indicate their bid prices. The following statement appeared at the bottom of the second page of the Proposal Form: There is enclosed: A certified check, cashier's check, treasurer's check, bank draft or Bid Bond in the amount of not less than five (5) percent of the Base Bid payable to the Department of Corrections, as a guarantee. An executed Trench Excavation Safety Certification, Section F-13. An executed Experience Questionnaire and Contractor's Financial Statement and Public Entity Criminal Conviction Form, Section L. An executed Bidder's Qualifications Form (Reverse Osmosis), Technical Specification Section 01420. While one completed R.O. Form had to accompany each bid, there was no provision in any of the bid documents issued by the Department requiring a bidder to submit only one such completed form and no more. Petitioner, McMahan and R.J. Sullivan Corporation (hereinafter referred to as "Sullivan") were among the contractors that timely submitted bids in response to the Advertisement. McMahan's and Sullivan's bids were each accompanied by more than one completed R.O. Form. Petitioner, on the other hand, provided the Department with only one completed R.O. Form along with its bid. Of the bids submitted, McMahan's was the lowest, Sullivan's was the second lowest and Petitioner's was the third lowest. McMahan's base bid price was $857,000.00. Petitioner's was $905,000.00. McMahan's total price, including the nine additive alternates accepted by the Department, was $948,000.00. Petitioner's was $1,032,600.00, $84,600.00 more than McMahan's. By letter dated July 1, 1993, the Department advised McMahan of its intent "to award the contract [for Department Project No. NV-30A] to [McMahan] as the lowest responsive bidder." On July 9, 1993, Petitioner filed a formal written protest of the preliminary determination to award the contract to McMahan alleging that McMahan was not a responsive bidder inasmuch as McMahan "submitted Reverse Osmosis ("R.O.") Qualifications Forms for more tha[n] one vendor." According to Petitioner, "[t]his [was] not in conformance with the Bid Documents and gave [McMahan] an unfair advantage."
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Corrections enter a final order finding Petitioner's bid protest to be without merit and awarding McMahan, as the lowest responsive and qualified bidder, the contract for Department Project No. NV-30A. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of September, 1993. STUART M. LERNER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of September, 1993.
Findings Of Fact At some time prior to August 2, 1984, DOT issued bid blanks for a mini- contract for State Project No: 76020-3515, for work consisting of cleaning and guniting a concrete box culvert located on State Road 19, in Putnam County, Florida, approximately one mile south of the Cross Florida Barge Canal. The bid package, signed by C. A. Benedict, District Engineer, for the DOT, specifically reserved the right to reject any and all bids. The bid package broke the work down into three item numbers. The first was mobilization and called for one pricing unit. The second item called for maintenance of traffic at the work site and called for one pricing unit as well. The third area called for restoration of spalled areas (gunite) and called for approximately 437 cubic feet to be priced. In this regard, the plans furnished with the bid package and the bid package itself, in at least three separate locations, called for the bid as to the last item to be priced and paid for on a unit price basis. Petitioner submitted the lowest bid of seven bidders. It was determined to be faulty, however, in that though it properly priced the first two items, it failed to submit a unit price for the third item per unit, submitting instead a total price for the third item based on the entire cubic footage. Petitioner's bid indicated 437 cubic feet priced at a total of $17,832.00. Simple arithmetic permits a division which results in a unit price for each of the 437 cubic feet of $40,805. This last unit price, however, is not reflected on the bid submitted by Petitioner. Petitioner's bid is the only bid of the seven submitted which did not contain a unit price for each of the units in the third item. EDS has been in business since 1980. It performed one previous contract for DOT and is familiar with DOT's rules regarding bidding. It had ample opportunity to examine the plans and the bid blank before submitting its bid and admits that the unit price, though required, was omitted. Petitioner contends, however, that the omission is not a material variance and can be waived by Respondent. Respondent contends, on the other hand, that the failure to list the unit price in the third item is material. This determination is based on the fact that since the bid package calls for payment on a unit basis, the odd one- half cent per unit does not permit even money payment and requires rounding off. Even with this being true, the maximum difference would be one- half cent to be rounded off either upwards or downwards. At some point after opening, at least one of the unsuccessful bidders found out that Petitioner's bid failed to technically conform to the terms of the bid blank and at this point the second lowest bidder, Vann's Sandblasting, whose bid was $4,000.00 higher than that of Petitioner, and who had done several contracts for Respondent in the past, indicated that if petitioner's bid were not rejected, he would file a protest. The one-half cent variance, itself, is not material. Considering all factors, however, the failure to state the unit price may, under certain circumstances, be.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is, therefore: RECOMMENDED THAT Petitioner, EXPLOSIVE AND DIVING SERVICES, INC., be awarded the contract for State project No 76020-3515. RECOMMENDED this 27th day of February, 1985, at Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 FILED with the Clerk of the Division of Administrative Hearings this 27th day of February, 1985. COPIES FURNISHED: Gail S. Wood, President Explosive and Diving Services, Inc. Post Office Box 200 Clarksville, Florida 32430 Larry D. Scott, Esquire Department of Transportation Haydon Burns Building, MS-58 Tallahassee, Florida 32301 Paul Pappas, Secretary Department of Transportation Haydon Burns Building, MS-58 Tallahassee, Florida 32301
The Issue The issues in these consolidated cases are: (1) whether the decision by Respondent, Department of Transportation, to reject all bids for the contract at issue was illegal, arbitrary, dishonest, or fraudulent; and (2) if so, whether Respondent's actions in cancelling the notice of intent to award the contract at issue to Cyriacks Environmental Consulting Services, Inc., ("CECOS") and requiring the submittal of new price proposals were clearly erroneous, contrary to competition, arbitrary, or capricious.2/
Findings Of Fact The Parties Respondent is the state agency that issued the RFP to procure the Contract for Respondent's District IV. CECOS is an environmental consulting and services firm that submitted a response to the RFP, seeking award of the Contract. DB is an environmental consulting and services firm that submitted a response to the RFP, seeking award of the Contract. DB was granted party status to DOAH Case No. 16-0769 by Order dated February 29, 2016, and by Order dated March 9, 2016, was determined to have standing in that case as a party whose substantial interests were affected by Respondent's decision to reject all proposals. Overview of the Procurement Process for the Contract Respondent issued the RFP on or about October 1, 2015. The RFP sought to obtain support services related to environmental impacts review for projects in Respondent's District IV work program; wetland mitigation design; construction, monitoring, and maintenance; permitting of mitigation sites; exotic vegetation control and removal in specified locations; relocation of threatened, endangered, or rare flora and fauna; permit compliance monitoring; and other services specified in the RFP. The RFP stated Respondent's intent to award the Contract to the responsive and responsible proposing vendor6/ whose proposal is determined to be most advantageous to Respondent. The responses to the RFP were scored on two components: a technical proposal, worth a total of 60 points, that addressed the proposing vendor's experience, qualifications, and capabilities to provide high-quality desired services; and a price proposal, worth a total of 40 points, that addressed the proposed price without evaluation of the separate cost components and proposed profit of the proposing vendor, compared with that proposed by other vendors. The price proposal evaluation was based on the following formula: (Low Price/Proposer's Price) X Price Points = Proposer's Awarded Points. The Special Conditions section of the Advertisement portion of the RFP, paragraph 3, stated in pertinent part: In accordance with section 287.057(23), Florida Statutes, respondents to this solicitation or persons acting on their behalf may not contact, between the release of the solicitation and the end of the 72- hour period following the agency posting the notice of intended award, . . . any employee or officer of the executive or legislative branch concerning any aspect of this solicitation, except in writing to the procurement officer or as provided in the solicitation documents. Violation of this provision may be grounds for rejecting a response. The period between the release of the solicitation and the 72-hour period after posting of the intended award is commonly referred to as the "cone of silence." The Special Conditions section of the Advertisement portion of the RFP, paragraph 19, informed vendors that Respondent reserved the right to reject any or all proposals it received. Exhibit B to the RFP, addressing compensation, limited compensation for all authorizations for work performed under the Contract to a total of $5,000,000. Exhibit B stated that the schedule of rates listed in the Price Proposal Form C (i.e., the rates submitted for the sections comprising Exhibit C to the RFP) would be used for establishing compensation. On October 7, 2015, Respondent issued Addendum 1 to the advertised RFP. Addendum 1 revised Exhibit A to the RFP, the Scope of Services; and also revised Exhibit C to the RFP, the Bid Sheet, to provide it in Excel format. As revised by Addendum 1, Exhibit C consists of an Excel spreadsheet comprised of six sections, each of which was to be used by the responding vendors to propose their rates for the specified services being procured in each section of the Bid Sheet. Section 6 of the Excel spreadsheet, titled "Trees, Schrubs [sic], and Ground Cover, consists of eight columns and 258 rows, each row constituting a plant item on which a price proposal was to be submitted. The columns are titled, from left to right: No.; Scientific Name; Common Name; Unit; Estimated of [sic] number of Unites [sic]; Rate; Extension (Unit X Rate); and Multiplier 2.5 (Price X 2.5). Each row of the spreadsheet in Section 6 identified, as a fixed requirement for this portion of the proposal, the specified type of plant, unit (i.e., plant size), and estimated number of units (i.e., number of plants). For each row of the Section 6 spreadsheet, only the cells under the "Rate" column could be manipulated. Vendors were to insert in the "Rate" cell, for each row, the proposed rate for each plant item. The cells under all other columns for each row were locked, and the RFP stated that any alteration of the locked cells would disqualify the vendor and render its proposal non-responsive. The instructions to Exhibit C, Section 67/ stated: Trees, Schrubs [sic], and Ground Cover Price of plants shall include project management, field supervision, invoicing, installation, mobilization of traffic, water throughout the warranty period, fertilizer and [sic] six (6) month and demobilization, minor maintenance guarantee. Installation of plant material shall be per the Scope of Services. All planting costs shall include the cost to restore area to pre-existing conditions (i.e., dirt, sod, etc.). On October 20, 2015, Respondent issued Addendum 2, and on October 29, 2015, Respondent issued Addendum 3. Both addenda changed Respondent's schedule for reading the technical proposal scores, opening the sealed price proposals, and posting the intended awards. Addenda 1, 2, and 3 were not challenged. However, a key dispute in these consolidated proceedings is whether the Addendum 1 Bid Sheet in Section 6 and the instructions for completing that Bid Sheet were ambiguous, or whether Respondent reasonably believed them to be ambiguous. The vendors were to submit their responses to the RFP, consisting of their technical proposals and price proposals, by October 16, 2015. CECOS, DB, and four other vendors timely submitted responses to the RFP. On November 2, 2015, the scores for the technical proposals submitted by the vendors were presented to the Selection Committee ("SC") at a noticed meeting. DB received the highest number of points on the technical proposal portion of the RFP. The SC met again on November 3, 2015. At that time, Respondent's Procurement Officer, Jessica Rubio, read the total awarded points for each vendor's price proposal, as well as each vendor's total combined points——i.e., total points for technical proposal and price proposal. CECOS received the highest number of points for the price proposal portion of the RFP, and also received the highest total combined points. Respondent recommended, and the SC concurred, that Respondent should award the Contract to CECOS. At 10:00 a.m. on November 3, 2015, Respondent posted the Proposal Tabulation, constituting its notice of intent that CECOS would be awarded the Contract.8/ CECOS submitted a price proposal of $4,237,603.70. DB submitted a price proposal of $9,083,042.50. The other four vendors' price proposals ranged between $4,540,512.90 and $5,237,598.55. The "cone of silence" commenced upon Respondent's posting of the Proposal Tabulation, and ended 72 hours later, on November 6, 2015, at 10:00 a.m. As discussed in greater detail below, after the Proposal Tabulation was posted, Respondent discovered an apparent ambiguity in Exhibit C, Section 6, regarding the instructions to that section and the inclusion of the "2.5 Multiplier" column on the Bid Sheet. After an internal investigation, Respondent decided to cancel its intent to award the Contract to CECOS. On November 5, 2015, Respondent posted a notice that it was cancelling the intent to award the Contract to CECOS. On November 5, 2015, DB filed a Notice of Protest, stating its intent to challenge the award of the Contract to CECOS. Thereafter, on November 9, 2015, DB contacted Respondent by electronic mail ("email") to withdraw its Notice of Protest.9/ Due to the apparent ambiguity in Exhibit C, Section 6, on November 9, 2015, Respondent issued Addendum 4 to the RFP. Addendum 4 required the responding vendors to submit new price proposals for all sections (i.e., sections 1 through 6) of Exhibit C to the RFP. Addendum 4 also established a new timeline for a mandatory pre-bid conference to be held on November 12, 2016; set a sealed price proposal due date of November 19, 2016; and identified new dates for opening the price proposals and posting the Notice of Intended Award of the Contract. On November 12, 2015, Respondent conducted a mandatory pre-bid conference to address Addendum 4. The participating vendors expressed confusion and posed numerous questions regarding the submittal of new price proposals and their technical proposals. Immediately following the pre-bid conference, Respondent issued Addendum 5, which consisted of a revised Exhibit A, Scope of Services; revised Exhibit C, Bid Sheet in Excel format for all six sections; and responses to the questions posed at the pre-bid conference.10/ The Addendum 5 Bid Sheet comprising Exhibit C, Section 6, was substantially amended from the version that was published in Addendum 1. Specifically, the column previously titled "Rate" was changed to "Rate Per Unit"; the "Extension (Unit X Rate)" and "Multiplier 2.5" columns were deleted; and a new column titled "Proposed Cost (Rate per Unit X Est. No. of Units)" was added. Additionally, the instructions for Section 6 were substantially amended to read: "'Rate Per Unit' must include all costs associated with the purchase, installation, watering, fertilization, project management, field supervision, travel, invoicing, labor, maintenance of traffic, mobilization and demobilization, staking and guying, maintenance of planting site throughout the 180[-]day plant warranty." These amendments were intended to clarify that the proposed rate for each plant unit was to include all overhead costs associated with performance of the Contract with respect to that particular unit. On November 13, 2015, CECOS filed a Notice of Protest to Respondent's issuance of Addendum 4, requiring the vendors to submit new price proposals. Thereafter, on November 23, 2015, CECOS filed the First Petition challenging Respondent's decision, announced in Addendum 4, to require the responding vendors to submit new proposals for the price proposal portion of the RFP, and its decision to cancel the notice of intent to award the Contract to CECOS.11/ Once CECOS filed its Notice of Protest on November 13, 2015, Respondent ceased all procurement activity directed toward awarding the Contract. On December 17, 2015, Respondent posted notice that it was rejecting all proposals and that the Contract would be re- advertised through issuance of a new RFP. On December 22, 2015, CECOS filed a Notice of Protest, and on January 4, 2016, filed its Second Petition challenging Respondent's decision to reject all proposals and re-advertise the Contract. Bases for Respondent's Actions Shortly after Respondent posted the Proposal Tabulation noticing its intent to award the Contract to CECOS, Christine Perretta, owner and president of DB, sent an email to Respondent, then called Rubio to inquire about Respondent's decision to award the Contract to CECOS. The evidence shows that these contacts occurred sometime on or around November 3, 2016.12/ In her telephone discussion with Rubio, Perretta inquired about how to file a notice of protest13/ and also asked whether Respondent had reviewed the vendors' price proposals for correctness or accuracy, or had simply chosen the lowest price proposal. In the course of the discussion, Perretta informed Rubio that DB had submitted a "loaded" rate for each plant unit ——meaning that DB's rate proposed for each plant item in the "Rate" column on the Section 6 Bid Sheet consisted not only of the cost of the plant item, but also the cost for all associated overhead services listed in the instructions to Section 6 and in the RFP Advertisement, paragraph 18(v), plus compensation.14/ Rubio could not clearly recall whether, in the course of their discussion, Perretta had inquired about the use of the 2.5 multiplier, and there is conflicting evidence as to whether Perretta related her view that CECOS may not be able to perform the Contract based on the price proposal it had submitted. In any event, as a result of Rubio's discussion with Perretta, Rubio determined that she needed to review Exhibit C, Section 6. In the course of her investigation, Rubio called Wendy Cyriaks, owner and president of CECOS.15/ Cyriaks confirmed that CECOS had submitted an "unloaded" rate for each plant item—— meaning that it had included only the cost of each plant item in the "Rate" column on the Section 6 Bid Sheet, and had not included, in the proposed rate for each plant item, the cost of the associated overhead services listed in the instructions to Section 6 or RFP Advertisement, paragraph 18(v), or compensation. Cyriaks told Rubio that CECOS expected that its overhead costs and compensation for each item would be covered through use of the 2.5 multiplier. Also in the course of her investigation, Rubio asked Bogardus whether he had intended the 2.5 multiplier to be used to cover all costs, including vendor compensation, associated with obtaining, installing, and maintaining the plant items listed in Section 6. Bogardus initially confirmed that his intent in including the 2.5 multiplier on the Section 6 Bid Sheet was to cover all of the overhead costs and compensation. However, the persuasive evidence establishes that Bogardus subsequently agreed with Rubio that the 2.5 multiplier should not have been included in Section 6. Pursuant to her discussions with Perretta and Cyriaks, Rubio realized that the wide discrepancy between DB's and CECOS' price proposals was due to their differing interpretations of the instructions in Section 6 regarding plant item rates and the inclusion of the "2.5 Multiplier" column in the Section 6 Bid Sheet. Rubio testified, persuasively, that the inclusion of the "2.5 Multiplier" column rendered Exhibit C, Section 6, of the RFP ambiguous. To that point, the RFP does not contain any instructions or discussion on the use of the 2.5 multiplier. Therefore, to the extent the multiplier was intended to be used by the vendors to build overhead costs and compensation into their price proposals, the RFP fails to explain that extremely important intended use——leaving the significance and use of the multiplier open to speculation and subject to assumption by the vendors in preparing their price proposals. Rubio reasonably viewed DB's and CECOS' divergent interpretations of the instructions and the inconsistent use of the 2.5 multiplier as further indication that Section 6 was ambiguous. She explained that in order for Respondent to ensure that it is procuring the most advantageous proposal for the State, it is vitally important that the RFP be clear so that responding vendors clearly understand the type of information the RFP is requesting, and where and how to provide that information in their price proposals. Rubio persuasively testified that in her view, the instructions in Section 6 had, in fact, called for a loaded rate, but that CECOS had erroneously assumed, based on the inclusion of the "2.5 Multiplier" column in the Section 6 Bid Sheet, that overhead and compensation for each plant item would be covered through use of the 2.5 multiplier, and that as a consequence, CECOS incorrectly proposed unloaded rates for the plant items. In Rubio's view, CECOS' error was due to the ambiguity created by the unexplained and unsupported inclusion of the 2.5 multiplier in Section 6. Rubio testified that CECOS had been awarded the Contract because it had submitted the lowest price proposal, but that its proposal was based on an unloaded rate for the plant items, contrary to the instructions for Section 6. In Rubio's view, CECOS' price proposal was unresponsive, and CECOS should not have been awarded the Contract. Rubio also testified, credibly and persuasively, that the use of the 2.5 multiplier in Section 6 for compensation purposes rendered the RFP arbitrary. Respondent's District IV historically has not used a 2.5 multiplier for compensation purposes for commodities contracts, and no data or analyses exist to support such use of a 2.5 multiplier.16/ This rendered the RFP both arbitrary and unverifiable with respect to whether it was structured to obtain the most advantageous proposal for the State. To this point, Rubio credibly explained that Respondent's existing environmental mitigation services contract with Stantec was procured through the "Invitation to Negotiate" ("ITN") process. In that procurement, Respondent negotiated to obtain the best value for the State. The ITN bid sheet contained a 2.5 multiplier that was used only for weighting purposes to evaluate and determine which firms would be "short- listed" for purposes of being invited to negotiate with Respondent for award of the contract. Importantly——and in contrast to the RFP at issue in this case——the multiplier in the ITN was not used to determine the final prices, including compensation, to install trees, shrubs, and ground cover under that contract. Rubio also testified, credibly, that the Bid Sheet was structurally flawed because it did not allow the vendor to clearly indicate the "unit price" inclusive of all overhead costs, and that this defect would result in Respondent being unable to issue letters of authorization to pay invoices for the cost of installing the plant items or compensating for work performed. For these reasons, Respondent determined that it needed to cancel the intent to award the Contract to CECOS. As noted above, Respondent posted the cancellation of the intent to award the Contract on November 5, 2015. At a meeting of the SC conducted on November 9, 2015, Respondent's procurement staff explained that the intent to award the Contract had been cancelled due to ambiguity in the instructions and the Bid Sheet for Exhibit C, Section 6. Ultimately, the SC concurred with Respondent's cancellation of the intent to award the Contract to CECOS and agreed that the vendors should be required to submit new price proposals. Thereafter, on November 9, 2015, Respondent issued Addendum 4, announcing its decision to solicit new price proposals from the responding vendors. Respondent conducted a pre-bid meeting with the vendors on November 12, 2015, and immediately thereafter, issued Addendum 5, consisting of a revised Scope of Services and a substantially revised Bid Sheet for all six sections of Exhibit C. As previously discussed, the Section 6 Bid Sheet issued in Addendum 5 was revised to, among other things, delete the "2.5 Multiplier" column and the column previously titled "Rate" was changed to "Rate Per Unit." Also as discussed above, the instructions to Section 6 were revised to clarify that the "Rate Per Unit" provided for each plant unit must contain all costs associated with the purchase, installation, watering, fertilization, project management, field supervision, invoicing, labor, maintenance of traffic, and other costs specified in the instructions——i.e, constitute a loaded rate. All of these changes were made in an effort to clarify, for the benefit of all vendors, the specific information that Respondent needed to be provided in the price proposals. Rubio testified, credibly, that in requiring the vendors to submit new price proposals pursuant to revised Exhibit C, Respondent did not give, or intend to give, any vendor a competitive advantage over any of the other vendors, nor did Respondent place, or intend to place, CECOS at a competitive disadvantage by requiring the vendors to submit new price proposals pursuant to revised Exhibit C. As noted above, once CECOS filed its Notice of Protest, Respondent ceased all procurement activity directed toward awarding the Contract. Consequently, the vendors did not submit new price proposals and the scheduled meetings at which the new price proposals would be opened and the intended awardee announced were cancelled. On December 17, 2015, Rubio briefed the SC regarding the problems with the RFP and described her concerns about proceeding with the procurement. She explained that Respondent's procurement staff was of the view that the instructions in Section 6, as previously published in Addendum 1, were ambiguous because they did not clearly provide direction on how to complete the Bid Sheet for that section. Additionally, the Section 6 Bid Sheet, as structured in Addendum 1, did not allow the vendors to provide a plant unit rate that was inclusive of all overhead costs. To this point, she noted that unless the vendors provided a loaded rate——i.e., one that included all overhead costs——Respondent would not be able to issue work orders for any plant items in Section 6.17/ She explained that these flaws constituted the bases for Respondent's decision, announced on November 9, 2015, to require the submittal of new price proposals. Rubio further explained that in Respondent's rush to issue a revised Scope of Services as part of Addendum 5, mistakes had been made18/ and Respondent's Environmental Office needed more time to carefully review the Scope of Services and Bid Sheet, to ensure the RFP was correctly drafted and structured so that the Contract could be accurately solicited and procured. Additionally, the vendors——including Mark Clark of CECOS——had expressed confusion regarding the revised Bid Sheet and submitting new price proposals, and some vendors had inquired about submitting new technical proposals. Further, under the revised procurement schedule issued as part of Addendum 4 on November 9, 2015, the vendors had a very compressed timeframe in which to prepare and submit their new price proposals, heightening the potential for mistakes to be made. Because of these substantial problems and concerns with the RFP, Rubio recommended that Addendum 5 be rescinded, that all vendor proposals (both technical and price) be rejected, and that the entire procurement process be re-started. The SC concurred with her recommendation. As noted above, on December 17, 2015, Respondent rejected all proposals and announced that the Contract would be re-solicited in the future through issuance of another RFP. CECOS' Position CECOS takes the position that the RFP and the Section 6 Bid Sheet published in Addendum 1 were not ambiguous. Specifically, CECOS contends that the use of the 2.5 multiplier in Section 6 clearly indicated that Respondent was seeking an unloaded rate for the plant items listed on the Section 6 Bid Sheet. In support of this position, CECOS notes that all of the vendors other than DB had submitted unloaded rates for the plant items in Section 6. CECOS contends that this shows that Section 6 was not ambiguous, and that DB simply did not follow the RFP instructions——of which it was fully aware——in preparing and submitting its price proposal.19/ CECOS also contends that Rubio's failure to contact the other vendors to determine if they found the instructions or use of the 2.5 multiplier in Section 6 ambiguous evidences that Rubio's conclusion that Section 6 was ambiguous lacked any factual basis, so was itself arbitrary. CECOS asserts that Bogardus' intent to use a 2.5 multiplier for compensation purposes was evidenced by its inclusion on the Section 6 Bid Sheet, that its use on the Section 6 Bid Sheet did not render the RFP flawed, and that Bogardus' intent to compensate using the multiplier should control the structure of compensation paid under Section 6.20/ CECOS also notes that the use of the 2.5 multiplier on the Section 6 Bid Sheet mirrors the 2.5 multiplier in the existing environmental mitigation support services contract with the current contractor.21/ CECOs further contends that there was no material difference, with respect to structuring compensation for the plant items, between the ITN process used for procuring the existing contract and the RFP process used to procure this Contract. As additional support for its argument that the use of the 2.5 multiplier in Section 6 was valid, CECOS points to a request for proposal for environmental mitigation services issued by Respondent's District VI. In that contract, a 2.5 multiplier was used for compensation purposes, albeit for specific plant items that were not contained in the original list of specific plant items for which rate proposals had been solicited in the request for proposal. CECOS further contends that Respondent——and, most particularly, Rubio——did not conduct a thorough investigation into the historic use of 2.5 multipliers in Respondent's commodities contracts. CECOS argues that as a consequence, Respondent's determination that the use of the 2.5 multiplier rendered the Section 6 Bid Sheet structurally flawed and arbitrary was unsupported by facts, so was itself arbitrary and capricious. CECOS asserts that cancelling the notice of intent to award the Contract to CECOS and requiring the vendors to submit new price proposals placed CECOS at a competitive disadvantage and was contrary to competition because once the Proposal Tabulation was posted, the other vendors were informed of the price that CECOS had bid, so knew the price they had to beat when the Contract was re-solicited. CECOS also points to what it contends are procedural irregularities with respect to Respondent's treatment of, and communication with, CECOS and DB once Respondent decided to cancel the notice of intent to award the Contract to CECOS. Specifically, CECOS contends that Respondent did not respond to its calls or email asking why the intent to award the Contract to CECOS had been cancelled. CECOS also contends that Respondent communicated with DB on substantive matters during the "cone of silence." CECOS further notes that Respondent did not convene a resolution meeting within the statutorily- established seven-day period after CECOS filed its First Petition, but instead held the meeting over 60 days later, on January 28, 2015, and that even then, Respondent did not engage in good faith negotiation to resolve the challenge. Finally, CECOS contends that Respondent's decision to reject all proposals and start the procurement process anew was predicated on a series of arbitrary and erroneous decisions (discussed above) that created confusion, so that Respondent's ultimate decision to reject all proposals was itself arbitrary and capricious. CECOS asserts that it followed the instructions in the RFP in preparing its price proposal, submitted the lowest price proposal, and is ready, willing, and able to perform the Contract at the rates it proposed in its response for Section 6. On that basis, CECOS contends that it is entitled to the award of the Contract. Findings of Ultimate Fact CECOS bears the burden in this proceeding to prove that Respondent's decision to reject all proposals was arbitrary, illegal, dishonest, or fraudulent.22/ Even if CECOS were to meet this burden, in order to prevail it also must demonstrate that Respondent's actions in cancelling the intent to award the Contract and requiring the submittal of new price proposals were clearly erroneous, arbitrary, capricious, or contrary to competition. For the reasons discussed herein, it is determined that CECOS did not meet either of these burdens. The Multiplier Rendered Section 6 Ambiguous, Arbitrary, and Structurally Flawed As discussed in detail above, Respondent decided to cancel the intent to award the Contract to CECOS and to require the submittal of new price proposals by the vendors only after it had conducted an extensive investigation that included a careful review of numerous provisions in the RFP and the instructions to Section 6 and had analyzed the structure of Section 6 in relation to other provisions in the RFP. That investigation showed that nowhere in the RFP was the use of the 2.5 multiplier in Exhibit C, Section 6, discussed or explained. Thus, to the extent the multiplier was to be used in determining reimbursement for overhead costs and compensation, the RFP failed to explain this extremely important point, leaving the multiplier's purpose, use, and significance open to speculation and assumption by the vendors in submitting their price proposals. This rendered the multiplier's use in Section 6 ambiguous. This ambiguity is further evidenced by DB's and CECOS's widely divergent price proposals for Section 6, and the credible testimony of Perretta and Cyriaks regarding their differing views of the purpose of the 2.5 multiplier. The credible, persuasive evidence establishes that the ambiguity in Section 6 caused the vendors to have differing interpretations of the manner in which they were to propose plant unit rates in Section 6; that the vendors submitted plant price proposals predicated on differing assumptions; and that this resulted in Respondent being unable to fairly compare the price proposals for purposes of obtaining the most advantageous proposal for the State. On these bases, Respondent reasonably concluded23/ that the inclusion of the 2.5 multiplier in Section 6, rendered that portion of the RFP ambiguous. As extensively discussed above, the credible, persuasive evidence also establishes that Respondent concluded, based on its investigation and review of Section 6, that inclusion of the 2.5 multiplier rendered Section 6 both arbitrary and structurally flawed.24/ The credible, persuasive evidence further establishes that Rubio investigated Respondent's use of multipliers in commodities procurements and contracts to the extent necessary and appropriate for her to reasonably conclude that the use of the 2.5 multiplier in Section 6 rendered this portion of the RFP ambiguous, arbitrary, and structurally flawed.25/ In sum, the credible, persuasive evidence establishes that Respondent engaged in a thorough and thoughtful investigation before concluding, reasonably, that the inclusion of the 2.5 multiplier in Exhibit C, Section 6 rendered that portion of the RFP ambiguous. Respondent's Actions Were Not Contrary to Competition Although the evidence shows that CECOS may suffer some competitive disadvantage because competing vendors were informed of the lowest "bottom line" price they would have to beat, it does not support a determination that Respondent's decisions to cancel the intent to award the Contract to CECOS and require the vendors to submit new price proposals were contrary to competition. To that point, in Addendum 5, Respondent substantially restructured the Section 6 Bid Sheet and also amended the Bid Sheet comprising the other price proposal sections in Exhibit C, so that CECOS' and the other vendors' price proposals submitted in response to Addendum 5 may have substantially changed from those submitted in response to Addendum 1. In any event, it cannot be concluded that Respondent's decisions to cancel the intent to award the Contract to CECOS and require submittal of new price proposals are contrary to competition such that they should be overturned in this proceeding. Procedural Irregularities CECOS also points to certain procedural irregularities in Respondent's treatment of, and communication with, CECOS once Respondent decided to cancel the notice of intent to award the Contract to CECOS and require submittal of new price proposals. CECOS apparently raises these issues in an effort to show that Respondent's actions were clearly erroneous, contrary to competition, arbitrary, or capricious. The undisputed evidence establishes that Rubio communicated with both DB and CECOS during the "cone of silence" following the posting of its intent to award the Contract to CECOS. The undersigned determines that the "cone of silence" applied to Rubio and her communications with DB and CECOS within the 72-hour period following Respondent's posting of the intent to award the Contract. Specifically, she is an employee of Respondent's District IV Office, so is an employee of the executive branch of the State of Florida. Further, the evidence shows that her communications with both DB and CECOS during the "cone of silence" period dealt specifically with substantive, rather than "administrative" issues regarding the RFP and the vendors' price proposals. Accordingly, it is determined that these communications did, in fact, violate the "cone of silence." However, this does not require that Respondent's decision to cancel the intent to award the Contract to CECOS be overturned. The credible, persuasive evidence shows that while DB's conversation with Rubio may have spurred Rubio to decide she should investigate the Section 6 instructions and use of the 2.5 multiplier, it was not the reason why Respondent ultimately determined that the intent to award the Contract should be cancelled. Rather, Respondent's discovery of the ambiguity and structural flaws in Section 6, through Rubio's investigation, was the reason that Respondent determined that the intent to award the Contract to CECOS should be cancelled. In sum, the credible, persuasive evidence shows that notwithstanding Rubio's communications on substantive matters during the "cone of silence" with both DB and CECOS, the integrity of the procurement process was not undermined such that Respondent's decision to cancel the intent to award the Contract to CECOS was clearly erroneous, contrary to competition, arbitrary, or capricious. CECOS failed to present persuasive evidence establishing that other procedural irregularities rendered Respondent's actions in cancelling the intent to award the Contract to CECOS and requiring the vendors to submit new price proposals were clearly erroneous, contrary to competition, arbitrary, or capricious. Respondent's Decisions to Cancel Intent to Award the Contract and Require Submittal of New Price Proposals Based on the foregoing, it is determined that CECOS did not meet its burden to show that Respondent's decisions in cancelling the intent to award the Contract to CECOS and requiring the vendors to submit new price proposals were clearly erroneous, contrary to competition, arbitrary, or capricious. Respondent's Decision to Reject All Proposals As noted above, CECOS contends that Respondent's decision to reject all proposals and start the procurement process anew was predicated on a series of arbitrary and erroneous decisions that created confusion, so that Respondent's ultimate decision to reject all proposals was itself arbitrary and capricious. However, the credible, persuasive evidence shows that Respondent's ultimate decision to reject all bids was factually supported and was reasonable. As discussed above, Respondent initially decided to cancel the intent to award the Contract to CECOS and to require the vendors to submit new price proposals after it discovered the ambiguity and structural flaws resulting from the use of the 2.5 multiplier in Section 6. At that point, rather than rejecting all proposals, which would require the vendors to go to the time and expense of preparing completely new proposals, it decided to instead only require the vendors to submit new price proposals. Due to the interrelated nature of the six sections of Exhibit C comprising the complete price proposal for the RFP, Respondent determined revision of Section 6 would also require revision of the other five sections of Exhibit C, in order to ensure that they were internally consistent with each other. At the mandatory pre-bid meeting preceding the issuance of Addendum 5, the participating vendors had numerous questions about the sweeping revisions to all six sections of Exhibit C, and they expressed confusion about the revisions and their effect on preparation of new price proposals. Some vendors also expressed concern that they may have to change their personnel in order to be able to accurately prepare new price proposals, raising the question whether the technical proposals needed to be revised. As a result of vendor confusion and concern, and also because Respondent's Environmental Office needed additional time to carefully review and revise the RFP as needed, Respondent decided to reject all proposals and to start the procurement process anew. Respondent's decision to reject all bids was made after fully considering all of the pertinent information regarding the ambiguity and structural flaws in Section 6, vendor confusion and concern caused by Respondent's revisions to Exhibit C needed to address the ambiguity and flaws in Section 6, and Respondent's need for additional time to ensure that its RFP accurately and clearly solicited the needed environmental mitigation support services. Accordingly, Respondent did not act arbitrarily in deciding to reject all bids. Further, no persuasive evidence was presented to show that Respondent's decision to reject all bids was illegal, dishonest, or fraudulent.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Transportation: Issue a final order in Case No. 16-0769 finding that the rejection of all proposals in response to Request for Proposal RFP-DOT-15/16-4004PM was not illegal, arbitrary, dishonest, or fraudulent; and Issue a final order in Case No. 16-3530 finding that the decisions to cancel the award of the Contract for Request for Proposal RFP-DOT-15/16-4004PM to CECOS and to require the vendors to submit new price proposals for Request for Proposal RFP-DOT-15/16-4004PM were not clearly erroneous, contrary to competition, arbitrary, or capricious. DONE AND ENTERED this 30th day of December, 2016, in Tallahassee, Leon County, Florida. S CATHY M. SELLERS 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 30th day of December, 2016.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Background In September 1992, respondent, Jacksonville Transportation Authority (JTA), issued Invitation to Bid No. CF-0310-92 (ITB) inviting contractors who held certificates of prequalification to bid on Department of Transportation (DOT) projects to submit proposals for performing construction work on 1.6 miles of State Road 9A in Duval County, Florida. The contract to be awarded was the third contract of three contiguous construction projects on State Road 9A and was commonly known as contract 3. It was to be completed within twenty-four months. Essentially, the work involves the widening of that road from two to four lanes, and adding connector ramps, a median, and other associated improvements. The project is more specifically identified as project number 72002-3533. The ITB called for sealed bids to be filed no later than 2:00 p.m. on September 23, 1992, with an award of the contract to be made to the lowest responsive bidder at JTA's meeting on September 29, 1992. The ITB provided further that "the right is reserved (by JTA) to reject any and all bids." A total of six contracting firms filed bids in response to the solicitation. They included petitioner, Hubbard Construction Company (Hubbard), and intervenor, Petticoat Contracting, Inc. (PCI), both of whom were prequalified. Hubbard is a large construction firm headquartered in Orlando, Florida, and has been in the construction business for some seventy years. In 1992 alone, it bid on more than 300 jobs and did approximately $180 million in business. Conversely, PCI is a much smaller firm headquartered in Jacksonville, Florida, with approximately forty-five employees. It has been in business for almost seven years and is minority (female) owned and operated. Hubbard was the lowest dollar bidder with a bid in the amount of $6,257,722.38, while PCI was the second lowest bidder with a bid in the amount of $6,270,121.43, or approximately $12,400.00 higher than Hubbard. After the bids were opened, they were evaluated by JTA's engineering consultant, Sverdrup Corporation, a Jacksonville engineering firm. Concluding that Hubbard's bid was "unbalanced" in several material respects and thus was irregular, the consultant recommended that the contract be awarded to PCI, the second lowest bidder. This recommendation was concurred in by JTA's staff and was presented to JTA at a meeting held on September 29, 1992. After a discussion regarding the bid proposals, including consideration of comments from Hubbard and PCI representatives, JTA voted to award the contract to PCI. Hubbard then timely filed its protest. In its protest, Hubbard generally contended that JTA had erroneously determined that Hubbard's bid was unbalanced, and by doing so, JTA had imposed upon Hubbard a bid requirement not encompassed within the ITB. It also contended that under the standard used by JTA, all other proposals, including that of PCI, were unbalanced. Finally, the protest argued that PCI was not actually a disadvantaged business enterprise and thus should have been required to furnish documentation concerning its compliance with minority subcontractor requirements. As to this latter contention, no proof was submitted at hearing, and thus no discussion of that allegation is required. The ITB Requirements JTA has its own set of specifications that were distributed to each of the bidders on the project. Among other things, the ITB provided that "(a)ll work is to be done in accordance with the Plans and Special Provisions, and the Standard Specifications of the State of Florida Department of Transportation." The latter reference was to the 1991 edition of the Standard Specifications for Road and Bridge Construction used by DOT. Those specifications are included in the ITB because JTA must build its roads and bridges to state road specifications. In this regard, article 2-6 of those specifications provided in relevant part as follows: A proposal will be subject to being considered irregular and may be rejected if . . . it shows irregularities of any kind; also the unit prices are obviously unbalanced, either in excess of or below the reasonable cost analysis values. The ITB also contained an Appendix A which included supplemental specifications to accompany the DOT document. However, it did not modify article 2-6. The ITB further contained a section entitled Special Provisions which represented "modifications and additions to the corresponding Articles" in DOT's Standard Specifications and the supplemental specifications set forth in Appendix A. Again, article 2-6 was not changed but section 4-1 of the Special Provisions, which constitutes an addition to DOT's specifications, provided that all items which are constructed or installed will be paid for at the unit price bid regardless of the total quantity utilized. Unit prices shall represent the actual costs and profit earned for labor, equipment and materials used in completing the unit of work bid. Therefore, the DOT standard specifications, and specifically article 2-6, were controlling on this contract. In construing the foregoing provisions, JTA considers a bid item to be "irregular" when it is far higher or lower than the engineer's estimate and the average of the other bids. When an irregularity is discovered in a bid, a decision is then made as to whether the irregularity is material or significant in terms of its affect on the competitive process and ensuring that no bidder receives a substantial advantage over other bidders. The potential effect of any irregularity on JTA's interest is also considered in deciding whether the irregularity is material such that the bid should be rejected pursuant to article 2-6 of the specifications. In conjunction with the above analysis, JTA compares the other contractors' bids with the engineer's estimate, and if they are closely approximated, it deems the estimate to be accurate. Conversely, where the average bids and the estimate are not close, JTA concludes that the estimate may be erroneous. It is noted that the consultant relies on the DOT specifications and DOT's historic pricing methods when preparing his estimates. The ITB called for each bidder to submit a unit price for each component of work required under the contract. This required each bidder to estimate the cost for providing services for more than one hundred sixty items, including item 110-1-1 (clearing and grubbing), item 102-2 (topsoil), and item 715-91-120 (high-mast lighting poles), which items are of particular concern in this controversy. The amount of the bid upon which award of the contract was to be based equaled the sum of the prices for the listed items. Item 110-1-1 is a lump sum item, rather than work on a per unit basis, and required the contractor to clear and grub 79.489 acres of land. This work is done at the outset of the project and is generally completed within the first ninety days of the job. Item 102-2 involved the placement of 120,041 square yards of topsoil on the embankments which was to serve as a layer for seeding the grass. However, the parties agree that the contractor had the choice of using either topsoil or a muck blanket extracted from the job site through excavation. If the latter option was chosen, this would eliminate the need to procure topsoil from off-site. Even so, to avoid the possibility of a change order by the contractor, which had occurred on several earlier projects, JTA expected the contractor to estimate his actual cost for topsoil as if the topsoil was to be obtained from off-site. The final disputed item required the contractor to furnish and install fifteen 120-foot street lighting poles. Bidders were required to give a price for a single pole and then multiply that price times the estimated quantity that would be required. This work is generally completed during the last phase of the job. The Submissions As noted earlier, six contractors filed bids in response to the ITB with prices ranging from a low of $6,257,722.38 by Hubbard to a high of $6,997,656.41 by the highest bidder. Hubbard proposed to complete the job in thirteen months even though the ITB allowed twenty-four months while PCI intended to use the full amount of time. As to the three items in dispute, the record reflects the engineer's estimated cost, Hubbard's cost, PCI's cost and the average cost for all bidders excluding Hubbard were as follows: Item Estimated Cost Hubbard PCI Average costs 110-1-1 $150,000.00 $545,000.00 $176,600.00 $147,100.14 102-2 33,011.28 1,200.41 82,828.29 71,064.27 715-91-120 180,000.00 25,500.00 204,750.00 199,701.54 In preparing its bid, Hubbard assumed that the DOT standard specifications would be interpreted and supplied in conformity with DOT's historical interpretation. Therefore, Hubbard prepared its bid in the same manner as it always had, including prior JTA submissions, and this resulted in the above deviations from estimated and average costs for the following reasons. Hubbard obtained a copy of the plans and specifications approximately two weeks before the date for filing its bid and then assigned a team of estimators to prepare the numbers in the bid package. Because several items are subcontracted out, including grassing, striping and electrical work, Hubbard had to wait until the subcontractors returned their prices before it knew the actual cost of those services. As is true in almost every case, the subcontractors did not furnish their prices until the final day or hour. Hubbard was reluctant to leave those items blank until the last moment fearing it would be difficult for the persons filing the bid in Jacksonville to complete the lengthy proposal before the deadline, and an error might be made by them in their haste to change the prices on multiple items for which they received price quotations in the last hour. Accordingly, in filling out the items on which subcontractors would be used, Hubbard used its best estimate of the subcontractor prices based upon its prior experience on other jobs. However, to allow for variances that might occur between the actual subcontractor prices and the estimated prices, Hubbard left blank one lump sum item so that this item's estimated cost could be adjusted up or down at the last moment depending on the other variances. In this way, the total amount of the bid would not change. As it turned out, there were variances in twenty to thirty items which were based on subcontractor prices, with one item (high mast lighting poles) coming in substantially higher than originally estimated. As noted above, Hubbard did not change the estimated subcontractor prices but rather calculated the difference between its estimate and the actual subcontractor prices and added that number to the lump sum price for clearing and grubbing. This resulted in increasing the cost for clearing and grubbing from an actual cost of around $150,000.00 to $545,000.00 while the estimated cost for fifteen high mast lighting poles ($25,500.00) was substantially below its actual cost of more than $170,000.00. According to Hubbard, it follows this practice on virtually every bid document it prepares, including those filed with JTA, and has never had one rejected on the ground certain items were materially unbalanced. Testimony that these preparation procedures are standard in the industry and enable contractors to give the public the best possible prices by allowing for last minute changes while protecting against error was not contradicted. In preparing its topsoil estimate, Hubbard determined that the anticipated muck and subsoil excavation would eliminate the need to procure topsoil from off-site. Therefore, it proposed a cost of only one cent per square yard for adding topsoil to the embankment on the theory that no topsoil would be procured from off-site. Because Hubbard's computer would not take a zero cost, and the cost was already included in the embankment charges, Hubbard put the next lowest price, or one cent, as the cost for topsoil. The final relevant item, high mast lighting, was to be subcontracted out to a specialty contractor. Hubbard originally estimated a cost of $1,700.00 per pole for fifteen poles, or a total cost of $25,500.00. At hearing, Hubbard conceded that this estimated cost was either a mistake on the part of the person filling out the proposal or "a mistake of judgment" by an estimator, and that its actual costs were substantially higher. However, it felt that there was no disadvantage to JTA by preparing its bid in that manner. In its proposal, PCI used a cost of $176,000 for clearing and grubbing, 69 per square yard, or a total cost of $82,828.29, for topsoil, and $13,650 for each high mast lighting pole, or a total cost of $204,750.00. These estimates did not substantially deviate from the bidders' average or the engineer's estimated costs. As to the topsoil item, PCI also intended to use muck excavated from the job site in lieu of topsoil. However, it was not sure that the amount of muck excavated would be adequate, and thus it estimated the amount of topsoil that would be required if the soil was obtained off-site, added a component for overhead and profit, and arrived at a total cost of 69 per square yard. Finally, PCI's estimated cost for pile splices, mobilization, maintenance of traffic and prestressed concrete beams were unbalanced to some degree and constituted a violation of section 4-1. However, these variances were relatively minor in nature and were not material. The Evaluation Process JTA utilized the services of an outside engineering firm to serve as consultant on the project. Immediately after the bids were opened, the consultant's duties were to verify that certain basic requirements were met and that the contractor had the capacity to perform the work. He was also required to prepare a bid tabulation listing the contractors' estimates with the engineer's estimate and to determine if any irregularities were present. A recommendation would then be submitted to the JTA staff regarding the award of the contract. The staff was also required to review the bids and to make a recommendation to the JTA. During the course of his evaluation of Hubbard's bid, the consultant noted a marked variance between estimated costs for clearing and grubbing of $150,000.00 and Hubbard's price of $545,000.00, particularly since the average cost of all other bidders was $147,100.14. He next noted the proposed cost for high mast lighting poles ($25,500.00) and found it to be "extremely low" in relation to the engineer's estimated price ($180,000) and the average cost of almost $200,000.00 submitted by the other bidders. In addition, he found the engineer's estimated cost for topsoil of $33,011.28 to be much higher than Hubbard's proposed cost of $1,200.41, especially since the other bidders averaged $71,064.27. Finally, the consultant conducted a similar review of PCI's proposal, and while he found some irregularities in its bid, he did not consider them material. Thereafter, in a letter to JTA's executive director on September 28, 1992, the consultant noted that: Upon examination of the bids, it became evident that some of Hubbard Construction Company's unit prices are unbalanced. Item No. 110-1-1, Clearing and Grubbing, is a lump sum item and is one of the first pieces of work to be performed in this project. Hubbards' bid amount is $545,000.00. The engineer's estimate is $150,000.00 and the average of all other bidders is $147,000.14. Item no. 715-91-120, High Mast Lighting Pole Complete (Furnish and Install)(120'), also appears to be unbalanced. This work would be performed near the end of the contract. Hubbard's bid amount is $25,500.00. The engineer's estimate is $180,000.00 and the average of the other bidders is $199,701.54. Hubbard's bid amount will not cover the cost of the materials required of this item based on reasonable expected costs. Both of the items are in contradiction to Section 4, Article 4-1 which states "Unit prices shall represent the actual costs and profit earned for labor, equipment and materials used in completing the unit of work bid." Item 102-2, Topsoil, shows an inconsistency. Hubbard's bid amount is $1,200.41. The engineer's estimate is $33,011.28 and the average of the other bidders is $71,064.27. Based on the results of the bid review noted above, it is recommended that Hubbard Construction Company's bid proposal be considered irregular as per Article 2-6 of the Standard Specifications, and therefore rejected. A similar evaluation process was subsequently conducted by the JTA staff, and it reached the same conclusion as the consultant. Its recommendation to reject the bid of Hubbard on the ground the bid was "irregular as per Article 2-6 of the JTA Standard Specifications" and to award the contract to the second lowest bidder, PCI, was conveyed by memorandum to the JTA Highway Committee on September 29, 1992, and was approved by JTA the same date. Was the Agency's Action Arbitrary? JTA's conclusion that Hubbard's bid was materially unbalanced and irregular and thus violated article 2-6 was based on two principal concerns. First, JTA considered the adding of nearly $400,000.00 in costs to clearing and grubbing to be "front-end loading" and thus improper. This means the bid was structured so that a large amount of money, not commensurate with the amount of work actually performed, would be paid at the beginning of the project. In this case, clearing and grubbing would be completed within the first ninety days of the project yet Hubbard would receive almost $400,000.00 in excess of its actual costs to perform that work. JTA believed that this would reduce its control over the performance of the contract, it would be unfair to other bidders on the project, the money would be used to finance other portions of the work, and the possibility existed that Hubbard might not complete performance on the job after being paid the up-front money. Second, and based on what it says has happened on other jobs, JTA feared that by allowing Hubbard to underprice its topsoil item, Hubbard could conceivably request a change order increase of more than $100,000.00. This amount was calculated on the theory that Hubbard might have a $60,000.00 overrun on muck (120,000 cubic yards x 50 ) because it was using the muck to meet the topsoil requirement, and a $1,200.00 underrun on topsoil (which represents the amount bid) because no topsoil would be used, or a net overrun of $58,800.00. At the same time, JTA feared that an overrun on muck would lead to an overrun on subsoil excavation. At a price of $5.00 per cubic yard for any overruns on this item, JTA would be forced to spend as much as $53,000.00 more on a change order for this item. Assuming this actually occurred, PCI would then be the low bidder by almost $88,000.00. Initially, JTA's concerns must be tempered by the fact that on the previous contract for State Road 9A, known as contract 2, Hubbard structured its bid in the same manner as on contract 3. On that contract, its bid was almost three times the engineer's estimate for clearing and grubbing and exceeded the engineer's estimate for mobilization by more than four fold. Even so, Hubbard was more than $200,000.00 lower than the second low bidder and was $400,000.00 lower than the engineer's estimate. On that project, JTA awarded the contract to Hubbard and did not raise the contention, as it did here, that the bid was materially unbalanced. At hearing, the consultant was unable to give a satisfactory explanation as to why the prior bid was "regular" but the instant bid was "irregular" even though both bids had been prepared in the same manner and contained "obviously unbalanced items." In this case, JTA did not give bidders any notice that it intended to construe article 2-6 any differently than it had on prior contracts. In addition, in preparing its bid, Hubbard assumed that article 2-6 would be interpreted in the same manner as did DOT since the ITB provided that the DOT specifications would apply. Moreover, there was nothing in the ITB Special Provisions which gave notice that JTA intended to place a different interpretation on article 2-6 than was customarily done by DOT. According to uncontradicted testimony, DOT has consistently interpreted article 2-6 in the following manner. DOT does not find balancing in and of itself to be a sufficient basis to reject a bid as being irregular under article 2-6. Indeed, virtually every bid submitted for any highway construction project, including those of PCI and Hubbard here, are unbalanced in some respect. If DOT has serious concerns about an unbalanced bid, the terms of article 2-6 require that a study be made to see if the unit prices are "either in excess of or below the reasonable cost analysis values." To do this, DOT performs a study of the time value of money related to the major components of work in a contract on an item by item intra-bid basis, compares the results of that analysis to an irrevocable schedule of construction, and then determines whether the taxpayers would be detrimentally affected by awarding the contract to a bidder with the unbalanced items. In other words, a contractor is paid as units of work are completed, and to the extent major items of work are unbalanced so that payments are deferred or accelerated, the cash flow of the agency may be adversely affected. Without a time value of money analysis, a determination cannot be made as to whether the taxpayers are detrimentally affected by an unbalanced bid. Indeed, out of several thousand bids over a twelve year study period (1975-1987), DOT rejected no more than six because of unbalancing, and then only after such an analysis was performed. As to Hubbard's bid, a former DOT secretary expressed the view that Hubbard's bid did not even rise to the level necessary to invoke the analysis. In any event, by failing to follow its own specifications and performing such a study, JTA could not fairly conclude that the awarding of a contract to PCI would positively impact its net present value of money. This is especially true here since Hubbard proposed to complete the project in thirteen months and PCI in twenty-four months, and neither party submitted a construction schedule with its bid. Therefore, JTA had no basis to conclude that article 2-6 had been violated. Finally, there was no evidence to support the contention that JTA would lose control of the project if Hubbard was paid the excess monies for clearing and grubbing. JTA's concern that Hubbard might fail to complete the job if it received a large payment up front is also without merit. While front end loading is a legitimate concern where a contractor might not finish the project, the facts dispel that concern here. Besides having to post a performance bond, Hubbard would also be disqualified from bidding on other jobs in the event a project was abandoned. Given Hubbard's size and reputation, and the fact that the contract itself provides for JTA retaining a percentage of the payment of work until all work is completed, it is found this concern is not legitimate. As to the concern over topsoil, there was insufficient evidence to establish that muck was more likely to overrun than any other item. Indeed, JTA acknowledged at hearing that the engineer's estimate for muck excavation was as accurate as it could be and no analysis or testing had been performed which would support a change in position. In addition, a JTA board member testified that the topsoil pricing was not considered the primary basis for rejection of Hubbard's bid. Finally, the use of a one cent price for topsoil did not affect the overall price of the bid or give Hubbard an advantage or benefit not enjoyed by others.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered by respondent awarding the contract for project no. 72002-3533 to Hubbard Construction Company. DONE AND ENTERED this 28th day of January, 1993, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of January, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-6302BID Petitioner: 1-3. Partially accepted in finding of fact 1. Partially accepted in finding of fact 3. Partially accepted in findings of fact 4 and 7. Partially accepted in finding of fact 3. 7-12. Partially accepted in finding of fact 10. Partially accepted in findings of fact 10 and 12. Partially accepted in findings of fact 8 and 12. Partially accepted in findings of fact 10 and 12. 16-19. Partially accepted in finding of fact 10. 20-22. Partially accepted in finding of fact 15. 23. Accepted in finding of fact 4. 24. Partially accepted in finding of fact 19. 25. Partially accepted in finding of fact 10. 26. Partially accepted in finding of fact 6. 27-29. Partially accepted in finding of fact 19. 30. Partially accepted in finding of fact 18. 31. Partially accepted in finding of fact 17. 32. Partially accepted in finding of fact 19. 33. Rejected as being unnecessary. 34-35. Partially accepted in finding of fact 19. 36-38. Partially accepted in finding of fact 20. 39-40. Partially accepted in finding of fact 21. 41. Rejected as being unnecessary. 42. Partially accepted in finding of fact 13. 43. Rejected as being unnecessary. 44. Partially accepted in finding of fact 19. 45. Rejected as being unnecessary. Respondent: Partially accepted in findings of fact 2 and 3. Partially accepted in findings of fact 4 and 5. Partially accepted in finding of fact 14. Partially accepted in finding of fact 6. Partially accepted in findings of fact 15 and 17. 6-8. Partially accepted in finding of fact 17. Rejected as being unnecessary. Partially accepted in finding of fact 15. Partially accepted in findings of fact 13 and 16. Partially accepted in finding of fact 3. Rejected as being unnecessary. Intervenor: Partially accepted in finding of fact 1. Partially accepted in finding of fact 3. Partially accepted in findings of fact 4 and 5. Partially accepted in finding of fact 14. 5-10. Partially accepted in finding of factg 15. 10A-C. Partially accepted in finding of fact 17. 11. Partially accepted in findings of fact 3 and 16. Note - Where a proposed finding has been partially accepted, the remainder has been rejected as being irrelevant, unnecessary, cumulative, not supported by the more persuasive evidence, or a conclusion of law. COPIES FURNISHED: Miles N. Francis, Jr. Executive Director Jacksonville Transportation Authority P. O. Drawer O Jacksonville, Florida 32203 F. Alan Cummings, Esquire Mary M. Piccard, Esquire P. O. Box 589 Tallahassee, Florida 32302-0589 Cindy A. Laquidara, Esquire Kenneth A. Tomchin, Esquire P. O. Box 4099 Jacksonville, Florida 32201 Herbert R. Kanning, Esquire 12-14 East Bay Street Suite 302 Jacksonville, Florida 32202
