The Issue At issue in this proceeding is whether the decision of the respondent, Department of Corrections (Department), to award the subject bid to intervenor, Doctors and Physicians Laboratories, Inc. (Doctors), comported with the essential requirements of law.
Findings Of Fact Background On October 16, 1991, the Department of Corrections (Department) issued invitation to bid number 91-CO-5369 (hereinafter "the ITB"), which sought to secure appropriate services to perform drug tests on certain applicants for employment and existing employees of the Department. The deadline for submitting bids was established as 11:00 a.m., November 7, 1991. At the time of the deadline, the Department had received four bids, including those of petitioner, Toxicology Testing Service, Inc., and intervenor, Doctors and Physicians Laboratories, Inc. (Doctors). Petitioner's bid was $372,000, and Doctors' bid was $315,491.60. Based on its evaluation, the Department ranked Doctors first and petitioner second, with composite scores of 91.67 and 90.38, respectively, and proposed to award the contract to Doctors. Petitioner filed a timely formal written protest to contest the Department's decision, and charged that the Department materially departed from the evaluation criteria contained in the ITB. The Invitation to Bid Pertinent to this case, section 4.7 of the ITB established the evaluation criteria to be used in determining the acceptability of the bids as follows: 4.7 Evaluation Criteria Criteria Point Value 1. References 5 2. Firm Profile 5 3. Firms Qualifications 15 Understanding of Scope of Services 25 Bid Price 50 100 And, section 4.7.5 of the ITB established the following methodology to be utilized in awarding points for the bid price criteria: The award for bid price shall be determined as follows: The Bidder who submits the lowest bid price will be awarded 50 points. All others bidders will be awarded points based on the following formula: Bid Price Points = 50 X [1-A/B] where: A = the difference between the percentage of the bid being evaluated and the low bid(s). B = the low bid. The lowest bid price will be computed by multiplying the unit prices for Items 1, 2 and 3 for all three years by the estimated quantity. The estimated quantity is for bidding purposes only and is not a guarantee. The total annual cost for Items 1 and 2 for all three years will be added to determine the Total Cost for all three years. The vendor with the lowest Total Cost will be awarded the 50 points. Negative points will not be awarded. Pursuant to the provisions of section 5.13 of the ITB, the contract was to be awarded to the bidder that received the highest overall point total under the criteria established by section 4.7 of the ITB. The Department's evaluation and the protest Based on its evaluation of the bids, the Department's evaluation committee awarded petitioner 49.34 points for its technical proposal (items 1-4 of the evaluation criteria) and Doctor's 41.67 points for its technical proposal. Bid price points were then established through a preexisting computer program, which derived 41.04 points for petitioner and 50 points for Doctors. When totalled, petitioner received 90.38 points and Doctors received 91.67 points. Accordingly, the Department proposed to award the contract to Doctors. Petitioner filed a timely protest to contest such award. The gravamen of that protest is petitioner's contention that the Department applied a methodology other than that established by the ITB to derive the bid price points and that had it utilized the methodology established by the ITB petitioner would have received the most points and been the prevailing bidder. 1/ Consistent with petitioner's contention, the proof demonstrates that the computer program used to derive the bid price points and the methodology established by the ITB to derive such points differed with regard to the definition of A in the formula, discussed supra. In the computer program, factor A was defined as the difference between the price of the bid being evaluated and the low bid. In the ITB, factor A was defined as the difference between the percentage of the bid being evaluated and the low bid. The Department was not, however, aware of this dichotomy until the subject protest, believing that its ITB conformed with the methodology it had previously programed for its computer, and, at hearing, offered proof, which is credited, that use of the word "percentage" in the definition of A was a typographical error which should have read "price." Notably, the Department heavily weighed price (50%) in its ITB, and it is apparent the Department intended to use a formula that would create a difference in price scoring that was relative to any difference in the bid prices. Use of the formula, as correctly defined in its computer program, would accomplish such goal. Use of the formula, as incorrectly defined by the ITB and interpreted by petitioner in these proceedings, would not accord any meaningful weight to price. 2/ Under such circumstances, it cannot be reasonably concluded that the Department departed from the essential requirements of law when it declined to apply the methodology as interpreted by petitioner to award the contract. Moreover, for the reasons that follow, petitioner has failed to demonstrate that the Department's decision to stand by its award based on the correctly defined methodology departed from the essential requirements of law. Here, the proof demonstrates that petitioner, upon receipt and review of the ITB, was well aware that the formula for awarding points based on price was nonsensical, and most likely, in error. 3/ Notwithstanding, petitioner took no action under the provisions of general condition 6 and special condition 4.4 of the ITB to raise any question or seek any clarification or interpretation of the formula from the Department. 4/ Rather, petitioner submitted its best price offer, more likely than not, without reliance on the erroneous formula set forth in the ITB. 5/ Under such circumstances, it cannot be concluded that the Department's award of the contract, based on an application of the correct definition of factor A, accorded any bidder an unfair advantage or otherwise departed from the essential requirements of law.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be rendered dismissing the subject bid protest. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 20th day of May 1992. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of May 1992.
Findings Of Fact Findings based on stipulation The School Board of Broward County, Florida, ["Board"] issued bid number 94-307D [Lease of School Board Owned Parking Lot - Term Contract] on the 22nd day of November, 1993. Three bidders responded to the invitation to bid. They were: Bliss Parking, Inc., a Florida Corporation ("Bliss"); Fort Lauderdale Transportation, Inc., d/b/a USA Parking Systems ("USA"); and Carl A. Borge. An initial review of the tabulations of the bids indicated that Bliss and USA had submitted the identical percentage of shared revenue to the Board in their respective bids. After the review of the bids, Board staff posted a recommendation to award the bid to USA. [See the "remarks" portion of Exhibit B.] A bid protest was filed by Bliss because of the "remarks" portion of Exhibit B. After a review of Bliss' bid protest, Board staff amended its recommendation to reject all bids because of the issues raised in Bliss' protest. After Board staff notified all bidders of this amended recommendation, USA filed a notice and formal protest. The Board, at its meeting on March 1, 1994, heard the presentation of USA and Board staff. The Board, after deliberating the matter, deferred the item until the meeting of March 15, 1994, wherein seven Board members would be present. At the March 15, 1994, Board meeting, by a vote of 4 to 3, the Board granted USA's protest and awarded the bid to USA whom the Board had determined was the highest bidder meeting bid specifications. All bidders were notified of the Board's action and on the 16th day of March 1994 Bliss timely filed its notice of protest and its formal written protest. Bliss appeared with counsel before the Board on the 5th day of April 1994. After considering arguments of counsel for Bliss and reviewing the material in Agenda Item H-1 and in consideration of its previous actions, it voted to reject Bliss' protest seeking the rejection of all bids received and re-bidding of the item. Bliss subsequently requested a formal hearing under Chapter 120.57, Florida Statutes. Findings based on evidence adduced at hearing The General Conditions portion of the Invitation To Bid includes the following provision: INTERPRETATIONS: Any questions concerning conditions and specifications must be submitted in writing and received by the Department of Purchasing no later than five (5) working days prior to the original bid opening date. If necessary, an Addendum will be issued. A related provision in the Special Conditions portion of the Invitation To Bid reads as follows: 21. INFORMATION: Any questions by prospective bidders concerning this Invitation to Bid should be addressed to Mrs. Sharon Swan, Purchasing Agent, Purchasing Department, (305) 765-6086 who is authorized only to direct the attention of prospective bidders to various portions of the Bid so they may read and interpret such for themselves. Neither Mrs. Swan nor any employee of the SBBC is authorized to interpret any portion of the Bid or give information as to the requirements of the Bid in addition to that contained in the written Bid Document. Questions should be submitted in accordance with General Condition #7. Interpretations of the Bid or additional information as to its requirements, where necessary, shall be communicated to bidders only by written addendum. The Special Conditions portion of the subject Invitation To Bid includes the following provisions: REFERENCES: A minimum of three (3) references must be provided by completing page 14 of the bid. Failure to provide references with the bid or within five (5) days of request by the Purchasing Department will be reason for disqualification of bid submitted. All references will be called. SBBC reserves the right to reject bid based on information provided by references. Page 14 of the Invitation To Bid has three sections, each of which reads as follows: COMPANY NAME: STREET ADDRESS: CITY: STATE: ZIP: TELEPHONE NUMBER: CONTACT PERSON'S NAME: NUMBER OF PARKING SPACES: LENGTH OF CONTRACT: At page 12 of the Invitation To Bid, the following note appears under the Bid Summary Sheet portion of the document: "NOTE: Calculation of high bidder shall be the bidder offering the highest percent of shared revenue meeting all specifications and conditions of this bid." The Special Conditions portion of the Invitation To Bid also contains a procedure for resolving tie bids, which reads as follows, in pertinent part: TIE BID PROCEDURES: When identical prices are received from two or more vendors and all other factors are equal, priority for award shall be given to vendors in the following sequence: A business that certifies that it has implemented a drug free work place program shall be given preference in accordance with the provisions of Chapter 287.087, Florida Statutes; The Broward County Certified Minority/ Women Business Enterprise vendor; The Palm Beach or Dade County Certified Minority/Women Business Enterprise vendor; The Florida Certified Minority/Women Business Enterprise vendor; The Broward County vendor, other than a Minority/Women Business Enterprise vendor: The Palm Beach or Dade County vendor, other than a Minority/Women Business Enterprise vendor; The Florida vendor, other than a Minority/Women Business Enterprise vendor. If application of the above criteria does not indicate a priority for award, the award will be decided by a coin toss. The coin toss shall be held publicly in the Purchasing Department; the tie low bid vendors invited to be present as witnesses. The Petitioner filled out all three sections on page 14 of the Invitation To Bid and submitted that page with its bid. The three references listed by the Petitioner were companies for whom the Petitioner provided parking services or parking facilities, but none of the three references listed by the Petitioner was a land owner from whom the Petitioner leased land for the operation of a parking facility. Mr. Arthur Smith Hanby is the Director of Purchasing for the School Board of Broward County. In that capacity he is in charge of the bidding process for the School Board. Specifically, he was in charge of the bidding process for the subject project. In the course of evaluating the bids on the subject project, the evaluation committee reached the conclusion that there was a problem with the bid submitted by the Petitioner with respect to the references listed in the Petitioner's bid. In the original bid tabulation and recommendation posted on January 4, 1994, the recommendation was that the contract be awarded to the Intervenor, whose bid amount tied with the Petitioner's bid amount. 4/ The reasons for the recommendation were described as follows in the "remarks" portion of the tabulation and recommendation form: REJECT BID FROM BLISS PARKING, INC. REFERENCES WERE GIVEN ON PAGE 14 OF BID. ALL REFERENCES WERE CALLED. BASED UPON INFORMATION PROVIDED BY THESE REFERENCES AND IN ACCORDANCE WITH SPECIAL CONDITION #10, IT IS RECOMMENDED THAT THE BID FROM BLISS PARKING, INC. BE REJECTED. EVALUATION OF THIS BID CEASED AT THIS TIME. THERE MAY BE ADDITIONAL REASONS WHY THIS BID COULD NOT BE ACCEPTED. The sole reason for the rejection of the Petitioner's bid was that the references listed by the Petitioner were not the types of references the evaluation committee wanted to receive. The evaluation committee wanted references from entities who, like the School Board, were land owners who had leased land to a parking lot operator. The evaluation committee was of the opinion that references from other sources would not adequately protect the interests of the School Board. There is nothing in the Invitation To Bid that addresses the issue of who should be listed as references. Specifically, there is nothing in the Invitation To Bid requiring that references be submitted from land owners who had leased land to a parking lot operator. At the time of the issuance of the subject Invitation To Bid, the Petitioner was operating the subject parking lot for the School Board. There were no material differences in the bids submitted by the Petitioner and the Intervenor other than the differences in the types of references they listed. The Petitioner's references who were contacted did not provide any adverse information about the Petitioner. The evaluation committee spoke to two of the references listed by the Petitioner, but did not speak to the third listed reference. The third reference listed by the Petitioner was a court reporting firm located across the street from the location of the subject parking lot. The evaluation committee did not speak to anyone at the court reporting office because the telephone number listed for that reference was not a working number. The evaluation committee made an unsuccessful attempt to locate the telephone number of the court reporting firm in the telephone book.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the School Board issue a final order in this case concluding that the Petitioner's bid is responsive to the Invitation To Bid and that the School Board then take one of the courses of action described in paragraph 26, above. DONE AND ENTERED this 23rd day of June 1994 at Tallahassee, Leon County, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of June 1994.
Findings Of Fact On March 1, 1984, Respondent gave notice to qualified contractors that it would receive sealed bids for State Project No. 72000-3541, referred to as Federal-Aid Project No. M 9041(10). This project involves the installation of a computerized traffic control system for the City of Jacksonville. In response to the opportunity to bid, the Department of Transportation received four bids. Petitioner, Winko-Matic Signal Company, was among the bidders. The other bidders were Georgia Electric Company, Traffic Control Devices, Inc., and Sperry Systems Management. The bids of Traffic Control Devices and Sperry Systems were rejected based upon an error in bid tabulations on the part of Traffic Control, a mistake on the quantities page, with the Sperry rejection being based upon a bid bond problem. Traffic Control had been the apparent low bidder with a bid of $1,964,115. Winko-Matic was the second apparent low bidder with a bid of $2,279,604.70. The Department of Transportation had estimated that the total cost of the Jacksonville project would be $ 2,024,680.61. Having discarded the bid of Traffic Control Devices, the Department of Transportation telegrammed Winko-Matic on April 4, 1984, advising Winko-Matic that it was the apparent low bidder for the Jacksonville project. Subsequently, the awards committee of the Department of Transportation met on April 18, 1984, and determined to reject all bids and re-advertise the job. In the course of this meeting the awards committee was told that there were erratic bids received on contract items, pointing to some perceived confusion among the contractors as to requirements of the contract. Discussion was also held on the possibility of establishing a pre-bid conference if the project was re advertised. The awards committee then voted to reject the bids on the basis that the apparent low bidder, Winko-Matic, had submitted a bid which-was 12.6 percent over the Department's estimate, instead of being within 7 percent of the Department of Transportation's pre-bid estimate, a point above which the Department of Transportation in its non-rule policy would call to question to the acceptability of the apparent low bid. In addition to deciding to reject all bids and re-advertise, it was determined that a pre-bid conference should be scheduled at least 30 days prior to the bid-letting date. Winko-Matic was advised that the Department of Transportation's decision to reject all bids by correspondence of May 4, 1984, in which it was indicated that all bids had been rejected based upon the fact that they were too high. In response to this notice of rejection, Winko-Matic, effective May 17, 1984, filed a written notice of protest. The case was subsequently referred to the Division of Administrative Hearings on June 20, 1984, and a final hearing date was established by Notice of Hearing of July 5, 1984. The hearing date in this cause was September 12, 1984. The Jacksonville project in question requires the utilization of what has been referred to "UTCS Enhanced" software. This software package is unique and has only been used in a limited number of locations within the country. Those locations are Los Angeles, California; San Diego, California; Broward County, Florida; and Birmingham, Alabama. Another unique feature within the project design is the use of an associated coaxial computer sys gem. Given the unique nature of this project and the fact that the Department of Transportation had never advertised for bids related to UTCS software, Department of Transportation obtained assistance from a consulting firm, Harland, Bartholomew & Associates. In fulfilling its function Harland gave estimates to include an estimate related to the projected cost of the software, Item 681-102. The Harland estimate for the overall project was $2,143,130 including a $100,000 estimate for the software system. That estimate relating to the software was subsequently adjusted by the Department of Transportation to depict a cost of $13,780. The Department of Transportation estimate was based upon information within its computer related to a system unlike the enhanced software contemplated by the plans and specifications. In other words, the stored information in the Department of Transportation computer was not the same as contemplated by the plans and specifications in the Jacksonville project. Moreover, the initial estimate of Harland was based upon the idea of an extended software system, as opposed to an enhanced software system. Winko-Matic had bid $389,500 for the software in Item 681-102. That estimate was premised upon figures obtained from JHK and Associates, the group which Winko-Matic intended to use as its subcontractor for the enhanced software portion of the project. JHK developed the software and was responsible for systems integration of the Los Angeles, California, project, one of the locations in which UTCS enhanced software has been utilized. JHK premised its estimate for the software hare upon experience in Los Angeles and an evaluation of the tasks to be performed related to the enhanced software. This included general software development activities, hardware innovation, installation costs during the period of acceptance and testing, and the preparation of data base. The JHK bid price was $339,500. Another $50,000 was added to that price related to what the Petitioner describes as its management costs for that item. By June 20, 1984, when a further meeting was held by the awards committee on the subject of the Jacksonville project, it was concluded that the estimate made by the Department of Transportation of $13,780 was not correct, on the topic of the enhanced software. A more reasonable estimate, according to the information imparted in this session, would be $200,000 for enhanced software as called for in this project, with a $100,000 amount being a reasonable estimate had they chosen to use extended software. Adjusting the initial price related to the UTCS enhanced software to reflect a corrected estimate of the Department of Transportation in its original advertised bid, that estimate becomes $2,210,900.61 and its consultant Harland's estimate becomes $2,243,130. With this adjustment, the differential in the estimate made by the Department of Transportation and the Petitioner approaches 3 percent and not the 12.6 percent originally found. The 3 percent is below the threshold of 7 percent used as the policy for determining whether a bid might be rejected as being far beyond the acceptable limits set forth in the Department of Transportation's estimate. In the aforementioned June 20, 1984, awards committee meeting, the Department of Transportation continued to hold the opinion that all bids in the Jacksonville project should be rejected and the matter re-advertised. Although the problem pertaining to the estimate of the cost of the enhanced software package had been addressed, the committee continued to feel that the prices received in the bid letting were erratic Reference was also made to revisions or modifications to the project plan which would be offered if the matter were re- advertised. It was also pointed out that the Federal Highway Administration would concur in the Department's decision to reject all bids and would accept modifications. The awards committee again voted to reject the bids. The matter was again considered by the awards committee on August 31, 1984. On that occasion, it was pointed out that the revisions contemplated by the Department of Transportation, should the matter be re-advertised, would not affect in a substantial way the cost estimate for the project with the exception of Item 680-101, the system control equipment (CPU), which would promote a lower price for the project. The committee determined in the August, 1984, meeting to reject all bids and re-advertise. While the initial notice of rejection of May 4, 1984, had suggested the basis for rejection as being the fact that Petitioner's bid far exceeded the 7 percent allowance for price above the Department of Transportation's estimate of costs, the meetings of the awards committee and the suggestion of the Respondent in the course of the final hearing in this case indicated that there were other reasons for the decision to reject. Those Were: (a) an apparent lack of clarity among bidders regarding specifications for the Jacksonville job, (b) the desire of the Respondent to revise specifications on the Jacksonville project; and (c) a lack of sufficient competition in the bids. In connection with the first of the additional reasons Respondent suggests that variations within the bid responses related to particular line items within the specifications point out a lack of clarity in the project's specifications or confusion by bidders related to those specifications. Respondent did not bring forth any of the bidders who might speak to the matter of possible confusion or misunderstanding concerning some of the bid items. By contrast, the Petitioner's president; the president of JHK & Associates and James Robinson, Harland's project manager for the Jacksonville job, did not find the specifications in the original documents to be confusing. In addition, the testimony of those individuals established the fact that bid variations related to particular line items are not extraordinary and do not establish any apparent confusion by the bidders as to the requirements of those line items. In effect, what the differentials demonstrate are variations related to the manufacture or in-house capabilities of the bidders and an effort to allocate discretionary costs in various places as to line items. Moreover, they might indicate last- minute adjustments in the bid quote prior to the opening and a possible effort by a contractor to enter into a new job market. Finally, they demonstrate offsetting which is the allocation of item prices by a contractor to maximize profits. To do this, a contractor submits high bids on items representing quantities which the contractor feels will increase after the contract is awarded and submits low bids on items representing quantities which are not likely to change. In summary, while the Department of Transportation in its presentation expressed some concern about the variations in the pricing in the bid quotations offered by the respective bidders in this project, its suspicions on the question of the possible clarity of its specifications were not confirmed and are not convincing. On the topic of revisions which the Department of Transportation would offer if the matter were re-advertised, with one exception those matters appear to be items that could be attended through change orders or supplemental agreements. They are not matters which necessarily must be addressed through a rejection of all bids and a re-advertising of the project. The lone exception to this is the possibility that the Department of Transportation may not be able to protect its proprietary rights in the enhanced software which is being developed for the project, under the terms of the present bid documents. Given that uncertainty, the Respondent would wish to re-advertise the project and make certain that its proprietary interests are protected. Finally, Respondent has alluded to the fact that the Jacksonville project should be re-advertised in view of the lack of competition in the initial letting. Only four bidders expressed an interest in this project at the time of the first letting. Of those, two bidders were found to be responsive. While this is a low number of bidders, there does not appear to be any agency practice on the part of' the Department of Transportation to the effect that this number of bidders would not be accepted. Moreover, no indication has been given that should the matter be re-advertised a greater number of bidders would express an interest than was the case in the first letting. Consequently, this reason for bid rejection is not acceptable. If Respondent did not reject the bids and re-advertise the project, Winko-Matic would be the successful bidder in the Jacksonville project.
The Issue The issue in this case is whether Respondent properly rejected the bid of Petitioner.
Findings Of Fact Respondent issued on February 28, 1990, an invitation to bid concerning the installation of bleachers at a high school ("ITB"). The ITB was duly advertised. Among the bidders was Interkal, Inc., which is a manufacturer of bleachers. The Interkal bid, which was timely submitted, was executed by its president. The Interkal bid contained a bid bond naming Interkal as principal and a certification from the secretary of Interkal reflecting a corporate resolution authorizing the execution of all bid documents on behalf of Interkal by its corporate officers. The Interkal bid disclosed two subcontractors. The supplier was shown as Interkal, and the erector was shown as Petitioner. Petitioner is the authorized factory representative for Interkal in Florida. As such, Petitioner solicits business and installs and removes bleachers on behalf of Interkal. As compensation, Petitioner receives commissions for such work from Interkal. However, the shareholder and chief executive officer of Petitioner is not a shareholder or officer of Interkal. In addition, Petitioner is not authorized to execute bid documents on behalf of Interkal. Petitioner is no more than a Subcontrator of Interkal. The bidder in this case was Interkal, not Petitioner, even though Petitioner handled much of the paperwork or its manufacturer. When an unrelated bidder was awarded the contract, Petitioner filed a formal written protest in its name. Interkal has not participated as a party in the subject proceeding.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that Respondent enter a Final Order dismissing the petition of Diversified Design Enterprises. ENTERED this 22nd day of May, 1990, in Tallahassee, Florida. ROBERT D. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of May, 1990. COPIES FURNISHED: Ned N. Julian Stenstrom, McIntosh, et al. P.O. Box 1330 Sanford, FL 32772-1330 William Merkel, President Diversified Design Enterprises 321 N.E. Second Avenue Delray Beach, FL 33444 Robert W. Hughes, Superintendent Seminole County School Board 1211 Mellonville Avenue Sanford, FL 32771
The Issue The issue in this case is whether the Department of Transportation's proposed award of a contract to Daniels Janitorial Service is contrary to the agency's governing statutes, the agency's rules or policies, or the specifications of the Invitation to Bid (ITB).
Findings Of Fact In April 2004, DOT issued ITB-DOT-04/05-5002-PDW (the ITB) seeking to contract for janitorial services at two state office buildings in DeLand, Florida. The ITB included a "bid blank," upon which vendors were directed to submit their cost proposals. The bid blank was titled "MONTHLY JANITORIAL SERVICES PER SCOPE OF SERVICES." The bid blank included three spaces where each bidder was to provide cost information. The three spaces were titled as follows: "MONTHLY CLEANING - BUILDING 5000 - X 12 MONTHS," "MONTHLY CLEANING - BUILDING 5001 - X 12 MONTHS," and "TOTAL YEARLY AMOUNT BOTH BUILDINGS." In response to the ITB, DOT received 18 bids. The bids were opened at 3:00 p.m. on April 29, 2004. The lowest bid was $5,185.76, submitted by Daniels Janitorial Service, including: $4,895.76 for "MONTHLY CLEANING - BUILDING 5000 - X 12 MONTHS," $200.00 for "MONTHLY CLEANING - BUILDING 5001 - X 12 MONTHS," and $5,186.76 identified as "TOTAL YEARLY AMOUNT BOTH BUILDINGS." The second lowest bid was $10,686.00, submitted by Jan-Pro Cleaning Systems, including: $9,971.00 for "MONTHLY CLEANING - BUILDING 5000 - X 12 MONTHS," $715.00 for "MONTHLY CLEANING - BUILDING 5001 - X 12 MONTHS," and $10, 686.00 identified as "TOTAL YEARLY AMOUNT BOTH BUILDINGS." The third lowest bid was $67,777.77, submitted by the Petitioner. The remainder of the bids ranged between $69,600.00 to as much as $201,464.64. At the time of the opening, Diane Warnock, a DOT District Contract Specialist and Purchasing Agent in charge of the bid opening, observed that two of the bids (the Daniels Janitorial Service and the Jan-Pro Cleaning Systems bids) appeared to be very low in relation to the other bids. Ms. Warnock believed that the two lowest bids submitted were likely set forth on a monthly basis rather than annual amount, and that the bidders had failed to extend the monthly charges to an annual cost. Ms. Warnock contacted David Callaway, a DOT Procurement Analyst with statewide contract responsibilities, to discuss her observations. Mr. Callaway advised Ms. Warnock that she could contact the two low bidders and ascertain whether the bids submitted reflected a monthly or an annual cost. Ms. Warnock separately contacted each of the individuals responsible for submitting the low bids and inquired as to whether the bids reflected a monthly cost or an annual cost. Ms. Warnock learned that each vendor had submitted a monthly bid amount. Ms. Warnock multiplied the monthly amounts submitted by the two vendors by 12 to arrive at an annual cost. On the bid tabulation form, Ms. Warnock included the bid amount submitted by each bidder. For the two bidders who submitted monthly cost information, Ms. Warnock included the monthly costs submitted and the annual cost figures she had calculated. Based on annual costs, the lowest vendor was Daniels Janitorial Service with an annual bid amount of $62,229.12. Section 13.2 of the ITB provides as follows: 13.2 RESPONSIVENESS OF BIDS Bids will not be considered if not received by the Department on or before the date and time specified as the due date for submission. All bids must be typed or printed in ink. A responsive bid is an offer to perform the scope of services called for in this Invitation to Bid in accordance with all requirements of this Invitation to Bid. Bids found to be non- responsive will not be considered. Bids may be rejected if found to be irregular or not in conformance with the requirements and instructions herein contained. A bid may be found to be irregular or non-responsive by reasons that include, but are not limited to, failure to utilize or complete prescribed forms, modifying the bid requirements, submitting conditional bids or incomplete bids, submitting indefinite or ambiguous bids, or executing forms or the bid sheet with improper and/or undated signatures. Section 13.4 of the ITB provides as follows: 13.4 WAIVERS The Department may waive minor informalities or irregularities in bids received where such is merely a matter of form and not substance, and the correction or waiver of which is not prejudicial to other bidders. Minor irregularities are defined as those that do not have an adverse effect on the Department's interest and does not effect the price of the bid by giving a bidder an advantage or benefit not enjoyed by other bidders.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Transportation enter a final order awarding the contract for ITB-DOT-04/05- 5002-PDW to Daniels Janitorial Service. DONE AND ENTERED this 25th day of August, 2004, in Tallahassee, Leon County, Florida. WILLIAM F. QUATTLEBAUM 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 25th day of August, 2004. COPIES FURNISHED: C. Denise Johnson, Esquire Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0450 Anthony Payne 1031 Eagles Forrest Drive Apopka, Florida 32712 James C. Myers, Clerk of Agency Proceedings Department of Transportation 605 Suwannee Street Haydon Burns Building, Mail Stop 58 Tallahassee, Florida 32399-0450 Pamela Leslie, General Counsel Department of Transportation 605 Suwannee Street Haydon Burns Building, Mail Stop 58 Tallahassee, Florida 32399-0450
The Issue The first issue to be determined is whether the BOARD can reject all bids, with or without cause. The second issue is to determine if the BOARD is required to have cause, was there a sufficient basis for the rejection of all bids in Bid NO. 3996?
Findings Of Fact On December 14, 1987, the BOARD sent invitations to bid to a list of approved vendors in Bid NO. 3996. The purpose of the invitation was to obtain the lowest responsible bid on a purchase of one hundred and fifty typewriters. The bids were to be submitted prior to January 11, 1988 at 2:00 P.M.. They were opened by the BOARD on the same day. OFFICE did not receive an invitation to bid despite its request to be placed on the approved vendor's list in November of 1987. When OFFICE learned of the outstanding invitation to bid, its representative, Mr. Richard Foss, went to the BOARD's Purchasing Department and requested a bid package. The bid documents given to OFFICE mistakenly gave January 14, 1988 at 2:00 P.M. as the deadline for the bid submission. Because of the later date given by the BOARD to OFFICE, the company's bid was received after the opening of the bids. When the results of the bidding were made known at the public bid opening, NAPLES bid was the lowest received. On January 14, 1988, after 10:42 A.M., it was discovered by the BOARD that OFFICE's bid price was lower than the price submitted by NAPLES. At this time, NAPLES bid had not yet been accepted by the BOARD, and no formal announcement had been made awarding the contract to NAPLES. During the BOARD's Purchasing Department's bid analysis, a request was made to reject all bids in Bid NO. 3996. The reason given by Purchasing for the request for rejection was that the specifications were being revised. The bids were rejected on the same date. The written reason sent to the vendors on January 14, 1988 for the bid rejection was that one vendor had been given an incorrect opening date. Attached to the written notice to the vendors was a new bid invitation for Bid NO. 4013. The BOARD explained its mistake was unfair to the one vendor. A new bid opening date was given of February 1, 1988. On January 14, 1988, in addition to the required bid documents, OFFICE submitted a letter which listed additional offerings or incentives that OFFICE would give the BOARD if OFFICE was awarded the contract. These additional purchasing incentives were: wall charts and teacher/student manuals for each typing classroom in the county. OFFICE also informed the BOARD that one of the BOARD's own service personnel was already trained in the servicing of Swintec typewriters. The bid submitted by OFFICE did not meet either the weight or the print wheel specifications as set forth in Bid NO. 3996. The specifications as written in Bid NO. 3996 were not written to eliminate all other typewriters but the Brothers 511-11. Weight specifications required were below the Brother's minimum weight, and at least two other manufacturers provide protected drop-in cassette print wheels in electronic typewriters. The Invitation to Bid contained specific provisions which encouraged the bidding of typewriters other than the Brother 511-11, and set up procedures under which other typewriters, which substantially meet the specifications, could be reviewed on their merits. NAPLES was the lowest responsible bidder for the electronic typewriter contract in the prior school year. The BOARD had rejected all bids at that time because of the decision to consider a different brand of typewriter once bids were opened. A notice of protest was filed by NAPLES, and the BOARD agreed to honor NAPLES bid and award the company the contract. The BOARD revised its bid specifications from last year prior to its solicitations for bids in Bid NO. 3996. The protected drop-in cassette print wheel and the weight requirements were two new technical specifications. During the hearing, the BOARD was unable to determine whether the weight factor or the protected drop-in cassette print wheel requirement will continue to be included in future revisions of the specifications.
Recommendation Based on the foregoing, it is RECOMMENDED: That the BOARD reject the bid submitted by OFFICE as it was nonconforming and sought an advantage not enjoyed by the other bidders. Reinstate the bids which were rejected in Bid NO. 3996, consider the bids, and make an award of the contract to NAPLES. DONE and ENTERED this 30th day of March, 1988, in Tallahassee, Florida. VERONICA D. DONNELLY 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 30th day of March, 1988. COPIES FURNISHED: Stephen Emens, President Naples Business Equipment and Systems, Inc. 859 4th Avenue South Naples, Florida 33940 Harry A. Blair, Esquire 2138-40 Hoople Street Ft. Myers, Florida 33901 Richard Foss, Typewriter Sales Manager 8A-Del Prado Boulevard Cape Coral, Florida 33904 Karl Engel, Superintendent Lee County Public Schools The School Board of Lee County 2055 Central Avenue Fort Myers, Florida 33901
The Issue Whether Respondent acted contrary to the agency's governing statutes, rules, or policies or the bid specifications in its proposed decision to award Contract No. T7380 to Astaldi Construction Corporation ("Astaldi").
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, and on the entire record of the proceeding, the following Findings of Fact are made: The Department is a state agency authorized by section 337.11 to contract for the construction and maintenance of roads within the State Highway System, the State Park Road System, and roads placed under its supervision by law. The Department is specifically authorized to award contracts under section 337.11(4) to “the lowest responsible bidder.” On April 15, 2016, the Department advertised a bid solicitation for Contract T7380, seeking contractors for the widening of a 3.8 mile portion of U.S. Highway 301 in Hillsborough County from two lanes to six lanes between State Road 674 and County Road 672 and over Big Bull Frog Creek. The advertisement provided a specification package for the project and the “Standard Specifications for Road and Bridge Construction” (“Standard Specifications”) used on Department roadway projects. The work included seven components: bridge structures (Section 0001), roadway (Section 0002), signage (Section 0003), lighting (Section 0004), signalization (Section 0005), utilities (Section 0006), and intelligent transportation systems (Section 0007). The advertisement identified 666 individual items of work to be performed and quantity units for each item. The project was advertised as a low-bid contract with a budget estimate of $51,702,729. The Department’s bid proposal form contains five columns with the following headings: Line Number; Item Number and Item Description; Approximate Quantities and Units; Unit Price; and Bid Amount. The bid proposal form contains line items for the seven components of the project. The utilities component contains 42 line items, each with an Item Number and Item Description. For example, Line Number 1410 corresponds with the following Item Number and Item Description: “1050 11225 Utility Pipe, F&I, PVC, Water/Sewer, 20–40.9 [inches].” Each bidder inserts a Unit Price for the line item in the corresponding “Unit Price” column. The “Bid Amount” column for each line item is an amount generated by multiplying a bidder’s Unit Price by the Quantities (determined by the Department) for each Line Number. The Bid Amount for each Line Number is then added together to generate the “Total Bid Amount” representing the bid for the entire project. Astaldi, Prince, Hubbard, and other potential bidders attended the mandatory pre-bid meeting. Prequalified contractors were given proposal documents that allowed them to enter bids through Bid Express, the electronic bidding system used by the Department. Plan revisions were issued by addenda dated May 10, 2016, and June 7, 2016. A Question and Answer Report was published and updated as inquiries were addressed. Bids were opened on the letting date of June 15, 2016. Bids for Contract T7380 were received from Astaldi, Prince, Hubbard, the DeMoya Group (“DeMoya”), Ajax Paving Industries of Florida, LLC (“Ajax”), and Cone & Graham, Inc. (“Cone & Graham”). The bids were reviewed by the Department’s contracts administration office to ensure they were timely, included a Unit Price for each line item, and contained the completed certifications required by the specifications. Bidders were checked against the Department’s list of prequalified bidders to confirm they possessed a certification of qualification in the particular work classes identified by the bid solicitation. Each bidder’s total current work under contract with the Department was examined to ensure that award of Contract T7380 would not place the bidder over its Department-designated financial capacity limit. Astaldi submitted the lowest bid, a total amount of $48,960,013. Prince submitted the next lowest bid, a total amount of $57,792,043. Hubbard’s total bid was the third lowest at $58,572,352.66. The remaining bidders came in as follows: DeMoya, $63,511,686.16; Ajax, $68,617,978.10; and Cone & Graham, $70,383,697.74. All bidders were prequalified in the appropriate work classes and had sufficient financial capacity, in accordance with section 337.14 and Florida Administrative Code Chapter 14-22. The Department’s construction procurement procedure, from authorization to advertisement through contract execution, is outlined in the Department’s “Road and Bridge Contract Procurement” document (“Contract Procurement Procedure”). The scope statement of the Contract Procurement Procedure provides: “This procedure applies to all Contracts Administration Offices responsible for advertising, letting, awarding, and executing low bid, design-bid-build, construction, and maintenance contracts.” Limited exceptions to the procedure may be made if approved by the assistant secretary for Engineering and Operations. If federal funds are included, the Federal Highway Administration division administrator, or designee, must also approve any exceptions from the procedure. The stated objectives of the Contract Procurement Procedure are: “to standardize and clarify procedures for administering low-bid, design-bid-build, construction, and maintenance contracts” and “to provide program flexibility and more rapid response time in meeting public needs.” The Department’s process for review of bids is set forth in the “Preparation of the Authorization/Official Construction Cost Estimate and Contract Bid Review Package” (“Bid Review Procedure”). The scope statement of the Bid Review Procedure states: This procedure describes the responsibilities and activities of the District and Central Estimates Offices in preparing the authorization and official construction cost estimates and bid review packages from proposal development through the bid review process. Individuals affected by this procedure include Central and District personnel involved with estimates, specifications, design, construction, contracts administration, work program, production management, federal aid, and the District Directors of Transportation Development. The Bid Review Procedure contains a definitions section that defines several terms employed by the Department to determine whether a bid or a unit item within a bid is “unbalanced.” Those terms and their definitions are as follows: Materially Unbalanced: A bid that generates reasonable doubt that award to that bidder would result in the lowest ultimate cost or, a switch in low bidder due to a quantity error. Mathematically Unbalanced: A unit price or lump sum bid that does not reflect a reasonable cost for the respective pay item, as determined by the department’s mathematically unbalanced bid algorithm. Official Estimate: Department’s official construction cost estimate used for evaluating bids received on a proposal. Significantly Unbalanced: A mathematically unbalanced bid that is 75% lower than the statistical average. Statistical Average: For a given pay item, the sum of all bids for that item plus the Department’s Official Estimate which are then divided by the total number of bids plus one. This average does not include statistical outliers as determined by the department’s unit price algorithm. For every road and construction project procurement, the Department prepares an “official estimate,” which is not necessarily the same number as the “budget estimate” found in the public bid solicitation. The Department keeps the official estimate confidential pursuant to section 337.168(1), which provides: A document or electronic file revealing the official cost estimate of the department of a project is confidential and exempt from the provisions of s. 119.07(1) until the contract for the project has been executed or until the project is no longer under active consideration. In accordance with the Bid Review Procedure, the six bids for Contract T7380 were uploaded into a Department computer system along with the Department’s official estimate. A confidential algorithm identified outlier bids that were significantly outside the average (such as penny bids) and removed them to create a “statistical average” for each pay item. Astaldi’s unit pricing was then compared to the statistical average for each item. The computer program then created an “Unbalanced Item Report,” flagging Astaldi’s “mathematically unbalanced” items, i.e., those that were above or below a confidential tolerance value from the statistical average. The unbalanced item report was then reviewed by the district design engineer for possible quantity errors. No quantity errors were found.1/ The Department then used the Unbalanced Item Report and its computer software to cull the work items down to those for which Astaldi’s unit price was 75 percent more than or below the statistical average. The Department sent Astaldi a form titled “Notice to Contractor,” which provided as follows: The Florida Department of Transportation (FDOT) has reviewed your proposal and discovered that there are bid unit prices that are mathematically unbalanced. The purpose of this notice is to inform you of the unbalanced nature of your proposal. You may not modify or amend your proposal. The explanation of the bid unit prices in your proposal set forth below was provided by ASTALDI CONSTRUCTION CORPORATION on ( ) INSERT DATE. FDOT does not guarantee advanced approval of: Alternate Traffic Control Plans (TCP), if permitted by the contract documents; Alternative means and methods of construction; Cost savings initiatives (CSI), if permitted by the contract documents. You must comply with all contractual requirements for submittals of alternative TCP, means and methods of construction, and CSI, and FDOT reserves the right to review such submittals on their merits. As provided in section 5-4 of the Standard Specifications for Road and Bridge Construction you cannot take advantage of any apparent error or omission in the plans or specifications, but will immediately notify the Engineer of such discovery. Please acknowledge receipt of this notice and confirmation of the unit bid price for the item(s) listed below by signing and returning this document. Section 5.4 of the Bid Review Procedure describes the Notice to Contractor and states: “Contracts are not considered for award until this form has been signed and successfully returned to the Department per the instruction on the form.” State estimating engineer Greg Davis testified that the stated procedure was no longer accurate and “need[s] to be corrected” for the following reason: Since the procedure was approved back in 2011, we’ve had some subsequent conversations about whether to just automatically not consider the award for those that are not signed. And since then we have decided to go ahead and just consider the contract, but we are presenting a notice, of course, unsigned and then let the technical review and contract awards committee determine. Astaldi signed and returned the Notice to Contractor and noted below each of the ten listed items: “Astaldi Construction confirms the unit price.” Mr. Davis explained that the purpose of the Notice to Contractor form is to notify the contractor that items have been identified as extremely low and to ask the contractor to confirm its understanding that in accepting the bid, the Department will not necessarily approve design changes, methods of construction, or maintenance of traffic changes. Section 6.6 of the Contract Procurement Procedure sets forth the circumstances under which an apparent low bid must be considered by the Department’s Technical Review Committee (“TRC”) and then by the Contract Awards Committee (“CAC”). Those circumstances include: single bid contracts; re-let contracts; “significantly mathematical unbalanced” bids; bids that are more than 25 percent below the Department’s estimate; 10 percent above the Department’s estimate (or 15 percent above if the estimate is under $500,000); materially unbalanced bids, irregular bids (not prepared in accordance with the Standard Specifications); other bid irregularities2/; or “[a]ny other reason deemed necessary by the chairperson.”3/ Bids that are not required to go before the TRC and CAC are referred to as “automatic qualifiers.” Because it was mathematically unbalanced, the Astaldi bid was submitted to the TRC for review at its June 28, 2016, meeting. The TRC is chaired by the Department’s contracts administration manager, Alan Autry, and is guided by a document entitled “Technical Review Committees” (“TRC Procedure”). The TRC Procedure sets forth the responsibilities of the TRC in reviewing bid analyses and making recommendations to the CAC to award or reject bids. The TRC voted to recommend awarding Contract T7380 to Astaldi. The TRC’s recommendation and supporting paperwork was referred to the CAC for its meeting on June 29, 2016. The duties of the CAC are described in a document entitled “Contracts Award Committees” (“CAC Procedure”). Pursuant to the CAC Procedure, the CAC meets approximately 14 days after a letting to assess the recommendations made by the TRC and determines by majority vote an official decision to award or reject bids. Minutes for the June 29, 2016, CAC meeting reflect 21 items before the committee including: two single bid contracts; four bids that were 10 percent or more above the official estimate; one bid that was 15 percent or more above the official estimate on a project under $500,000; three bids that were more than 25 percent below the official estimate; and 11 bids with significantly unbalanced items, including Contract T7380 with an intended awardee of Astaldi. The CAC voted to award Contract T7380 based on the low bid submitted by Astaldi. A Notice of Intent to award the contract to Astaldi was posted on June 29, 2016. As noted at Finding of Fact 2, supra, Contract T7380 consisted of seven components: structures, roadway, signage, lighting, signalization, utilities, and intelligent transportation system. The Department does not compare bids by component, but looks at the total bid amount to find the lowest bidder. The Department also reviews the bids for discrepancies in individual unit items using the process described above. Astaldi’s bid of $48,960,013 was approximately $8.8 million below Prince’s bid of $57,792,043, $9.6 million less than Hubbard’s bid of $58,572,352, and $2.7 million below the Department’s public proposal budget estimate of $51,702,729. As part of its challenge to the intended award, Prince performed a breakdown of bids by individual components and discovered that nearly all of the differences between its bid and Astaldi’s could be attributed to the utilities component. Astaldi’s bid for the utilities component was $7,811,720, which was roughly $8.5 million below Prince’s utilities bid of $16,305,903 and $5.8 million below Hubbard’s utilities bid of $13,603,846.4/ The utilities component was included pursuant to an agreement between the Department and Hillsborough County, the owner of the water and sewer lines, relating to the improvement of water and sewer lines along the roadway limits of the project. The utility work consists of installing a new water- line and force main sewer. The existing water main and the existing force main conflict with the proposed location of the new storm drainage system. The new water main and force main must be installed, tested, and approved before being put into active service. To prevent water utility outages to customers, the new system must be installed and approved before the existing waterline and existing force main can be cut off and removed. Utility work is therefore the first task to be performed on Contract T7380. Once the utility component is completed, the contractor will furnish and install the stormwater system, the roadway, the bridgework, and all other components. Article 3-1 of the Standard Specifications5/ reserves to the Department the right to delete the utility relocation work from the contract and allow the utility owner to relocate the utilities. Utilities are the only portion of a Department contract subject to deletion because the funding is provided by the utility owner, which usually has allocated a certain dollar figure to contribute towards the contract prior to the bidding. If the bid for utilities comes in over the utility owner’s budget, the owner can opt out of the contract and self-perform. In this case, Hillsborough County had contracted with the Department to contribute $8.9 million for utility relocation work. The Department did not exercise the option to delete the utilities portion of the contract. Jack Calandros, Prince’s chief executive, testified that Prince uses a computer program called HeavyBid, created and supported by a company called HCSS, to build the cost components of its bids. Every witness with industry knowledge agreed that HeavyBid is the standard program for compiling bids in the construction field. Mr. Calandros testified that cost components include material quotes provided by third-party vendors and quotes from potential subcontractors. Labor and equipment costs are ascertained by using historical rates and actual cost estimates that are tracked by the HeavyBid software. Prince maintains its own database of costs derived from 20 years’ experience. Mr. Calandros stated that Prince’s internal labor and equipment rates are checked and adjusted at least once a year to ensure they are current and accurate based on existing equipment and personnel. Prince received three vendor quotes for the materials to perform the utility work on Contract T7380. In compiling its bid, Prince ultimately relied on a final quote from Ferguson Waterworks (“Ferguson”) of $8,849,850. Based on this materials quote and Prince’s overall utilities bid of $16,305,903, Mr. Calandros opined that it would not be possible for Astaldi to perform the utilities component for its bid amount of $7.8 million. Prince’s estimating expert, John Armeni, reviewed Astaldi’s bid file, read the deposition testimony of Astaldi’s chief estimator, Ed Thornton, and spoke to Mr. Thornton by telephone. Mr. Armeni also reviewed Prince’s bid and the bid tabulation of all bidders’ utilities component line items. Based on his review and his extensive experience in the industry, Mr. Armeni concluded that Astaldi’s bid does not include all costs for labor, material, and equipment necessary to construct the utilities portion of this project. Mr. Armeni reviewed the materials quote from Ferguson that Prince used in its bid. He noted that Astaldi’s bid file contained an identical quote from Ferguson of $8.8 million for materials, including some non-utilities materials. Mr. Armeni noted that the Ferguson quote for utilities materials alone was approximately $8 million, an amount exceeding Astaldi’s entire bid for the utilities portion of the project. Mr. Armeni also noted that Astaldi’s overall bid was 18 percent below that of the second lowest bidder, Prince. He testified that 18 percent is an extraordinary spread on a bid where the Department is providing the quantities and all bidders are working off the same drawings and specifications. Mr. Armeni believed that the contracting authority “should start looking at it” when the difference between the lowest and second lowest bidder is more than 10 percent. In his deposition, Mr. Thornton testified he was not aware of how Astaldi arrived at its bid prices for the utility section of the project. Mr. Thornton indicated multiple times that he was not Astaldi’s most knowledgeable person regarding the bid submitted by Astaldi on Contract T7380 project. He testified that Astaldi intended to subcontract the utilities work and acknowledged that the company received a subcontractor quote of $14.9 million after the bids were submitted. Mr. Thornton did not know if Astaldi had solicited the quote. He said it is not unusual for a company to receive subcontractor bids after it has been named the low bidder on a project. Mr. Thornton conceded that Astaldi’s bid did not include all the costs necessary to construct the utilities portion of Contract T7380. At his deposition, he did not have before him the materials needed to determine which items of cost Astaldi had omitted. Mr. Thornton testified that Astaldi was not missing any information it needed at the time of bid submission and understood that its price was to include all labor, materials, and subcontracting costs to perform the contract. After the proposed bid award, Astaldi used HeavyBid to produce a report indicating that the company now estimates its cost of performing the contract at $53,708,129.03, or roughly $4.75 million more than its winning bid. Mr. Thornton testified that Astaldi nonetheless stood ready to execute the contract and perform the work at its bid price. Central to the dispute in this case is Standard Specifications Section 9, “Measurement and Payment,” article 9-2 of which is titled “Scope of Payments.” In particular, subarticle 9-2.1 provides: 9-2.1 Items Included in Payment: Accept the compensation as provided in the Contract as full payment for furnishing all materials and for performing all work contemplated and embraced under the Contract; also for all loss or damage arising out of the nature of the work or from the action of the elements, or from any unforeseen difficulties or obstructions which may arise or be encountered in the prosecution of the work until its final acceptance; also for all other costs incurred under the provisions of Division I. For any item of work contained in the proposal, except as might be specifically provided otherwise in the payment clause for the item, include in the Contract unit price (or lump sum price) for the pay item or items the cost of all labor, equipment, materials, tools and incidentals required for the complete item of work, including all requirements of the Section specifying such item of work, except as specially excluded from such payments. Prince contends that the second paragraph of subarticle 9-2.1 renders Astaldi’s bid nonresponsive because Astaldi admittedly failed to include “the cost of all labor, equipment, materials, tools and incidentals” in its bid. Prince points out that the “Technical Special Provisions” governing the utilities portion of the project reinforce the requirement that each bidder include all costs for the work. Technical Special Provisions Section 1-7.1 provides that “[p]ipe installation cost shall include all necessary work, equipment, and labor needed for installing the pipe, such as, coordination with existing utilities and support during construction and support of existing power poles during construction.” Technical Special Provisions Section 1-8.1 goes on to say that “[n]o separate payment will be made for the following items for work under this Technical Special Provision and the cost of such work shall be included in the applicable contract pay items of work,” followed by a comprehensive list of 30 items. Prince concludes that the requirement that each bidder include all costs, including costs of all necessary labor, equipment, and materials, in the Unit Price for each work item is “manifest” in the bid specifications and requires rejection of any bid that does not include all costs. Mr. Armeni opined that if one bidder excludes a portion of its costs, the other bidders are placed at a competitive disadvantage. Alan Autry, the Department’s central contracts administration manager, testified that five other projects were let as part of the bid package that included Contract T7380. He stated that it is typical for the Department to list multiple projects on one day. Mr. Autry’s office usually performs one bid letting per month, with the holiday months of November and December rolled together in a single letting. Mr. Autry stated that his office lets between 200 and 300 projects per year, not counting contracts that are let at the district level. Twenty other contracts were before the CAC at the June 29, 2016, meeting at which the Astaldi award in this case was approved. As noted at Finding of Fact 2, supra, Contract T7380 included 666 line items. Six companies submitted bids, meaning there were a total of 3,996 line items in this single contract. Assuming that the 200 to 300 other projects let by the Department’s Tallahassee office contain similar numbers, there are more than one million line items bid in any given year. If Prince’s reading of the bid specifications is correct, the Department is required to examine each of these line items and somehow make a determination whether the item includes all of the bidder’s costs. This problem of determining bidder cost is complicated by the presence of “companion” or “sister” items in bids, i.e., two items that must be considered in tandem to arrive at something like the actual cost of the work. Prince provided an example of such companion items in its analysis of the bids in this project. Two bid items included in the structures section of the bid proposal form were concrete culverts and reinforcing steel. The contractor may cast the culverts in place at the worksite or purchase them precast. If the concrete culvert is cast in place at the worksite, then reinforcing steel must be used to strengthen the culvert. If the concrete culvert is precast by a materials supplier, then the reinforcing steel has already been incorporated into the culvert at the time of installation. Mr. Calandros explained that when a contractor uses precast culverts, there is no need to list a separate additional cost for reinforcing steel; all costs are captured in the line item for concrete culverts. In this bid, Prince used precast culverts and therefore bid a penny per unit for reinforcing steel.6/ Bidders who cast the culverts in place showed a much higher cost for reinforcing steel but a lower cost for the concrete culverts. When the “companion items” were considered in tandem, the total cost for each vendor was fairly consistent. Prince’s explanation for companion items was coherent but did not explain how the Department is supposed to know which items are companion items as it undertakes the line-by-line cost examination of each bid in accordance with Prince’s reading of the bid specifications. Prince also failed to provide an explanation as to how the Department is to determine a bidder’s costs for any one line item or, for that matter, for its overall bid on a project. Bidders consider their cost information and the processes by which they build bids to be confidential proprietary information. In the instant case, Prince disclosed its own information (aside from materials costs) only under seal during litigation. In its ordinary course of business, the Department does not have access to this information. In fact, as noted at Finding of Fact 23, supra, the Department does not compare bids by component. It looks only at the total bid amount in determining the lowest bidder. Standard Specifications Article 3-8 reserves to the Department the right to perform an audit of the contractor’s records pertaining to the project upon execution of the contract. No authorization is provided to audit records of bidders prior to contracting. Standard Specifications Subarticle 2-5.1 allows bidders to indicate “free” or “$.00” for items that will be supplied at no cost to the Department. Though the Department’s practice, according to Mr. Autry, is to include zero bid items on the Notice to Contractor for confirmation of the price, subarticle 2-5.1 requires no Department investigation as to whether the bidder’s cost for a zero bid is actually zero. Bidders often bid a penny on items, as Prince did on reinforcing steel in this case. Standard Specifications Article 3-5 requires all contracts to be secured by a surety bond such that, in the event of a default by the contractor, the surety company will indemnify the Department on all claims and performance issues. Standard Specifications Section 4 provides that the scope of work is to be determined within the contract, including the furnishing of all labor, materials, equipment, tools, transportation, and supplies required to complete the work. The Department is authorized to make changes to the scope of work and make equitable adjustments of payments. If necessary, the Department may enter into supplemental agreements for additional or unforeseen work. Prince cautions that these change provisions could become relevant because Astaldi’s bid contains no information explaining how Astaldi will cover the $4.75 million difference between its bid price and its actual cost to perform the contract. Prince accurately states that nothing in Astaldi’s bid demonstrates that it has cash reserves to cover the loss and still complete the entire scope of the work.7/ Prince contends that this lack of demonstrable reserves renders Astaldi nonresponsible as to this project. Prince argues that it is error for the Department to rely on Astaldi’s certificate of qualification as proof of the company’s responsibility. The certificate of qualification process considers a contractor’s financial status at the time it submits its financial statements and other information regarding company resources. Prince contends that the Department’s assessment of the contractor’s financial statements and issuance of a certificate of qualification is insufficient to determine the contractor’s responsibility on a given bid. Prince argues that the Department is required by its governing statutes and the Standard Specifications to award a particular contract to the particular bidder that is the lowest, responsive, and responsible bidder, and that “responsible” for a given project is not synonymous with “prequalified.” Prince hypothesizes that under the Department’s practice, a bidder could possess a certificate of qualification issued in January, be indicted in another state for fraud and bribery in February, submit the lowest bid for a Department project in March, and be awarded the contract. By relying solely on the bidder’s certificate of qualification to determine responsibility, the Department could award a contract to a nonresponsible bidder. Section 337.14 provides that any person desiring to bid on any construction contract in excess of $250,000 must first be certified by the Department. Mr. Autry explained that the Department prequalifies contractors to submit bids on certain types of contract, such as major bridges and structures. Contractors applying for certification are required to submit their latest annual financial statements. The Department is charged with reviewing applications to determine “whether the applicant is competent, is responsible, and possesses the necessary financial resources to perform the desired work.” § 337.14(3), Fla. Stat. The Department assigns the contractor work classes and a total capacity after evaluating its experience and financials. The Department’s certificate is good for 18 months, though the contractor’s capacity is reviewed annually. At the time of a particular bid, the Department verifies the contractor’s available capacity, which is simply its total assigned capacity minus current work the contractor is performing for the Department. Mr. Autry testified that the Department does not go back and look at a bidder’s financials to determine whether it can sustain a loss on a given project. The Department does not repeat its capacity analysis during the year, regardless of how many projects the company bids on. The Department’s analysis is limited to whether the company’s current capacity is sufficient for the project on which it is bidding.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Transportation enter a final order dismissing Prince Contracting, LLC’s, second amended formal written protest and awarding Contract T7380 to Astaldi Construction Corporation. DONE AND ENTERED this 22nd day of December, 2016, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of December, 2016.
The Issue The issue for consideration herein is whether the Respondent's proposed award on BID No. HSMV - 90022010 to Dunn Construction Company, Inc., should be upheld.
Findings Of Fact At all times pertinent to the issues herein, the Department was the state agency responsible for the solicitation of bids for and award of contracts for the construction of state buildings in Florida. Both Greenhut and Dunn are qualified contractors who are certified to bid on state construction contracts in general and this procurement in particular. In December, 1991, the Department issued an advertisement for bids for the project in issue herein, the construction of the Kirkman Complex Addition Data Center in Tallahassee, Florida. According to the Advertisement for Bids, all bids "must be submitted in full accordance with the requirements of the Drawings, Specifications, Bidding Conditions and Contractual Conditions, which may be examined and obtained ..." from the Department's designated architect/engineer, Clemons, Rutherford and Associates, Inc. in Tallahassee. Section B-21 of the request for proposals (invitation to bid) reads, in pertinent part: 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 Owner reserves the right to waive any informality in bids received when such waiver is in the interest of the owner. Bids received on this project were originally scheduled to be opened and read aloud on January 15, 1992 with the tabulation and Bid Award Recommendation to be posted the following days at the location where the bids were opened. The proposal as originally issued called for the submittal of a Base Bid with four Alternates, 1a, 1b, 2, and 3. Alternate 1a was a deduct for merely extending the existing Johnson Controls System to incorporate the new work instead of providing a totally new and independent control system. Alternate 1b called for adding furniture and landscaping for certain of the rooms shown on the drawings; Alternate 2 called for adding a "shelled" fourth floor as described in the proposal; and Alternate 3, as originally issued, called for: Add a complete fourth floor as indicated in drawings including the finished interior partitions with full HVAC, Plumbing and Electrical Service. Include furniture and landscaping for rooms 414 and 419. (Includes items in Alternate No. 2) As a result of questions received from prospective bidders at the pre-bid conference which indicated some confusion as to the meaning and intent of the Department regarding Alternate No. 3, by letter to all prospective bidders, dated January 8, 1992 the Department's architect indicated: Alternate #3 shall be the fourth floor complete, as shown on drawings, which includes items in Alternate #2. Addendum #1 to the request for bids, dated January 10, 1992, clarified Item 1-3.6), PROPOSAL FORM, of the PROJECT MANUAL to ADD to "Alternate #3", "(Include items in Alternate #2)". Item #2-1 of Addendum #2, dated January 16, 1992, deleted the sentence changed by Item #1- 3.6, and revised the sentence to read as follows: This includes any items required in addition to Alternate #2 to complete the remainder of the work for the Fourth Floor. Information contained at the beginning of each Addendum calls the bidders' attention to the change and indicates that failure to incorporate it may result in disqualification. The due date for bids was extended at the instance of the Department. Both Petitioner and Intervenor submitted bids for this project as did several other concerns on January 23, 1992. Greenhut's base bid was $4,139,000 with a deduct of $63,600 for Alternate 1a, and additions for Alternates 1b, 2, and 3 of $69,500, $239,000, and $209,000 respectively. Greenhut's total bid, therefore, through Alternate 3, was $4,592,900. Dunn's base bid was $4,079,000 with a zero deduct for Alternate 1a, and additions for Alternates 1b through 3 of $67,000, and $428,000. Dunn's total bid, therefore, was $4,574,000 for a difference of $18,900. Greenhut's bid was submitted on a form which provided for the base bid, the deduct for 1a, and the additions for 1b. 2 and 3 with the figure for 3 being those costs in addition to those identified in Dunn's bid was submitted on a prior form which provided for a base bid, a 1a deduction if any, (there was none), and additions for 1b, 2, and 3 with the figure for 3 including the figure listed for 2. An initial review of Dunn's bid form, then, showed a base bid of $4,079,000, no 1a deduction, a 1b addition of $67,000, a 2 addition of $311,000, and a 3 addition of $428,000. This letter figure included the $311,000 figure for Alternate 2, which should have been deducted from the bid during tabulation. When the bids were opened on January 23, 1992 by Mr. Everline, each figure on each bid was read off and listed on the bid tabulation form in the appropriate area. No attention was given at that time to the appropriateness or correctness of the figures listed on each bid form, nor was any attention paid to any other technical requirement of the procurement. This was merely a transfer of figures from the bid form to the tabulation form, and when this was done, Mr. Everline announced to all in attendance, including many contractor representatives, that the "apparent low bidder" was Greenhut. In arriving at that conclusion, Mr. Everline added all of Dunn's figures together without deducting the $311,000 listed for Alternate 2, a figure which was included in the $428,000 figure listed for Alternate 3. This resulted in an incorrectly large total bid for Dunn. Sometime later that day, a representative of Dunn contacted Mr. Everline to indicate that Dunn had inadvertently bid on the wrong form which precipitated its misleading presentation. Mr. Everline properly declined to discuss the matter and referred the Dunn representative to the Department's legal counsel. Sometime thereafter, when the bids had been tabulated and reviewed for responsiveness and legal qualification of bidders, Mr. Everline suggested to representatives of DHSMV that in order to forestall a protest, only so much of the project as extended through Alternate 2 be awarded. DHSMV officials, however, had sufficient funds available for the entire project, including some additional funds, if necessary, for cabling, and insisted they wanted the entire project awarded. The Department's legal counsel, upon review of the situation, concluded that the Dunn's actual bid intent was clear to include the amount listed for Alternate 2 within that listed for Alternate 3, and not to consider the two as additives to each other. It further concluded that Dunn's use of the improper form on which to submit its bid was immaterial and afforded it no improper competitive edge over other bidders. Therefore, it was concluded that Dunn was the low responsive bidder and, on February 4, 1992, the Department issued a Notice of Award to Dunn. Thereafter, Greenhut filed its Petition For Hearing taken as a protest to the award. Both the Department and Dunn agreed that Greenhut had standing to protest the award and that the protest was timely filed. It is so found.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the Department of General Services enter a Final Order in this case dismissing the protest of Greenhut Construction Company, Inc., in regard to the proposed award of contact in bid number HSMV - 90022010 to Dunn Construction Company, Inc. RECOMMENDED in Tallahassee, Florida this 21st day of April, 1992. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of April, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-1297 BID The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of fact submitted by the parties to this case. FOR THE PETITIONER: 1. - 6. Accepted and incorporated herein. 7. - 9. Accepted. Accepted. & 12. Accepted and incorporated herein. Accepted. Accepted. & 16. Accepted and incorporated herein. Accepted and incorporated herein. & 19. Accepted and incorporated herein. Accepted. & 22. Accepted and incorporated herein. Argument and not Finding of Fact except for 1st sentence which is accepted. & 25. Accepted and incorporated herein. FOR THE RESPONDENT: 1. - 3. Accepted. 4. - 6. Accepted and incorporated herein. 7. & 8. Accepted. 9. - 12. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. Accepted and incorporated herein. & 17. Accepted and incorporated herein. Irrelevant but accepted as true. Accepted. Accepted and incorporated herein. Accepted. Accepted. Irrelevant but accepted as true. Accepted. Accepted and incorporated herein. Irrelevant. Accepted and incorporated herein. Accepted. FOR THE INTERVENOR: Accepted. - 5. Accepted and incorporated herein. Accepted and incorporated herein. & 8. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. - 15. Accepted. 16. - 19. Accepted. 20. & 21. Accepted. Accepted and incorporated herein. & 24. Accepted. COPIES FURNISHED: Robert A. Emmanuel, Esquire 30 South Spring Street Post Office Drawer 1271 Pensacola, Florida 32596 Sylvan Strickland, Esquire Suite 309, Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 Harry R. Detwiler, Jr., Esquire 315 S. Calhoun Street, Suite 600 Tallahassee, Florida 32301 Ronald W. Thomas Executive Director Department of General Services Suite 307, Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 Susan Kirkland General Counsel Department of General Services Suite 309, knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact In July 1988, the Department of Health and Rehabilitative Services issued an Invitation to Bid (ITB) seeking proposals to lease approximately 26,000 square feet of space for offices and client services in Ft. Walton Beach, Florida. The ITB was the second issued, following the Department's determination that the first ITB did not result in an acceptable bid. Page 15 of the 16 page bid submittal form is entitled "Evaluation Criteria" and contains a list of weighted factors which are to be used in the evaluation of bids. In the second ITB, paragraph 3(b) of the criteria stated, "[P]rovisions of the aggregate square footage in a single building. Proposals will be considered, but fewer points given, which offer the aggregate square footage in not more than two locations provided the facilities are immediately adjacent to or within 100 yards of each other." (emphasis supplied) At approximately the same time as the Department's issuance of the second ITB, several meetings occurred related to concerns generated by the response to the first ITB. One meeting took place between Nelson P. Davis (the unsuccessful bidder in ITB #1) and Department representatives, including James Peters, HRS's District One Manager for Administrative Services. Davis currently leases to the Department, two adjacent buildings sited at 417 Racetrack Road, Ft. Walton Beach which comprise approximately 4,000 square feet less than the Department is now seeking. Davis' bid in response to the first ITB included utilization of a third building to meet the Department's space needs. 1/ During the meeting which included Peters, Davis, and others, it became apparent that there was confusion over the meaning of the word "location" in paragraph 3(b) of the evaluation criteria. Peters understood the word to mean "building" while Davis understood the word to mean an area which could be the site of more than one building. Following the Davis-Peters meeting, other meetings occurred at which Department officials considered the issue. While some representatives of the Department believed that the word "location" was synonymous with "building," others believed the use of "location" to be ambiguous. To clarify the Department's preference related to number of buildings, an amended page 15 of the bid submittal form was issued on July 2, 1988. The amended form, entitled "Evaluation Criteria" states in paragraph 3(b), "[P]rovisions of the aggregate square footage in a single building... Proposals will be considered, but fewer points given, which offer the aggregate square footage in not more than two buildings provided the facilities are immediately adjacent to or within 100 yards of each other." (emphasis supplied.) The amendment was issued at the direction of James Peters and was approved by Charlene Schembera, the District I Administrator. The amendment to page 15, paragraph 3(b), is a reasonable effort by the Department to clarify their intent in previous use of the word "location." The assertion by Davis that the change was made at the instigation of James Peters in order to prohibit Davis from successfully submitting a responsive bid of three buildings is not supported by the evidence. While James Peters has expressed on at least one occasion a desire to avoid entering into further business arrangements with Davis, he has stated that his personal opinion would not influence his participation in the bid solicitation process. The evidence did not indicate that his participation in the decision to issue an amended paragraph 3(b) of the evaluation criteria was based on his negative personal opinion regarding Davis, nor did the evidence indicate that any other person involved in the process had negative opinions about Davis. Further, although some Department officials testified that a bid which contained more than two buildings would be deemed non-responsive and disqualified from consideration by operation of the amended paragraph 3(b), such a position probably is not tenable, but is not at issue in this proceeding in that the Department has not yet acted on bids submitted in response to the second ITB. The Department has valid reasons for attempting to concentrate its personnel and client services in a single building, or in as few buildings as is possible, 2/ however the Invitation to Bid does not restrict bidders in such a manner. The sole expression of the preference for a single building, or for not more than two buildings, is expressed in paragraph 3(b) of the evaluation criteria on page 15. The amendment to page 15 of the bid submittal form does not appear to bar the submission by Davis or by any other bidder of a responsive proposal containing more than two buildings. Page 15 is clearly entitled "Evaluation Criteria." The criteria are nine weighted "award factors" upon which "all bids will be evaluated." Paragraph 3(b), as one factor for consideration in the evaluation process, expresses a preference for a single building containing the required aggregate square footage. The paragraph further advises that proposals will be considered but fewer points awarded for proposals containing not more than two buildings closely located. The weighting factor for paragraph 3(b) of the evaluation criteria is five percent of total possible points. The clear indication of the amended paragraph is that proposals which contain more than two buildings will receive no points under 3(b). The Department's position would disqualify as non-responsive a bid of three buildings based solely on an evaluation factor worth five percent of the total available points. On the other hand, a bid containing two buildings, separated by not more than 100 yards, would apparently be responsive and would be evaluated, even if the two buildings were divided by a major highway or other substantial obstacle. The Department's proposed position is not logical, but is not raised herein since it has not yet been applied in this case.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Department of Health and Rehabilitative Services enter a Final Order dismissing Case No. 88-4392BID. DONE and ENTERED this 12th day of October, 1988, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 12th day of October, 1988.
