The Issue The issue in this case is whether the Respondent, the Department of Transportation (DOT), should award State Project No. 89030-3528 to The Cone Corporation, notwithstanding the bid protest filed by the Petitioner, The Murphy Construction Co., alleging that its bid was responsive and lower than The Cone Corporation's bid or, in the alternative, if its bid was nonresponsive, that The Cone Corporation's bid also was nonresponsive, and that the project should be re-bid. 1/
Findings Of Fact State Project No. 89030-3528 (the project) is for work on SR Bridge No. 890941 over Warner Creek in Martin County. The DOT solicited bids for the work and established December 5, 1990, as the deadline for submission of bids. The DOT established, as its Disadvantaged Business Enterprise (DBE) goal for the project, a goal of ten percent participation by DBEs. The Petitioner, The Murphy Construction Co., submitted a bid for the work in the amount of $1,026,222.96. It was the apparent second lowest bid. The Tom Quinn Company, Inc., was the apparent low bidder, at $846,216.87, but it did not meet the ten percent DBE goal and did not demonstrate good faith efforts to achieve the goal. The next lowest bidder, after the Petitioner, was The Cone Corporation's bid of $1,083,672.95. There was one other bidder. The Petitioner asserted that $110,360, or 10.75%, of the work would be done by DBEs. The Petitioner alleged in its bid that $26,571 worth of DBE work would be done by Advance Barricades & Signing, Inc. (Advance Barricades). The Petitioner's DBE Utilization Form for Advance Barricades & Signing, Inc., identified the DBE by name but left blank the parts of the form designated "Item No." and "Description (note if item qualifies for SUPPLIER)". As a matter of agency policy, the DOT has required that the portion of the form designated as "Description (note if item qualifies for SUPPLIER)" be completed. A description of the work to be performed by the DBE has been considered essential. The DOT has required the description of the work to be performed by the DBE because: first, the DOT interprets the applicable rules to require it; and, second, because the purpose of the rule and policy is to enable the DOT's Minority Programs Office to monitor the performance of the contract to be sure that the representation as to DBE participation is carried out--i.e., not only that the representation as to the percentage of DBE work is met but also that the DBE does the work the contractor represents that the DBE will do. Monitoring is significant because it can prevent the bidder, if successful, from trying to take advantage of the DBE by asking the DBE to do work that the DBE is not prepared or equipped to do or by asking the DBE to do more work for the money than contemplated by the DBE at the time of the bid. It also can insure that bidders will not, in essence, pay a DBE for doing nothing. Although the Petitioner's DBE Utilization Form gave the name of the DBE, it did not purport to describe the work the DBE was going to do. Although listing the name Advance Barricades and Signing, Inc., identified some of the work Advance Barricades does, it did not identify all of the work Advance Barricades does and, more importantly, did not identify the work the Petitioner was proposing that Advance Barricades was to do on the project in question. The DOT could have assumed what work Advance Barricades would do for the Petitioner, but it could not effectively monitor based on the assumption. Sometimes a DBE subcontractor will complete and sign the DBE Utilization Form for the bidder. Sometimes, the DBE will telephone the bidder with its price, and the bidder will complete the form. In the latter case, if the form is completed, the DOT Good Faith Efforts Committee will, as a matter of policy, telephone the DBE to confirm the information. In this case, Advance Barricades provided the Petitioner with a written price for the work, but the Petitioner itself prepared and submitted a form for inclusion in its bid on the project and did not include Advance Barricades's written price. Because the Petitioner left blank the parts of the form designated "Item No." and "Description (note if item qualifies for SUPPLIER)", the Good Faith Efforts Committee did not telephone Advance Barricades to confirm or supplement the information submitted by the Petitioner with its bid. The Cone Corporation's bid also included the representation that Advance Barricades would be doing work on the job that would qualify towards the DBE goal. Under the part of the form designated "Description (note if item qualifies for SUPPLIER)," The Cone Corporation stated, "SEE ATTACHED." Attached to the form was a proposal from Advance Barricades giving specific item numbers and descriptions of temporary barricades and signing, advance warning arrow panels, flashing lights, temporary pavement markings, and special detour signing to be furnished at a price of $20,805.45. In this case, The Cone Corporation's bid included a copy of the Advance Barricades proposal, which provided an adequate description, including item numbers, of the work Advance Barricades would do for The Cone Corporation. Despite the reasons for the DOT policy described in the preceding finding, the DOT has slipped into a practice of not requiring that the portion of the DBE Utilization Form designated "Item No." be completed. In addition, one-word generalizations--such as "pipe" or "trucking"--in the part of the form designated "Description (note if item qualifies for SUPPLIER)"are accepted by the DOT even though they may be insufficient to enable the DOT's Minority Programs Office to determine what kind of pipe or trucking is meant. Indeed, the DOT would have accepted description "barricades and signing" in the Petitioner's case. But these descriptions are inadequate to serve the purpose of the rule that the DBE work be described in the bid documents. For example, the word "pipe," without item numbers, does not identify the type or quantity of pipe to be provided. Indeed, the DOT's DBE Utilization Form gives evidence that more of a description initially was contemplated by the DOT. The form provides a space designated "Item No." In addition, the part of the form provided for the description of the DBE work also states: "(note if item qualifies for SUPPLIER)." (Emphasis added.) The form infers that the description will include the item number. Otherwise, it would be very difficult, and in some cases impossible, for the Minority Programs Office to effectively monitor the progress of construction. In this case, The Cone Corporation's bid included a copy of the Advance Barricades proposal, which provided an adequate description, including item numbers, of the work Advance Barricades would do for The Cone Corporation. But its DBE Utilization Form for H.S. Thompson described $85,702 worth of DBE work as "concrete, rebar and pipe." Under the column marked "Item No.," The Cone Corporation put, "various." If H.S. Thompson were going to do all of the "concrete, rebar and pipe" on the project, it would have been doing more like $540,000 worth of work for The Cone Corporation. Like the Petitioner's DBE Utilization Form for Advance Barricades, the H.S. Thompson form was inadequate to serve the monitoring purposes of the DOT's policy. The DOT now is in the process of considering whether to amend its rules, perhaps to provide that all proposed DBE participation be confirmed by telephone in order to avoid outcomes like the one its Good Faith Efforts Committee, Technical Review Committee, and Contract Awards Committee recommended in this case--the rejection of a bid as nonresponsive in favor of a higher bid that proposes a smaller percentage of DBE participation.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent, the Department of Transportation, enter a final order rejecting all bids on State Project No. 46090-3511. RECOMMENDED this 12th day of March, 1991, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 12th day of March, 1991.
The Issue The issues in this case are whether Respondents violated Sections 475.25(1)(e) and (b), Florida Statutes (1995),1 by failing to provide timely written notification to the Florida Real Estate Commission (the "Commission") of any good faith doubt as to whom funds in Respondents' escrow account should be disbursed; by engaging in fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust; and, if Respondents violated either or both statutes, what, if any, penalty should be imposed against Respondents' licenses.
Findings Of Fact Petitioner is the state agency responsible for the regulation and discipline of licensees in the state. Respondents are both licensed in the state. Respondent Carey is licensed as a real estate broker and holds license number 0577832. The last license was issued to Respondent Carey as a broker at Crescent Properties, Inc., 200 N. Denning Drive, Suite 2, Winter Park, Florida 32789-3762. Respondent Carey was licensed and operating as broker and officer of Respondent Crescent Properties, Inc. ("Crescent"). Crescent is registered as a real estate broker corporation and holds registration number 0577832. The last registration was issued to Crescent as a broker, Crescent Properties, Inc., 200 N. Denning Drive, Suite 2, Winter Park, Florida 32789-3762. On October 10, 1995, Respondents and Estrella Acosta entered into a property management agreement for a residence located at 563 Northbridge Drive, Altamonte Springs, Florida. The landlord agreed to pay Respondents half of the first month's rent for securing a tenant and 10 percent of all rent payments for managing the property. On December 16, 1995, Respondents, as Acosta's agent, leased the property to Victor and Maria Thompson (the "tenants"). The lease agreement provided in relevant part that: the tenants would pay a $735.00 security deposit and $735.00 a month in rent for 12 months; Crescent would act as the landlord's agent and would collect all funds due under the lease. The tenants paid the $735.00 security deposit to Respondents. Respondents placed the security deposit into the escrow account. However, the tenants paid monthly rent directly to the landlord. By letter dated January 31, 1996, Acosta advised Respondents that Acosta was terminating the property management agreement. The letter requested that Respondents release the $735.00 security deposit to Acosta. On February 12, 1996, Respondents mailed a letter to the tenants. The letter requested the tenants' consent to release the security deposit to Acosta. The tenants did not respond to the letter. Respondents did not know whether the tenants agreed to or objected to release the security deposit. Respondents continued to hold the security deposit in Respondents' escrow account. Respondent Carey sought advice from the legal hot line service made available by the local Realtor association. Respondent Carey was confused and erroneously believed that the hot line acted as an agent for the Commission. Respondents did not advise the Commission in writing that Respondents had a good faith doubt as to whom the security deposit should be disbursed. Respondents did not send the tenants a certified letter advising that the tenants must respond by a date certain or Respondents would disburse the security deposit to Acosta. Respondents did not institute one of the settlement procedures set forth in Section 475.25(1)(d)1 including a request that the Commission issue an escrow disbursement order. Respondents had a good faith doubt as to whom the security deposit should be disbursed. Respondents mailed Acosta a monthly accounting dated February 6, 1996, which stated in relevant part: SECURITY DEPOSIT: $735.00 IN DISPUTE AN ESCROW DISBURSEMENT ORDER HAS BEEN FILED. The reference to a disbursement order was not a misrepresentation. Respondent believed that she was undertaking the appropriate steps for a disbursement order by following the advice obtained on the hot line provided by the local Realtor association. On February 12, 1996, less than two weeks after the landlord advised Respondents that the landlord had terminated the lease, Acosta filed a complaint against Respondents with Petitioner. By letter dated February 26, 1996, Petitioner notified Respondent Carey of Acosta's complaint. Respondents did not know whether Acosta's termination of the lease was based on a default by the tenants or was itself a default by the landlord. Pursuant to the terms of the lease agreement, Respondents asserted an offset against the landlord for half of the first month's lease and 10 percent of the lease payments due for the 12 month lease term. In a letter to Acosta dated August 27, 1996, Respondents stated in relevant part: Per my conversation with the Department of Business and Professional Regulation Division of Real Estate: It has been determined that your claim against us was unwarranted and false . . . You have caused everyone us, DBPR, our attorney, a great deal of unwarranted lost time . . . .
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a final order finding Respondents guilty of violating Section 475.25(1)(e), not guilty of violating Section 475.25(1)(b), issuing a written reprimand to Respondents, and requiring Respondent Carey to complete seven hours of continuing education in one or more escrow management courses for real estate brokers. DONE AND ENTERED this 6th day of January, 1998, in Tallahassee, Leon County, Florida. Hearings Hearings DANIEL MANRY Administrative Law Judge Division of Administrative The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 4889675 SUNCOM 278-9675 Fax Filing (850) 921-6847 Filed with the Clerk of the Division of Administrative this 6th day of January, 1998.
Findings Of Fact Based upon my observation of the witnesses and their demeanor while testifying, the stipulation of facts entered into among the parties, the documentary evidence received and the entire record compiled herein, I hereby make the following Findings of Fact: The name and address of the Petitioner is Golden Eagle Engineering Construction, Inc. (Golden Eagle) 1302 Northwest 33rd Street, Pompano Beach, Florida. The name and address of the Respondent is State of Florida, Department of Transportation, 605 Suwannee Street, Haydon Burns Bldg., Tallahassee, Florida. The name and address of the Intervenor is Toppino's, Inc. (Toppino's) Post Office Box 787, Key West, Florida. The Petitioner timely submitted a bid with regard to state project SR-5 (U.S-1), from the North end of State Bridge No. 900001 to Kennedy Drive in Key West, Budget Item No. 6116637, State Job No. 90010-3519 in Monroe County. The Petitioner was the apparent low bidder with a bid in the amount of $386,017.43. The Intervenor timely submitted a bid in regard to the same state road project (State Job No. 90010-3519). The Intervenor was the second low bidder with a bid in the amount of $398,132.10. The bid specifications required that bids submitted by contractors were to include a designation of at least fifteen percent (15 percent) of work to be performed by certified disadvantaged business enterprises (D.B.E.'s). The bid documents provided a separate form entitled "D.B.E./W.B.E. Utilization Form No. 1" on which the designation of work to the chosen D.B.E. was to be listed. The Respondent "certifies" DBE's in accordance with the standards and procedures set forth in Rule 14-78, Florida Administrative Code. Along with project specifications and other information concerning the proposed job, the Respondent provides hopeful contractors with a D/WBE Directory which lists qualified DBE and WBE businesses. The latest directory prior to the bid opening on the contract at issue here was published by D-O-T in October of 1986. Respondent's Bureau of Minority Programs maintains a current register and will advise any bidder so requesting whether or not a firm qualifies as a DSE or WBE. The invitation to bid provided that the contractor's bid submission must include the following information: The names and addresses of certified DBE and WBE firms that will partici- pate in the contract. Only DBEs and WSEs certified by the Department at the time the bid is submitted may be counted toward DBE and WBE goals. * * * (4) If the DBE or WBE goal is not met sufficient information to demonstrate that the contractor made good faith efforts to meet the goals. The DBE's utilized by the Petitioner to satisfy the requirements of the bid were as follows: (a) Millit $8,972.60 Highway Concrete Corporation $45,330.60 A. Falero Trucking, Inc. $21,500.00 The Petitioner's Bidder's Utilization Form disclosed an apparent 19.5 percent DBE participation. The Petitioner honestly believed that its bid proposal met and exceeded the DBE participation goals specified for the contract. The sealed bids were opened on October 29, 1986. The Respondent, in its initial review of Petitioner's bid, discovered that A. Falero Trucking, Inc., (Falero) was not a certified DBE. On October 31, 1986, Ms. Heather Calligan, majority shareholder of Golden Eagle, wrote Respondent a letter in which she stated that the owners of Falero had assured Golden Eagle that Falero was a certified DBE firm, that they had a current DBE certification letter and that their exclusion from the D/WBE Directory was an oversight on the part of Respondent. Ms. Calligan further advised Respondent that she believed Falero's assertion that the firm was DBE certified because her company is W.B.E. certified and had been omitted from the D/WBE Directory in error in the recent past. Further, Ms. Calligan stated that she had been acquainted with the owners of Falero on a personal and business basis for several years and did not believe that they would mislead her. On November 3, 1986, Ms. Calligan wrote another letter to Respondent wherein she stated that she had contacted Falero concerning their certification and that Falero could not locate their certification letter. Ms. Calligan requested that Golden Eagle be allowed to substitute F.R.E. Construction Company (F.R.E.), a DBE certified company for Falero, should Falero not substantiate its claim of being currently DBE certified. At all times material hereto, Amable Falero and Jose M. Rodriquez owned 100 percent (50 percent each) of the stock of Falero and 70 percent (35 percent each) of the stock of FRE. Falero and FRE, although independent companies, operate from the same business location, have the same management and office staff and use some of the same employees interchangeably. On November 5, 1986, the Respondent received a letter from Mr. Rodriquez, co-owner of Falero. Mr. Rodriquez stated that he personally advised Golden Eagle that Falero was a certified DBE firm and that he had a letter in his files substantiating his claim. Mr. Rodriquez advised Respondent that he had made this representation to Golden Eagle in error. When Respondent discovered that Falero was not a certified DBE, the bid documents were forwarded to its Good Faith Efforts Review Committee for a determination of Petitioner's good faith efforts. The Good Faith Efforts Committee was formed in 1984 and its primary responsibility is to make an objective evaluation of good faith efforts of prime contractors who submit bids to D-O-T. Rule 14-78.03(2)(b)4, F.A.C. lists several factors that the Respondent is required to consider in evaluating a contractor's good faith efforts. (Those factors are enumerated in detail in the Conclusions of law Section herein). The Respondent's practice and procedure is that it will conduct a limited review of the good faith evaluative criteria listed in the Rule even where the contractor has not included a "good faith efforts package" in its bid submission demonstrating good faith efforts. In such cases, the Respondent usually finds the bid non-responsive because of failure to provide documentation of good faith efforts. However, circumstances could exist where the Good Faith Efforts Committee may find good faith in the absence of any good faith efforts documentation specifically submitted by the contractor in its bid proposal. Thus, pursuant to the practice of the Good Faith Efforts Committee, the absence of information demonstrating good faith efforts within the bid proposal does not preclude its evaluation of the contractors' good faith efforts to achieve the goals. The Good Faith Efforts Committee completed a report form entitled "Good Faith Efforts Evaluation" in regard to Petitioner's bid. All of the required statutory criteria was listed on the form. In response to criteria IV ("whether the DBE or WBE goal was met by other bidders") the Respondent entered: "Goal met by other bidder." In response to criteria VII ("whether the contractor elected to sub-contract types of work that match the capabilities of solicited DBE's of WBE's"), the Respondent entered: "Bidder used quotes from three (3) areas." In response to criteria IX ("whether the contractor has on other contracts within the past six (6) months utilized DBE's and WBE's") the Respondent entered: "No projects in the last six (6) months." In response to all of the other criteria, the Respondent entered: "bidder did not submit any documentation", "no documentations", "did not provide documentation" or simply "none submitted". During the Good Faith Efforts Committee review of the Petitioner's bid, the committee was aware that Falero had been a certified DBE in the past, that the Petitioner's bid included an apparent 19.5 percent DBE participation with Falero and that without Falero the Petitioner achieved over 90 percent of the DBE participation goals. Based on the information which it had, the Good Faith Efforts Committee was apparently satisfied that such information did not establish good faith efforts and recommended that the bid be declared non-responsive based on the Petitioner's failure to include good faith efforts documentation with its bid proposal. On November 12, 1986, the report of the Good Faith Efforts Committee was forwarded to the Technical Awards Committee, and based on that report, the Technical Awards Committee voted unanimously to reject the Petitioner's bid as non-responsive and to recommend awarding the contract to Intervenor. Respondent's Final Review Committee, the Contract Awards Committee then decided to declare Petitioner's bid non- responsive and to award the contract to Intervenor. On November 18, 1986, the Respondent mailed a Notice of Switch in Apparent Low Bidder to all parties indicating that Golden Eagle, the apparent low bidder, had been declared non-responsive due to failure to meet DBE requirements and proposing to award the contract to Intervenor, the second low bidder. GOLDEN EAGLE'S HONEST MISTAKE While compiling its bid, one of Petitioner's employees noted that Falero was not listed in the D/WSE Directory. The Petitioner contacted Falero and was informed by one of Falero's owners that Falero was a certified DBE and had a current certification letter. Ms. Heather Calligan, the Petitioner's majority stock holder, was satisfied in her belief that Falero was a certified DBE for several reasons. First, Ms. Calligan was personally acquainted with the owners and knew them to have been DBE certified by Respondent in the past. In addition, Golden Eagle has been a WBE since 1979 and Ms. Calligan was aware that her company's name had been occasionally left off of the D/WBE Directory during times it was certified and should have been included. Based on those factors, the Petitioner honestly believed that Falero was DBE certified and did not call the Department's Minority Programs office to verify Falero's DBE status nor request that Falero produce its letter of certification. FALERO'S STATUS Falero was certified by the Respondent on April 4, 1983, as a minority business enterprise for a period of one year. On May 14, 1984, the company was re-certified for another one year period. On November 20, 1985, the Respondent received an application for re- certification as a disadvantaged business enterprise from Falero. After an initial review of the application, the Respondent wrote Falero a letter dated December 3, 1985 requesting that the company provide: The current financial statement or a breakdown of current assets and liabilities and, Copies of the registration of all vehicles owned by the company. The policy of the Respondent with regard to incorrect or incomplete information submitted by DBE's is to acknowledge receipt of the information and to advise the DBE as to what information should be submitted. The file is then placed in an "abeyance" status pending receipt of the requested information. In October of 1986, Falero had still not fully responded to the Respondent's letter of December 3, 1985 with the complete information requested. After its initial request for additional information, the Respondent made no further request for additional information from Falero with regard to the November 20, 1985 application for re-certification. Falero finally supplied all of the information requested in the December 3, 1985 letter to Respondent in December 1986 in conjunction with a new application for certification. Thereafter, Falero was certified as a DBE in January 1987. Between May 1985 and January 1987 Falero was not a certified DBE and was not included on any of the D/WBE directories prepared by the Respondent during that period.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that: The bid of Golden Eagle Contractors, Inc. on State Project No. 90010- 3519 be declared non-responsive; The contract for State Project No. 90010-3519 be awarded to Intervenor; and The protest of Golden Eagle Contractors, Inc. be DISMISSED. DONE and ORDERED this 18th day of March, 1987 in Tallahassee, Leon County, Florida. W. MATTHEW STEVENSON 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 18th day of March, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-0250BID 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. Rulings on Proposed Findings of Fact Submitted by the Petitioner Adopted in Finding of Fact 2. Adopted in Finding of Fact 1. Adapted in Finding of Fact 3. Adopted in Finding of Fact 4. Adopted in Finding of Fact 6. Adopted in Findings of Fact 7 and 10. Adopted in Finding of Fact 10. Adopted in Finding of Fact 5. Adopted in Finding of Fact 11. Adopted in Finding of Fact 24. Addressed in Procedural Background Section. Addressed in Procedural Background Section. Addressed in Procedural Background Section. Addressed in Procedural Background Section. Addressed in Procedural Background Section. Adopted in Finding of Fact 14. Adopted in Finding of Fact 25. Adopted in Finding of Fact 26. Adopted in Finding of Fact 26. Adopted in Finding of Fact 29. Adopted in Finding of Fact 31. Adopted in Finding of Fact 14. Rejected as subordinate. Adopted in Finding of Fact 13. Rejected as not supported by the weight of the evidence. Adopted in Finding of Fact 14. Adopted in Finding of Fact 27. Rejected as subordinate. Rejected as subordinate. Adopted in substance in Findings of Fact 26 and 27. Rejected as subordinate. Adopted in Finding of Fact 19. Rejected as subordinate. Rulings on Proposed Findings of Fact Submitted by the Respondent Adopted in Findings of Fact 4 and 7. Adopted in Findings of Fact 5, 10 and 11. Addressed in Procedural Background Section. Adopted in substance in Findings of Fact 19, 20 and 21. Adopted in substance in Findings of Fact 9 and 24. Adopted in substance in Findings of Fact 20 and 21. Adopted in substances in Finding of Fact 19. Adopted in substance in Findings of Fact 17, 18, 19 and 20. Adopted in substance in Finding of Fact 21. Adopted in substances in Finding of Fact 21. Adopted in substance in Findings of Fact 13 and 14. Rejected as a recitation of testimony. Rulings on Proposed Findings of Fact Submitted by the Intervenor Adopted in substance in Findings of Fact 7, 9 and 24. Adopted in substance in Finding of Fact 7. Adopted in substance in Findings of Fact 7 and 9. Addressed in Conclusions of Law Section. Adopted in substance in Findings of Fact 10, 11 and 14. Adopted in substance in Findings of Fact 25 and 31. Adopted in substance in Findings of Fact 24 and 31. Adopted in substance in Finding of Fact 26. Partially adopted in Finding of Fact 30. Matters not included therein are rejected as argument and/or subordinate. Addressed in Conclusions of Law Section. Adopted in substance in Findings of Fact 11, 12, 20 and 21. Adopted in substance in Finding of Fact 21. Rejected as argument. Partially adopted in Finding of Fact 24. Matters not contained therein are rejected as argument. Partially adopted in Findings of Fact 13 and 14. Matters not contained therein are rejected as argument. Rejected as argument. COPIES FURNISHED: Melissa Fletcher Allaman, Esquire Post Office Box 1170 Tallahassee, Florida 32302-1170 Jay O. Barber, Esquire Department of Transportation 605 Suwannee Street Tallahassee, Florida 32301 John O. Williams, Esquire 1343 E. Tennessee Street Tallahassee, Florida 32308 Kaye N. Henderson Secretary Department of Transportation Haydon Burns Bldg. Tallahassee, Florida 32301 A. J. Spalla, Esquire Department of Transportation Haydon Burns Bldg. Tallahassee, Florida 32301
The Issue Whether at any time material to this proceeding there was an employee- employer relationship between Respondent, Government Employees Insurance Company (GEICO) and GEICO's general field representatives (GFR). Whether the close relationship referred to in GEICO's conflict of interest policy was limited solely to the close relationship as a result of a person's marital status or did it include any close relationship, and, in either case, was the conflict of interest policy based on a bona fide business necessity. Whether GEICO's refusal to appoint Petitioner as the GFR in GEICO's office in Neptune Beach, Florida was based on either Petitioner's marital status or her sex.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, the following relevant facts are found: Petitioner, Lynn Cattin, has been married to her husband, Larry Cattin, continuously since June, 1972. Larry Cattin has been employed as a senior account agent with Allstate Insurance Company (Allstate) since 1979 selling insurance products, including auto and homeowner's insurance. Petitioner responded to a newspaper advertisement placed by Frank Butterfield's insurance agency and was employed by that agency in its Neptune Beach, Florida Branch Office (branch office) in March 1983. Petitioner continued to work for the Butterfield insurance agency until the end of the 1987 calendar year. Frank Butterfield is now and was at all times material to this proceeding a general field representative (GFR) of Respondent, Government Employees Insurance Company (GEICO). Approximately 80% of Butterfield's branch office income was derived from GEICO products such as homeowner and automobile insurance. Petitioner advised Butterfield of her husband's position with Allstate prior to her hiring, and requested that Butterfield advise GEICO of her husband's position with Allstate. Butterfield advised GEICO's zone manager, Hugh McClelland of Larry Cattin's position with Allstate, and was advised by GEICO that there was no objection to Butterfield hiring Petitioner while her husband was employed by Allstate. Carl Kelle and Harry Bond, both holding the position of vice-president with GEICO, and Warren Trumble, also a zone manager for GEICO were aware of Larry Cattin's position with Allstate. Petitioner was the only employee in the branch office until May, 1986, and was basically in charge except when Butterfield was in the branch office. Butterfield was present in the branch office a good percentage of the time during 1983 through 1985 but his presence in the branch office was reduced to approximately 20% after 1985. Petitioner's compensation was $13,000.00 per year when she began working for Butterfield in 1983. When Petitioner left Butterfield's employment at the end of 1987 her compensation was $20,000.00 per year. The clerical employee's compensation at the end of calendar year 1987 was $240.00 per week. GEICO provided Petitioner with business cards which identified her as "Lynn F. Cattin, Representative". During her employment with Butterfield, Petitioner had complete access to all sales information and other possible confidential information relating to GEICO in the branch office. On occasion, Petitioner would refer potential customers of GEICO's to Allstate but only where GEICO did not offer insurance to meet the customer's needs and only after making Butterfield aware of the situation. During her employment with Butterfield, Petitioner attended seminars conducted by GEICO for its GFRs. The branch office had a gross commission income during the year 1987 of approximately $7,000.00 per month with expenses for the office of approximately $3,000.000 per month including Petitioner's salary and the salary of the clerical employee. In the latter part of 1986, GEICO decided to require each office to have its own GFR. Therefore, the branch office was to have its own GFR since Butterfield would be GEICO's GFR in his office in Jacksonville, Florida. The appointment of the GFR for the branch office was to be effective January 1, 1988. Butterfield recommended Petitioner for the position of GFR in the branch office, and Petitioner was interviewed by Mr. Carl Kelle, Mr. Harry Bond, and Mr. Warren Trumble, representatives of GEICO, at a Tampa, Florida seminar. Applications of potential GFRs are presented to the GFR Board which makes the decision concerning which candidates will be appointed to the position of GFR. When Petitioner's application was considered by the Board, Gene Mahan, president of GEICO, suggested there may be a problem with the conflict of interest policy. Gene Mahan discussed the conflict of interest as it concerned Petitioner's application with William Snyder, Board Chairman of GEICO. William Snyder disapproved Petitioner's application on the basis of her husband's representation of a competing carrier, Allstate. Petitioner wrote a letter to Snyder dated July 29, 1987, requesting that he reconsider his decision. Snyder responded by letter dated August 19, 1987, assuring the Petitioner that GEICO had no concerns regarding her loyalty while employed by Butterfield and that GEICO's only concern was a "potential" concern for future problems, but that because of her husband's position with Allstate they could not consider her for the GFR position. At no time was Petitioner given any other reason than her husband's employment status with Allstate for her having been denied the GFR position with GEICO. Carl Kelle brought Petitioner's application to the GFR Board hoping there could be an exception made to the conflict of interest policy. Kelle was unaware of any exception having been made to that policy. After Petitioner was denied the GFR appointment by GEICO, Morris Burbia was appointed GFR for the branch office by GEICO, and eventually Burbia contracted with Butterfield to purchase the branch office. Petitioner worked for Butterfield until the end of the calendar year 1987 when Butterfield's management of the branch office ended. The history of GEICO's conflict of interest policy dates back to 1976. At that time GEICO was the preferred risk carrier in a group of companies. The standard company was Criterion Insurance company, now known as GEICO Indemnity. GEICO had more business than it had surplus to support, so it elected to terminate its agency appointment countrywide. The standard company, Criterion Indemnity, continued representation agreements with GFRs who were operating at the time. The GEICO companies recognized that after the withdrawal of GEICO, there were insufficient products for a GFR to continue to survive without having a preferred carrier, so permission was given to each of the GFRs to obtain a representation agreement with a preferred carrier other than GEICO. In 1978 GEICO returned to the market and offered a majority of the remaining GFRs new appointments. Part of the new agreement was that the GFRs would represent GEICO companies exclusively, and over time would cease handling the preferred risk carriers with whom they had been dealing. The GFRs were not to write new business for the other company, but could take a period of time to dispose of their old business. Over the next couple of years, the relationships with the other insurance companies were gradually disposed of by most of the GFRs. While the majority of GFRs returned to exclusive representation of the GEICO companies, a few developed subterfuges which would allow them to continue representing the other preferred risk company while giving the appearance of exclusive representation of GEICO. These included selling the other company's book of business to a wife or girlfriend who would then handle those policies out of the same or a neighboring building. At the time it was impossible for GEICO to police its GFRs adequately since there were only four zone managers covering one hundred locations around the country. Production comparisons performed by GEICO indicate that when a GFR in a conflict of interest situation is replaced the business increases. However, it was not shown that the increased business was due entirely to the absence of the alleged conflict of interest situation. There was substantial competent evidence to show that GEICO's conflict of interest policy is that GEICO prefers not to appoint an individual who has a close relationship with another individual employed by a competitor in a comparable position. The purpose of the GFR program is to penetrate the military market. The largest carrier in that market is State Farm, followed by Allstate, with GEICO in third place. There were at least three situations where male GFRs had a close relationship with another person in a comparable position that was employed by or representing competing insurance companies simultaneously with the GFR's representation of GEIC0. In first situation the GFR was terminated within the year after GEICO learned the GFR's violation of the exclusivity provision of the GFR agreement. It was only learned later that the GFR had sold this book of business to his girlfriend. In the second situation GEICO began pursuing a solution within a month after learning of the conflict. The wife of the GFR disposed of her book of business within the year, and the GFR retired within a year and a half. In the third situation there was no proof of joint representation between the GFR and his daughter. However, the situation resolved itself when the daughter took over her father's business, with GEICO's approval, after he became terminally ill. Although it took time to remedy each of these situations, there was no evidence that GEICO agreed to allow the conflict of interest to continue after learning of its existence. There was no evidence that GEICO had ever appointed a GFR where, at the time of the appointment, it was known that the GFR had a close relationship with another individual who had a comparable position with a competing company. The GFR agreement is uniform and the following are pertinent parts of GEICO's General Field Representative's Agreement (Agreement) for appointment: GENERAL Company appoints the G.F.R. to act as its representative.... * * * The G.F.R. agrees to maintain an office from which to conduct Company's business.... The G.F.R. accepts the appointment and agrees to sell. the lines of insurance offered by the Company...further agrees not to sell any lines of insurance directly competitive with those offered by Company.... * * * e. The G.F.R. shall conduct herself in a prudent businesslike manner; she shall exercise her own judgment as to the time and manner of her performance under this Agreement, and she shall be free to exercise her own judgment as to the persons from whom she will solicit applications for the lines of insurance provided by Company and the time and place of such solicitation. Nothing contained herein shall be construed to create the relationship of employer and employee between Company and the G.F.R. (Emphasis Supplied). * * * ACCOUNTING The G.F.R. shall render to the Company a daily accounting of all business...shall pay over...shall maintain bank account. approved by Company...shall not use this account for any other purpose.... The G.F.R. shall keep true and complete records and accounts of all of her transactions under this Agreement.... Company may audit the accounts. of the G.F.R. at any time without prior notice of such audit being given to the G.F.R.... * * * ADVERTISING Company may conduct independent advertising campaigns in the territory assigned to the G.F.R. The G.F.R. shall not insert any advertisements respecting Company... without first obtaining the consent of Company in writing.... PROPERTY OF COMPANY Any forms or other supplies or equipment of Company...shall always remain the property of Company.... EXPENSES OF GENERAL FIELD REPRESENTATIVES The G.F.R. shall pay all expenses which she incurs in connection with carrying out this Agreement.... OTHER REPRESENTATION The G.F.R. may represent other companies, provided prior approval for such representation is secured in writing by the G.F.R. from Company. * * * 9. TERMINATION OF AGREEMENT a. This Agreement may be terminated by either the Company or the G.F.R. upon 60 days' written notice to the other. * * * 11. BOND The G.F.R. shall be bonded in accordance with the requirements set forth by the Company. All bond premiums will be paid by the Company.... While GEICO may suggest office hours, it does not control the hours a GFR or his employers work or what hours the - office is open. While GEICO must approve the location of the office, it does not exercise complete control over the office location. The GFR is paid a salary based on the commissions earned as set forth in the schedule of commissions. GEICO does not withhold income taxes or pay social security taxes for the GFR or the GFR's employees. GEICO does not control: the hiring, firing, and salary of the G.F.R.'s employees; the office equipment purchased or the office decor; whether the GFR purchases or leases office space, and how much vacation or sick leave the G.F.R. takes or gives his employees. Although GEICO has a pension plan, profit sharing plan and a health plan for its employees, the GFR are not in those plans. Generally, GEICO sells insurance by direct mail and this is the bulk of its business. Therefore, does not spend, or is it required to spend, any significant amount of time with the GFRs and, as a result, GEICO's supervision of the GFRs is minimal. The GFR program is the only area of GEICO's business in which there is agency representation. The GFR business does not generally see growth because of renewals of previously sold policies. The GFR's only get renewal commissions for three years, therefore, there is no renewal commission after the fourth year. There were no positions comparable to the GFR position available to Petitioner in the Jacksonville area at the time she left employment with Butterfield. During time Petitioner was denied appointment as a GFR by GEICO, a number of women were appointed as GFR's by GEIC0, mainly in Texas. There is substantial competent evidence to show that GEICO's conflict of interest policy was based on a bona fide business necessity in that a conflict of interest situation such as GEICO was attempting to avoid presents a real potential for abuse and is a legitimate basis for the policy.
Recommendation Based upon the foregoing Findings of Fact, the Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses, it is, therefore RECOMMENDED that the Florida Commission on Human Relations enter a final order denying relief to the Petitioner, Lynn Cattin, and dismissing the Amended Petition For Relief. DONE AND ENTERED this 1st day of November, 1989, in Tallahassee, Leon County, Florida. WILLIAM R. CAVE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division f Administrative Hearings this 1st day of November, 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE NUMBER 88-5687 The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Lynn Cattin Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the Petitioner's proposed finding of fact: 1(1); 2(2); 3(3- 5); 4(6,7); 5(4); 6(8); 7(6,9,11) 8(10); 9(5); 10(12); 11(13); 12(14); 13(31); 14(15,16,18); 15(18,19); 16(19); 17(20); 18(20,21); 19(29); 20(19); 21(41); 22(21); 23-24(32- 36); 26(38) and 27(22). Proposed finding of fact 25 is neither material nor relevant to the conclusion reached in the Recommended Order. Specific Rulings on Proposed Findings of Fact Submitted by Respondent, GEICO Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the Respondent's proposed finding of fact: 1(3); 2(4); 3(3); 4(1,2); 5(5,6); 6(13); 7-8(14); 9(15); 10(16); 11(17); 12 (16); 13(21); 15(31); 16(34-35); 17 (32-36); 20(38); 21(39); 22(36); 23(37); 25(40); 26(12) 28(12); 29(23); 30(24); 31(25); 32(26); 33-34(27); 35(28); 62*(42). *The last paragraph is numbered 52, however, it appears to be a "typo" and should be numbered 62. Proposed findings of fact 14, 18, 19, 24, 27, and 54 are neither material nor relevant to the conclusion reached in the Recommended Order. Proposed findings of fact 36-53 and 55-61 are unnecessary, but see Finding of Fact 29. COPIES FURNISHED: Donald A. Griffin, Executive Director Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1925 Dana Baird, Esquire General Counsel 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1925 Margaret Jones, Clerk Florida Commission on Human Relations 325 John Knox Road Building F, Suite 240 Tallahassee, Florida 32399-1925 John F. MacLennan, Esquire KATTMAN, ESHELMAN & MacLENNAN, P.A. 1920 San Marco Boulevard Jacksonville, Florida 32207 John S. Derr, Esquire GRANGER, SANTRY, MITCHELL & HEATH, P.A. Post Office Box 14129 Tallahassee, Florida 32317
Findings Of Fact The parties stipulated to findings of fact set forth in paragraphs 1.-10., below. Stipulated Facts A call for bids was published by Respondent, Florida Board of Regents, for BR-198, Veterinary Medicine Teaching Hospital Expansion - Phase II (BR-198), located at the University of Florida, Gainesville, Florida, in the publication known as the Florida Administrative Weekly. Sealed bids were received on February 21, 1991, at which time the bids were publicly opened and read aloud. On February 27, 1991, Dooley and Mack Constructors, Inc. (Petitioner) was informed by the University of Florida that the first and second apparent low bidders for the project did not meet MBE requirements, and that Petitioner was now the apparent low bidder for the project. The University requested that Petitioner submit its MBE good faith efforts for review. On March 1, 1991, Petitioner was informed by the University of Florida that it failed to meet the MBE good faith effort requirements, and therefore, its bid was rejected. The reason for rejection of Petitioner's bid was that Petitioner's advertisement for MBE participation, as part of its demonstration of good faith effort, did not appear in the media at least seven days prior to bid opening. Intervenor, the next apparent low bidder, submitted good faith efforts for review by the University and was determined to be the lowest responsive bidder. Intervenor was awarded the project by the Chancellor of the Florida Board of Regents on March 18, 1991. By letter dated March 19, 1991, Petitioner was advised that the Chancellor had awarded the contract to Intervenor. Petitioner was provided an opportunity to file a notice of protest pursuant to Section 120.53(5), Florida Statutes. Petitioner filed a timely notice of protest with Respondent on March 22, 1991. Petitioner timely filed a formal bid protest in regard to this project which was received by Respondent on March 27, 1991. By facsimile (FAX) letter dated February 13, 1991, Petitioner requested that the Gainesville Sun, a newspaper in Gainesville, Florida, run an advertisement for one day to solicit bids from qualified MBE companies for BR- 198. The advertisement was published in the February 18, 1991 edition of the newspaper. The Project Manual, Section 1-3 of 1-10 Pages, Special Conditions section, paragraph 1.7.2.2., provides that advertisements for minority business enterprises must run or be published on a date at least seven days prior to bid opening. Other Facts The Project Manual is an assembled volume which contains instructions to bidders, bidding requirements, sample forms, and contract conditions and specifications for BR-198. A special condition of the bid requires that at least 15 percent of the project contract amount be expended with MBEs certified by the Department of General Services. 1/ In the absence of compliance with this requirement, a bidder must demonstrate that good faith efforts were expended to comply. A contractor desiring to demonstrate that a good faith effort was undertaken to meet the 15 percent goal is required by the bid's special conditions to have advertised to inform MBEs of subcontracting opportunities. The importance of advertising is to alert the minority community regarding projects that are out for bid and are available to subcontractors. The advertisements must have been run in trade association, or minority-focus media, or a local newspaper with a minimum circulation of 25,000. Advertisements must be run or published a minimum of seven days prior to bid opening. Petitioner's advertisement in a local newspaper, the Gainesville Sun, was not published until February 18, 1991, only three days prior to the February 21, 1991 bid-opening. Further, the advertisement was not faxed to the newspaper until February 13, 1991, and then with the written request to "please place as soon as possible and run for one day." A letter from the newspaper to Petitioner stated that the legal notice advertisement was published on February 18, 1991, as opposed to February 16, 1991, due to a date error on their FAX machine. The latter date, even if publication had occurred, would not have complied with bid requirements. Petitioner also submitted a project notice published in the construction industry bulletins F.W. Dodge Reports, dated February 1, 1991; CMD Reports, dated February 18, 1991; and the Mid State Notifier, dated February 1, 1991. The notices listed Petitioner as well as other bidding contractors. However, it is specifically found that no direct admissible evidence supports Petitioner's responsibility for initiating publication of these notices, a requirement of the good faith effort. Specifically, the notices were published as the result of information received by the publications from the University of Florida. Therefore, good faith efforts on Petitioner's behalf may not be established by either publication, regardless of publication date. Moreover, the F.W. Dodge Reports, CMD Reports, and the Mid State Notifier are private subscription publications directed toward the construction industry in general as opposed to any particular trade in the construction industry. Further, these publications are not directed to or focused on minority businesses. A trade association publication is generally published by not-for-profit associations, such as the Association of General Contractors, and various trade unions. Petitioner did not comply with advertising requirements related to a good faith effort, a prerequisite for bid award. Petitioner's failure to comply with constitutes a material defect in Petitioner's bid response.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered granting the award of the bid in BR-198 to Intervenor as the lowest responsible bidder. DONE AND ENTERED this 27th day of June, 1991, in Tallahassee, Leon County, Florida. DON W. DAVIS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of June, 1991. APPENDIX TO RECOMMENDED ORDER CASE NO. 91-2703BID The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings. 1.-10. Adopted in substance, although not verbatim 11.-14. Rejected, unnecessary. Adopted in substance, though not verbatim. Rejected, unnecessary. Rejected, unnecessary, argumentative Adopted. Intervenor's Proposed Findings. 1.-16. Adopted in substance, though not verbatim. 17-18. Rejected, unnecessary. Respondent's Proposed Findings. 1.-10. Adopted in substance. 11.-22. Adopted in substance, though not verbatim. 23.-24. Rejected, unnecessary. 25.-40. Adopted in substance, though not verbatim. COPIES FURNISHED: William R. Dooley, Esq. 2070 Ringling Blvd. Sarasota, FL 34237 Jane Mostoller, Esq. Florida Board of Regents Suite 1522 325 West Gaines St. Tallahassee, FL 32399-1950 Alfred J. Malefatto, Esq. 777 South Flagler Drive Suite 310-East West Palm Beach, FL 33401 Chancellor Charles B. Reed State University System of Florida 107 West Gaines St. Tallahassee, FL 32399-1950
Findings Of Fact The underlying case for which attorneys fees in the undisputed amount of $2,775.00 are sought involved a 1992 application by Union Trucking, Inc. for recertification by the Florida Department of Transportation (FDOT) as a disadvantaged business enterprise (DBE). Union Trucking, Inc. had originally been certified by FDOT in 1988, and upon successive applications for certification, had been recertified by FDOT in 1989, 1990 and 1991. Recertification was applied for on July 20, 1992 and denied on December 14, 1992. A request for formal hearing followed on January 15, 1993 and the case proceeded before the Division of Administrative Hearings (DOAH) until FDOT recertified Union Trucking, Inc. on October 15, 1993. On November 17, 1993, DOAH hearing officer P. Michael Ruff entered an order relinquishing jurisdiction, which resulted in FDOT's December 17, 1993 final order. FDOT's final order was entered on the grounds that certification had been granted, did not alter the recertification terms, and dismissed the request for formal hearing. On February 14, 1994, less than sixty days after entry of the FDOT final order, Petitioner filed its original "Application for Award of Attorneys Fees Pursuant to F.S. 57.111," hereafter "petition." On March 2, 1994, FDOT filed a response, which, although no motion to dismiss was filed, addressed assorted insufficiencies of the petition. FDOT's response did not raise any timeliness bar. An order of dismissal with leave to amend within fifteen days was entered by the undersigned hearing officer on April 21, 1994. The amended petition was filed May 11, 1994, and FDOT filed its response on May 26, 1994, still not asserting any timeliness bar. At formal hearing, the parties stipulated that the only issue for consideration was whether or not FDOT had been substantially justified in denying the 1992 recertification. Otherwise, it was undisputed that Petitioner is a small business party; that FDOT was not merely a nominal party; that the employment, amount of fee, and hours worked by Petitioner's counsel were as stated in the pleadings, and that there were no "unusual circumstances" as contemplated within the applicable statute and rule. The undersigned hearing officer suggested that the parties include in their post-hearing proposals arguments directed to timeliness, vel non, of the attorney's fee and costs petition, and thus, whether or not DOAH has jurisdiction of this case. With regard to the "substantial justification" issue, it is necessary to review the DBE process since 1991. Union Trucking, Inc.'s 1991 application for recertification was received by FDOT on April 30, 1991. Documents submitted to FDOT by Union Trucking, Inc. in conjunction with the 1991 application revealed that Petitioner corporation had undergone an ownership change on April 1, 1991, approximately 29 days prior to submittal of the 1991 application, which ownership change had transferred 49 percent of Union Trucking, Inc.'s corporate stock from Denise Willis to Robin P. Wilson; that the new owner, Robin P. Wilson, did not list any employment on her resume other than at Pritchett Trucking, Inc.; that Union Trucking, Inc. had a business relationship with Pritchett Trucking, Inc.; and that the new 49 percent owner of Union Trucking, Inc., Robin P. Wilson, is the daughter of Marvin Pritchett, owner of Pritchett Trucking, Inc. Marvin Pritchett is a white American male. Robin Pritchett Wilson is a white American female. Denise Willis, who previously owned the 49 percent of Union Trucking, Inc. stock which was transferred to Robin Wilson is also a white American female, and the stepdaughter of Marvin Pritchett. From Union Trucking, Inc.'s inception and at all times material, 51 percent of Union Trucking, Inc.'s stock has been owned by Warren Lee, a black American male. At all times material, Union Trucking, Inc. has been 100 percent owned by disadvantaged classes (female and black). At all times material, FDOT did not break down its disadvantaged certifications as to "black" versus "female" for purposes of categorizing DBE status, but only looked to whether or not at least 51 percent of the stock was owned by a member(s) of a disadvantaged class. FDOT has no rule specifically requiring that all owners work in the business, only that day to day control be in the hands of the disadvantaged class. FDOT conducted an on-site visit to Union Trucking, Inc. on July 22, 1991, at which time FDOT requested additional information as to Robin Wilson's employment with Union Trucking, Inc. and was notified that Robin Wilson spent approximately one to two hours per day working for Union Trucking, Inc. FDOT also inquired about Union Trucking Inc.'s business relationship with Pritchett Trucking, Inc. and received the explanation that the relationship was "like any lease owner with the company they lease with." DBE personnel at FDOT did not understand what this response meant, but they did not inquire further in 1991. Instead, the FDOT DBE certification committee voted to recertify Union Trucking, Inc. with a special monitor, because there were undefined "concerns" and unidentified "feelings" about the eligibility of Union Trucking, Inc. At formal hearing, FDOT personnel were very clear that recertification in 1991 with a "special monitor" meant that when Union Trucking, Inc. came up for recertification in 1992, an on-site review must be conducted. Prior to receiving Union Trucking, Inc.'s July 20, 1992 application for recertification, FDOT was notified by the Department of General Services (DGS) that DGS also had "concerns" about Union Trucking, Inc. On September 10, 1992, DGS notified FDOT that DGS had denied Union Trucking, Inc.'s application to DGS for Minority Business Enterprise (MBE) certification, that the DGS denial had been upheld at a DOAH hearing, and that FDOT would be provided a copy of the DOAH hearing officer's recommended order. FDOT subsequently received a copy of that recommended order which had been entered September 9, 1992. FDOT's Minority Programs Office Manager testified that, in his opinion, the recommended order in the DGS case (Exhibit DOT 9) "verified" the FDOT "concerns" expressed during the 1991 FDOT recertification process, but he defined those concerns as independent financing. The FDOT DBE certification committee chairperson testified that the recommended order addressed concerns expressed during the 1991 FDOT recertification process, but he defined the concerns differently, as lack of independency from familial relationships, i.e. control, and financial relationships of family corporations. Both men considered FDOT's and DGS' rules to be substantially similar. In fact, the September 9, 1992 recommended order to DGS involved a different agency (DGS) than FDOT, a different statute (Section 287.0943 F.S.) than the one authorizing FDOT's DBE program and different rules (Rules 13A- 2.005(4)(a) and (b) and 13A-4 F.A.C.) than the ones administered by FDOT. FDOT is required to operate under Section 337.135 F.S. and administer Rules 14-78.002 and 14-78.005 F.A.C. Also, the recommended order focused on a legal conclusion that Union Trucking, Inc. was financially dependent, or at least at the time of its corporate "start-up" in 1986 was financially dependent, upon Pritchett Trucking, Inc. The recommended order stated, in pertinent part, as follows: . . . co-owner of the applicant is Pritchett's daughter and a natural subject of his goodwill and generosity, such a relationship is prohibited by the statute, [referring to Section 287.0943 F.S.] Similarly, her service as a director of Pritchett corporation, carrying on Union's business from her desk at Pritchett Trucking is natural, but estab- lishes a prohibited relationship. [Bracketed material added her for clarification]. Upon receipt of the DGS recommended order, FDOT did not seek further explanatory information from the applicant, as was FDOT's standard procedure under its normal operation. Further, FDOT did not follow its own specially prescribed procedure for certified DBEs with "special monitor" status, in that FDOT did not conduct a new 1992 on-site review. Instead, two months later, FDOT sent its December 14, 1992 denial letter. The FDOT employee who prepared the letter testified that the letter denial was based on her review of all the information already in FDOT's DBE file on Union Trucking, Inc., upon the audio tape of the old 1991 on-site review interview, and upon corporate records of the Secretary of State. The FDOT letter, however, closely tracked the DGS recommended order but denied recertification by FDOT on the basis of FDOT Rules 14-78.005(7)(c)1. and 2.c. and 14-78.005(7)(a) F.A.C. It also stated that Union Trucking, Inc. was not an independent business entity or a small business concern and that there was an "affiliate" relationship under FDOT rules due to "Susan [sic] Wilson." It renamed Robin Wilson and also extrapolated a great deal of financial information that appears to come directly from the DGS recommended order. As a result of FDOT's denial of its 1992 recertification application, Union Trucking, Inc. requested a formal hearing. During the progress of that case before DOAH, FDOT received a copy of an affidavit by Robin Wilson in which she stated that Union Trucking, Inc. only purchased parts and fuel from Pritchett Trucking because Pritchett's Lake Butler terminal was the least expensive and most convenient source. Ms. Wilson also stated that Union Trucking, Inc. had not received any loans from her father's companies in four to five years, and that there were no current outstanding loans. In an effort to negotiate the issues and resolve matters without formal hearing before DOAH, FDOT finally conducted an on-site review in July 1993. Documentation was provided by Union Trucking, Inc. to show that all recent transactions with any of Marvin Pritchett's companies were properly invoiced "arm's length" transactions and that Union Trucking, Inc. dealt with many other companies as well; that Union Trucking, Inc.'s old debts to Marvin Pritchett's companies had been retired with zero balances prior to Union Trucking, Inc.'s 1992 recertification application to FDOT; and that Union Trucking, Inc. had three trucks and trailers normally being used full-time in its business. Random samplings by FDOT's consultant during this on-site review confirmed the information in the possession of FDOT prior to the 1992 application for recertification, most of which had been provided and was already in FDOT's possession as early as April 30, 1991. If FDOT had inquired concerning any loans at the time it received the recommended order in September 1992, it would have determined that all loans to Union Trucking, Inc. from any of Marvin Pritchett's various enterprises had been paid off prior to Union Trucking, Inc.'s 1992 recertification application to FDOT. FDOT's consultant's report after the 1993 on-site review determined that there currently were no "affiliated" firms under FDOT rules. It also appears from the report that FDOT then accepted that Robin Wilson split her time between office management for Union Trucking, Inc., running her own company named "Robin Pritchett Trucking Inc.," and working for her father's "[Marvin] Pritchett Trucking Inc." Having clarified these matters, FDOT no longer had problems or concerns with such an arrangement. Union Trucking, Inc.'s records on file for contract work with FDOT through other contractors also reflected use of owned trucks and drivers employed by Union Trucking, Inc. FDOT then recertified Petitioner effective October 15, 1993. At the attorney's fee and costs hearing herein, FDOT presented evidence that it did not have the correct location address for Union Trucking, Inc. when its personnel went to the July 1993 on-site review. This evidence does not justify FDOT's 1992 denial. Union Trucking, Inc.'s corporate office had moved a few weeks previous to the 1993 on-site review. Since Union Trucking, Inc. and its lawyer had been in constant communication with FDOT during the litigation phase of the recertification denial case, consistently urging an on-site inspection, any failure by Union Trucking, Inc. to clarify the geographical relocation of its office in 1993 was either an oversight or an innocent miscommunication. This change of address was not noted in Union Trucking, Inc.'s 1992 reapplication because the move had not yet occurred when that reapplication was submitted in July of 1992. Obviously, FDOT did not use the 1993 failure to notify the agency of a change of address as a reason to deny recertification in 1992, and FDOT also did not consider it a sufficiently serious flaw to withhold recertification after the July 1993 on-site review. FDOT also presented evidence that Robin Wilson did not tell the agency that she owned 100 percent of another corporate entity, "Robin Pritchett (her maiden name) Trucking, Inc." until the July 1993 on-site review. FDOT's two on- site reviewers concurred that "Robin Pritchett Trucking," consisting of one truck, which was sporadically used to haul wood chips, was never any cause for FDOT's concern. Apparently, FDOT considers hauling wood products to be an entirely different industry than the hauling of highway aggregates, which is the type of work done on FDOT contracts and the type of work done by Union Trucking, Inc. While Robin Pritchett Wilson's "affiliation" with her own independent corporation, "Robin Pritchett Trucking, Inc.," possibly was the type of "affiliation" which she should have disclosed, pursuant to FDOT's DBE rule, on Union Trucking Inc.'s 1992 application for recertification by FDOT as a DBE, it is clear that FDOT did not know of this nondisclosure when the agency denied recertification in December 1992. FDOT did not deny recertification at that time for that reason. FDOT also did not consider such nondisclosure to be a sufficiently serious flaw so as to withhold recertification after the disclosure at the July 1993 on-site review. Also, FDOT never asserted that its personnel had been confused in 1992 between "Robin Pritchett Trucking, Inc." and "[Marvin] Pritchett Trucking, Inc." Therefore, this late disclosure does not justify FDOT's 1992 denial of certification. In its July 1993 on-site review, FDOT investigated but found no barrier to recertifying Union Trucking, Inc. under the statutes and rules FDOT administers. There were no barriers related to familial relationships, related to Robin Wilson's being an owner of her own corporation, related to her being a director of any corporation, related to her owning a nominal number of stock shares in Marvin Pritchett's several businesses, related to her use of Pritchett's desk or office equipment, related to Pritchett loans to Union Trucking, Inc., related to Mr. Lee's use of a special account, or related to any other factual reason cited in either FDOT's December 14, 1992 denial letter or the September 9, 1992 recommended order affecting DGS. Nonetheless, FDOT's consultant's closing comments in the 1993 on-site report sum up FDOT's continuing overall approach to Union Trucking, Inc., both before the 1993 on-site review and thereafter. This approach is to "continue to question" successful DBEs whose principals have successful families and successful corporate investments. He wrote: Because of the close family relationships and multiple companies owned or operated, this firm will continue to be questioned as to eligibility for the DBE program. Any concerns I have remaining can only be resolved through the actual job perform- ance and compliance on future projects. I strongly recommend a continued compliance report be addressed with detailed concerns to support the next certif- ication provided the firm is recertified.
Findings Of Fact Petitioner has operated an ACLF in Palatka since 1976. Her license became invalid when she relocated her facility on March 1, 1982. She herein seeks licensure at 203 Moody Road, her present location. Petitioner will purchase the Moody Road facility from the University of Florida. The National Heritage Foundation, a nonprofit organization, will obtain title to the property when the transaction is completed. Petitioner will serve as a "trustee" for the National Heritage Foundation and will operate the ACLF as a nonprofit business. The Moody Road property also contains space to be rented to non-ACLF clients. The income from these rentals is to be combined with the ACLF income to cover expenses and mortgage payments. Petitioner's agreement with the University of Florida and the National Heritage Foundation requires her to perform specified improvements on the property in lieu of certain payments. Petitioner has allocated cost free labor to building maintenance. Such labor is to be obtained from prisoners furnished by the Florida Department of Corrections to volunteer or charitable activities. Petitioner has obtained preliminary assurance that she qualifies for these services. Additionally, Petitioner will obtain operations assistance from local volunteer agencies and plans to allocate no salary for her services or those of her family members. She is also willing to commit personal and family assets to the operation if necessary. The value of these assets was not established. Petitioner's amended application fails to clarify the status of the contract with the University of Florida, and there was no legal document produced which established her trusteeship with the National Heritage Foundation. Her balance sheet and income statement indicate that the operation will generate sufficient initial income to cover anticipated expenses with the exception of depreciation. However, various deficiencies and discrepancies are apparent in these financial statements and they cannot be considered entirely reliable. Since the purchase of the property is not yet complete, and the projected income and expense figures are necessarily speculative, such deficiencies must be tolerated by reviewing authorities. Petitioner is an experienced ACLF operator and is an established member of the Palatka business and social community. She is therefore well situated to obtain assistance with any financial or operational problems she may encounter.
Recommendation From the foregoing, it is RECOMMENDED: That Respondent enter a final order granting Petitioner's application for a license to operate an Adult Congregate Living Facility at 203 Moody Road, Palatka, Florida. DONE and ENTERED this day of January, 1983, in Tallahassee, Florida. R. T. CARPENTER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 27th day of January, 1983. COPIES FURNISHED: Mrs. Gloria Gilbert 203 South Moody Road Palatka, Florida 32077 James A. Sawyer, Jr., Esquire District Legal Counsel 2002 Northwest 13th Street, 4th Floor Gainesville, Florida 32601 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301
The Issue Whether Petitioner should have been awarded the contracts for Florida Department of Transportation (FDOT) Project No. 99004-3589 and FDOT Project No. 86999-3504.
Findings Of Fact On March 16, 1990, the Florida Department of Transportation entered the following Final Order in Case No. 89-3072: By certified mail, on March 5, 1989, the FLORIDA DEPARTMENT OF TRANSPORTATION (DEPARTMENT) gave notice to Petitioner, SIGNAL CONSTRUCTION COMPANY, INC., of intent to suspend their Certificate of Qualification pursuant to Fla. Admin. Rule 14-23 for unsatisfactory progress of work on State Project Nos. 10000-3352, 10500-3638 and 10500-3635. On May 15, 1989, Petitioner received such notice and requested an administrative hearing. The matter was referred to the Division of Administrative Hearings. Prior to hearing, the Petitioner filed a Notice of Voluntary Dismissal Without Prejudice. On December 6, 1989, the Hearing Officer, K. N. Ayers, entered an order closing the filed and cancelling the hearing. Therefore, it is ORDERED that SIGNAL CONSTRUCTION COMPANY, INC. is determined to be delinquent on State Projects 10000-3352, 10500-3638 and 10500-3635; and IT IS FURTHER ORDERED that the Certificate of Qualification of SIGNAL CONSTRUCTION COMPANY, INC. is suspended as of the date of this Order and the suspension shall continue until State Projects 10000-3352, 10500-3638 and 10500-3635 are conditionally accepted by the DEPARTMENT and for 296 days thereafter (May 26, 1989 to the date of this Final Order). During the period of suspension, neither SIGNAL CONSTRUCTION COMPANY, INC., nor its affiliates shall bid on any DEPARTMENT OF TRANSPORTATION construction contract regardless of the amount of bid, nor be approved as a subcontractor on any DEPARTMENT contract. DONE AND ORDERED this 16th day of March, 1990. The Florida Department of Transportation's (FDOT) District IV consists of the following Florida Counties: Indian River, St. Lucie, Martin, Palm Beach, and Broward. At the times pertinent to this proceeding, Teresa Martin was the Assistant District Contracts Administrator of FDOT District IV whose responsibilities included the letting of construction and maintenance contracts for projects that do not exceed $250,000. On or about October 12, 1990, Signal Construction Company (Signal), in response to advertisements for bids, requested bid documents from the District IV staff for several projects that were to be let. Included in those projects were State Job Numbers 86999-3504 and 99004-3589. Because of the dollar limit on these projects, it was within Ms. Martins's authority to review the responses and to award the bids. Prior to providing the bid documents to Signal, Ms. Martin had a member of her staff check the suspended bidders list to verify that Signal was not a suspended bidder. Because the list was outdated, Signal was not listed on the suspended bidder list used by District IV, and the bid documents were furnished to Signal. Signal did not advise the District IV staff that it had been suspended because it had challenged the suspension and was involved in litigation with FDOT over the suspension. Signal knew of the order entered by FDOT on March 16, 1990, but considered its suspension abated until resolved by the pending litigation. Pursuant to Signal's request, FDOT assembled a set of bid documents for State Job Numbers 86999-3504 and 99004-3589 as requested by Signal and delivered the same to Signal. FDOT also prepared and delivered an invitation to bid which solicited Signal's bid on these projects. Signal, in response, prepared bids for State Job Numbers 86999-3504 and 99004-3589 and at least one other project that FDOT had advertised. The invitation to bid advised bidders that bids would be accepted until November 2, 1990, at 10:30 a.m., and that there would be a mandatory pre-bid conference for these projects on October 23, 1990. In accordance with the requirements of the invitation to bid and the pertinent bidding documents, representatives of Signal attended the mandatory pre-bid conferences for State Job Numbers 86999-3504 and 99004-3589. Representatives of Signal signed the roster of attendance. Thereafter, Signal continued preparation of its competitive bids for projects State Job Numbers 86999-3504 and 99004-3589. On October 29, 1990, FDOT prepared and issued an addendum to the bid documents for both project 86999-3504 and for project 99004-3589. These addenda were delivered by FDOT to Signal by express mail, return receipt requested. Both addenda notified Signal, as a potential bidder, that the deadline for the submission of bids had been extended to Friday, November 9, 1990, at 1:30 p.m. Signal timely submitted competitive bids for State Job Numbers 86999- 3504 and 99004-3589. Ms. Martin thereafter evaluated all bids submitted for these projects, including the bids of Signal. Ms. Martin intended to award the bids for State Job Numbers 86999-3504 and 99004-3589 to Signal until she was informed by Mr. Reynold Meyer, an attorney for FDOT, that Signal was a suspended bidder. Ms. Martin had not known that Signal had been suspended as a bidder until she was so informed by Mr. Meyer on November 15, 1990. This information was provided Ms. Martin in response to a routine inquiry she made to FDOT's Contract Administration Office in Tallahassee. This inquiry was made even though the bidding documents pertinent to these projects did not require the bidder to hold a Certificate of Qualification to bid or to be prequalified as a bidder. After her conversation with Mr. Meyer on November 15, 1990, Ms. Martin disqualified Signal's bids on State Job Numbers 86999-3504 and 99004-3589. If there had been no question as to whether Signal was eligible to bid, Signal would have been awarded the contracts for both State Job Numbers 86999-3504 and 99004-3589. Neither Ms. Martin or anyone else from FDOT informed Signal that it had been disqualified as a bidder until the bid tabulations were posted by Ms. Martin on November 28, 1990. The Certificate of Qualification that had been suspended by FDOT's Final Order of March 16, 1990, had been issued to Signal on November 3, 1989, and was scheduled to expire on November 30, 1990. The forms necessary for Signal to renew its Certificate of Qualification had been furnished Signal by FDOT's Contracts Administration Office on October 2, 1990. The administrative proceeding in which FDOT's March 16, 1990, Final Order was entered was commenced by FDOT issuing on May 5, 1989, a Notice of Intent to suspend Signal's Certificate of Qualification. Signal challenged the notice and requested a formal administrative hearing in that proceeding. Thereafter, Signal filed a Notice of Voluntary Dismissal Without Prejudice, which resulted in the closing of the file of the Division of Administrative Hearings and the return of the matter to the referring agency. Thereafter, FDOT issued its Final Order on March 16, 1990. Signal appealed the Final Order of March 16, 1990, to the First District Court of Appeal. There was no evidence that any order was entered which stayed the Final Order of March 16, 1990, while the matter was on appeal. Shortly after it voluntarily dismissed the administrative proceeding, Signal filed suit in the Circuit Court in and for Hillsborough County, Florida, in an effort to resolve its dispute with FDOT, which contained a claim by Signal for monetary damages from FDOT. During the period from March 16, 1990, through November 28, 1990, Signal continued to bid for award of contracts let by FDOT based on its unilateral understanding that the Final Order of March 16, 1990, was stayed pending appeal. During this time, Signal was not awarded any FDOT contracts as the prime contractor, but it did perform work as a subcontractor on an FDOT project. It was not established which FDOT officials permitted Signal to continue to bid or who authorized Signal to accept work on an FDOT project as a subcontractor. On November 6, 1990, representatives of Signal and FDOT met in FDOT's District VII offices in Tampa, Florida, in an effort to negotiate a settlement of all matters then in dispute between Signal and FDOT, including the claims asserted in the circuit court action and the matters raised in the appeal of the Final Order dated March 16, 1990. After three offers and counteroffers, the parties were unable to reach settlement. On November 8, 1990, FDOT requested that Fred Young of Signal's parent corporation to meet with Jimmy Lairscey, the District VII Construction Engineer, on November 9, 1990, in an effort to further negotiate a settlement of all issues. Both Mr. Young and Mr. Lairscey had actively participated in the settlement negotiations of November 6, 1990, and these two representatives met again on November 9, 1990. Following this meeting, Signal was informed that verbal settlement had been reached on the matters upon which negotiations conducted on November 6, 1990, had collapsed. At Signal's request Mr. Lairscey advised FDOT District VI that Signal had been reinstated as a qualified bidder for a project that required Signal's prequalification as a bidder. On November 9, 1990, the parties contemplated that the settlement terms would have to be reduced to writing. During telephone conversations following the November 9 meeting between Mr. Lairscey and Mr. Young, counsel for the respective parties became aware that there was a disagreement between them as to the continued validity of the Final Order of March 16, 1990. On November 15, 1990, Mr. Meyer, as counsel for FDOT, wrote Signal's counsel a letter which stated, in pertinent part, as follows: Our conversations on November 9, 13 and 14, all of which took place subsequent to the meeting between Mr. Lairscey and Mr. Young, confirm that our clients have been unable to negotiate a settlement through the date of this letter. In order to avoid confusion, this letter reaffirms the Department has rejected all of your client's offers and your client has rejected all of the Department's counteroffers. As of this date, none of the Department's counteroffers are available for acceptance by your client. This letter confirms, however, the Department's continued willingness to negotiate. On November 17, 1990, John A. Barley, counsel for Signal responded to Mr. Meyer's letter of November 15, 1990. In this response, Mr. Barley summarized the negotiations between Signal and FDOT and asserted the position that settlement had been reached on November 9, 1990. On November 28-30, 1990, representatives of Signal and FDOT resumed negotiations in an effort to resolve the disputes between them through means of a written settlement agreement. On November 28, 1990, Ms. Martin posted the bid tabulations for State Job Numbers 86999-3504 and 99004-3589. Signal learned from the posting of the bid tabulations that it had been disqualified as a bidder on these two projects. Signal did not know prior to the bid posting that FDOT had disqualified it as a bidder on these two projects, although it was aware that FDOT considered the Final Order of March 16, 1990, to be effective. On November 30, 1990, FDOT and Signal entered into a written settlement agreement which provided, in pertinent part, as follows: On March 16, 1990, the DEPARTMENT issued its Final Order in Case No. 89-3072 declaring SIGNAL delinquent on State Project Nos. 10000-3352, 10500-3638 and 10500-3635. In that Final Order, SIGNAL's Certificate of Qualification was suspended from March 16, 1990, until State Project Nos. 10000-3352, 10500-3638 and 10500-3635 are conditionally accepted and for 296 days thereafter. SIGNAL timely filed it Notice of Administrative Appeal resulting in Case No. 90-1094, which is currently pending before the District Court of Appeal, First District. The parties have entered into this Joint Stipulation and Settlement to resolve the subject of appellate Case No. 90-1094 amicably without further litigation. By this Joint Stipulation and Settlement, the DEPARTMENT amends the first sentence of paragraph three of its Final Order in Case No. 89-3072 dated March 16, 1990 as follows: IT IS FURTHER ORDERED that the Certificate of Qualification of SIGNAL CONSTRUCTION COMPANY, INC., is suspended as of the date of this Order (March 16, 1990) until and including the date of the execution by SIGNAL of the Joint Stipulation and Settlement (the 30th day of November 1990). * * * 24. Signal reserves its rights to protest the Department's decision determining Signal a nonresponsive bidder on the two District 4 mini contracts let by District 4 on November 9, 1990. Paragraph 24 of the settlement agreement refers to the projects that are the subject of this proceeding, but it incorrectly reflects that Signal was determined to be a nonresponsive bidder. FDOT disqualified Signal's bids because of the March 16, 1990, Final Order, not because the bids were nonresponsive. The only substantial change made in the terms and conditions of settlement stated in the "Joint Stipulation and Settlement" and the terms and conditions of settlement orally agreed upon on November 9, 1990, was the provision making FDOT's March 16, 1990, Final Order effective through November 30, 1990.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered which dismisses the bid protests filed by Signal. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 6th day of February, 1991. CLAUDE B. ARRINGTON 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 6th day of February, 1991. APPENDIX TO RECOMMENDED ORDER The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner. The proposed findings of fact in paragraph 1 are adopted in part by the Recommended Order, and are rejected in part as being subordinate to the findings made. The proposed findings of fact in paragraph 2 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 3 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 4 are adopted in part by the Recommended Order, and are rejected in part as being subordinate to the findings made. The proposed findings of fact in paragraph 4 are adopted in part by the Recommended Order, and are rejected in part as being subordinate to the findings made or as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 6 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 7 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 8 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 9 are adopted in material part by the Recommended Order. The proposed findings of fact contained in the last sentence of paragraph 9 are considered preliminary matters. The proposed findings of fact in paragraph 10 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 11 are adopted in part by the Recommended Order, and are rejected in part as being unsubstantiated by the record. The proposed findings of fact in paragraph 12 are adopted in part by the Recommended Order, and are rejected in part as being unsubstantiated by the record. The proposed findings of fact in paragraph 13 are adopted in part by the Recommended Order, and are rejected in part as being unsubstantiated by the record. The proposed findings of fact in paragraph 14 are adopted in part by the Recommended Order, and are rejected in part as being unsubstantiated by the record. The proposed findings of fact in paragraphs 15 are adopted in part by the Recommended Order, and are rejected in part as being subordinate to the findings made. The proposed findings of fact in paragraph 16 are adopted in material part by the Recommended Order, and are rejected in part as being subordinate to the findings made. The proposed findings regarding the request to have Mr. Lairscey notify District IV of the reinstatement of Signal is rejected as being contrary to the greater weight of the evidence. The proposed findings of fact in paragraph 17 are rejected as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 18 are adopted in part by the Recommended Order and are rejected in part as being contrary to the findings made. The proposed findings of fact in paragraph 19 are adopted in part by the Recommended Order and are rejected in part as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 20 are rejected as being unnecessary to the conclusions reached. The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent. The proposed findings of fact in paragraph 1 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 2 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 3 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 4 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 5 are adopted in part by the Recommended Order and are rejected in part as being subordinate to the findings made. The proposed findings of fact in paragraph 6 are adopted in part by the Recommended Order and are rejected in part as being subordinate to the findings made. The proposed findings of fact in paragraph 7 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 8 are adopted in part by the Recommended Order and are rejected in part as being subordinate to the findings made. The proposed findings of fact in paragraph 9 are rejected as being subordinate to the findings made. COPIES FURNISHED: John A. Barley, Esquire John A. Barley & Associates, P.A. 400 North Meridian Street P.O. Box 10166 Tallahassee, Florida 32301 Susan P. Stephens, Esquire Assistant General Counsel Florida Department of Transportation 605 Suwannee Street, MS-58 Tallahassee, Florida 32399-0458 Ben G. Watts Secretary Department of Transportation Haydon Burns Building, M.S. 58 605 Suwannee Street Tallahassee, Florida 32399-0458 Attention Eleanor F. Turner Thornton J. Williams General Counsel Department of Transportation Haydon Burns Building, M.S. 58 605 Suwannee Street Tallahassee, Florida 32399-0458
The Issue This proceeding concerns the Respondent's rejection of all bids for construction of its new middle school "FF". Petitioner has challenged that intended action, arguing that it was arbitrary and capricious and contrary to the law. The parties disagree as to the basis for the intended action. Initially the School Board considered rejecting all bids for failure to meet MBE/WBE goals, and Petitioner protested. Later, the Respondent determined that significant revisions to the construction documents were required, and the bids were all rejected on that basis. Petitioner protested again, but contends that the original basis for intended action is still at issue. For reasons set forth in the following recommended order, the MBE/WBE goal issue is moot. The central issue for determination, therefore, is whether Respondent properly rejected all bids based on its determination that substantial changes are required, and Petitioner's motion to consolidate its two protests is DENIED.
Findings Of Fact Petitioner, Mark C. Arnold Construction Co., (Arnold), is a commercial general contracting firm located in Orange County, Florida, but well-experienced in building public facilities throughout the state. Arnold currently is engaged in constructing school "EE" for Respondent, Orange County School Board (School Board, or Board). In January 1992, the school board promulgated an advertisement for bid soliciting bids for the construction of a new school project known as Middle School "FF". The advertisement for bid was published five (5) times in the Orlando Sentinel on January 7, 14 and 28 and on February 4 and 1, 1992. The board also compiled a project manual which among other things contained a copy of the advertisement for bid and instructions to bidders which governed the bidding process. The advertisement for bid reserved the school board's "right to reject any or all bids and to waive any informality or irregularity in any bid received". (Joint Exhibits 1 and 2) The instructions to bidders also reserved the school board's "right to reject any and all bids when such rejection is in the interest of the school board of Orange County, Florida...". (Joint Exhibit 5) The project manual also contained a bid form to be used by bidders. In it the bidder agrees "that the Owner reserves the right to reject this bid, or to waive informalities in any bid,...". Such language was contained in the bid submitted by Arnold. (Joint Exhibits 7 and 9) By addendum dated February 5, 1992 the school board amended and replaced Section A-12 of its project manual and instructions to bidders. Such amendment, among other things, established goals for minority/womens business enterprise (MBE/WBE) subcontractor and supplier participation in the project, and it required any bidder who failed to attain the goals to demonstrate a good faith effort to do so; otherwise, the bid of such bidder would be rejected. (Joint Exhibit 8) Arnold's bid showed that Arnold had no MBE/WBE subcontractor or supplier participation. (Joint Exhibit 9) Arnold's bid was the lowest of eleven bids received by the school board. Arnold's bid was in the amount of $10,977,000.00. The next lowest bid was in the amount of $11,075,000.00. After bids were opened, Arnold promptly contacted the MBE/WBE manager of the school board, and was advised by her to try to obtain MBE/WBE participation to meet the goals; within several days after bid opening Arnold was able to get a total of about 13.5% MBE/WBE subcontractor/supplier participation. Contrary to the MBE/WBE manager's instruction, the addendum to the project manual and bid instructions proscribed any effort after bid opening to attain the MBE/WBE goals and to thereby make a bid responsive. In spite of Arnold's attempt to demonstrate to the MBE/WBE manager that it had made a good faith effort to attain the goals prior to bid opening, the MBE/WBE Manager determined that no sufficient good faith effort was shown by Arnold. On March 5, 1992 the school board furnished to Arnold a written notice of its intended decision to reject all bids because of the failure of all contractors (bidders) to attain the MBE/WBE goals and/or to show compliance with the good faith effort requirement of the contract documents. (Joint Exhibit 11) On March 10, 1992 Arnold and its attorney attended a meeting of the school board for the purpose of appealing the MBE/WBE manager's decision that Arnold had not demonstrated a good faith effort to meet the goals. Mark C. Arnold spoke at length to the school board itemizing actions which Arnold contended showed its requisite good faith effort to solicit MBE/WBE participation. Arnold's attorney also made a presentation at the meeting. By a 6 to 1 vote, the board initially sustained the findings of the MBE/WBE manager that a good faith effort was not shown by Arnold, and rejected all bids because of the failure of all contractors (bidders) to meet the minority participation goal and/or to show compliance with the good faith effort requirements of the contract documents. (Joint Exhibits 12 and 15) Following a work session after its initial meeting on March 10, the board convened again in regular session on March 10, at which time it unanimously voted to reconsider its earlier action of rejecting all bids, and it voted to postpone action of the award of a contract for the construction of Middle School "FF". The effect of that action was to rescind its earlier action rejecting all bids and determining that Arnold had not shown a good faith effort to solicit MBE/WBE participation; and also to postpone action on the entire matter to a future time. (Joint Exhibit 13). On March 20, Arnold filed Formal Protest directed to the board's March 5th Notice of Intended Decision and directed to the March 10 action rejecting Arnold's bid. During or about the first week in April, engineers for the school board met with the school board's attorney, William M. Rowland, Jr., to inform him that significant revisions needed to be made in the site work and sewer plant plans for the Middle School "FF" project. The engineers recommended that because of the need to make such revisions all bids for the project should be rejected and the project should be rebid after the plans were revised. As a result of the early April meeting with the engineers, the board's attorney prepared and delivered a memorandum dated April 7th advising the school board of its engineers' recommendations. The attorney also submitted a resolution which, if adopted, would serve to reject all bids and require a rebidding of the project. (Joint Exhibit 16) On April 10th the school board furnished to Arnold an amended notice of intended decision, which by its express terms replaced, amended and superseded its prior notice of intended decision dated March 5th, and notified Arnold of its intent to reject all bids on the project because of the need to make significant revisions in the construction documents. (Joint Exhibit 17) Said amended notice rendered moot the March 20 formal protest filed by Arnold. At its meeting held on April 14th, the board considered the April 7th memorandum from its attorney. At that meeting, the board heard from its staff engineer, Chuck Greif, who pointed out the revisions needed to the site plans for the Project. (Joint Exhibit 20, pages 59-62, 77-78) Mark Arnold also spoke, contending that the site revisions could be handled by change orders if Arnold's bid were accepted. (Joint Exhibit 20, pages 76-77) Bob Gallardo, the school board Director of Facilities and Planning, advised of problems encountered in the site work and of the need to make significant revisions in the site plans. (Joint Exhibit 20, pages 87-92) As the geotechnical engineer on the job, Charles Cunningham stressed the significance of the site plan changes. (Joint Exhibit 20, pages 96-97) Derek Burke, engineer on the project, confirmed that major redesign needs to be done. (Joint Exhibit 20, page 64) Attorney Rowland advised that the prior intended decision to reject all bids because of failure of all bidders to comply with the MBE/WBE requirements of the bid documents, was moot and no longer before the board for action, and that the only resolution before the board for action was the resolution to reject all bids because of the need to make significant site plan revisions for the project. (Joint Exhibit 20, pages 72-76) The school board unanimously adopted that resolution. (Joint Exhibit 20, pages 97-99; Joint Exhibit 18) On April 23rd Arnold timely filed the written formal protest which is the subject of these proceedings. At the time of the meeting held by on April 14th, there was a need to make significant changes in the site work and sewer plant for the Middle School "FF" project. Such changes formed a valid and legitimate reason for the board to reject all bids. Even at the time of this administrative hearing, some details regarding the site work still needed to be worked out. For example, an outfall is needed for the percolation pond underdrain but it was not included in the project design. The site work and sewer plant changes and revisions could have been handled by change orders between Arnold and the school board, had the board accepted Arnold's bid, since any changes in a project can be accomplished by change orders; however, revising the nature and quantity of construction work by change orders involves the potential for excessive cost to the project owner and change orders always require agreement between the parties. Prudence dictates that when it is known that changes must be made, the bid advertisement should include those changes up front to remove the uncertainty of costs and to put all bidders on equal footing. There has been no showing of any illegality, fraud, oppression or misconduct in the actions of the school board in rejecting all bids on the Middle School "FF" Project and in opting to seek new bids for the project. There has been no showing in these proceedings that the school board's rejection of all bids had the purpose or effect of defeating the object and integrity of competitive bidding.
Recommendation Based on the foregoing, it is hereby, RECOMMENDED: That a Final Order be entered dismissing the bid protests by Petitioner. DONE AND RECOMMENDED this 10th day of July, 1992, in Tallahassee, Leon County, Florida. COPIES FURNISHED: Charles Evans Davis, Esquire 170 East Washington Street Orlando, FL 32801 MARY CLARK 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 10th day of July, 1992. William M. Rowland, Jr., Esquire 1786 North Mills Avenue Orlando, FL 32803 Dr. James L. Schott, Superintendent Orange County School Board P.O. Box 271 Orlando, FL 32802
