Findings Of Fact During the summer of 1994, the Department of Management Services (DMS) began to develop an invitation to bid (ITB), to establish a state contract for the purchase of client server systems. The contract included microcomputers, network/file servers, workstations, workstation servers, and peripherals. The future contract would replace the current state contract between AmeriData and DMS. The process utilized by DMS to establish the ITB included meetings with state users and representatives of the microcomputer vending community. In particular, the pricing methodology for the ITB was developed from user conferences, vendor meetings and pre-bid conferences. DMS had many goals it wished to achieve under the new ITB for computers. These goals included making a wider range of products available to the user agencies, obtaining computer products at better prices than under the current contract, making a more diverse line of commodities available, obtaining the participation of third party vendors and making third party vendor products available. In particular, DMS wanted to enable agencies to purchase integrated "computer systems" consisting of computers with standard and upgradable components at the same discount price as a computer alone when those components are simultaneously purchased with the computer as a system or as computer system bundles. This effort resulted in the drafting of an Invitation to Bid dated September 26, 1994, which was circulated to known vendors for question and comment. The ITB of September 26, 1994 called for bids for statewide support levels I and II for microcomputers, desktop, deskside and portable (Tables 2.1 and 2.2) and for network/file servers (Table 3.0). These items were to be bid as percentage mark-up from dealer cost. Workstation and workstation servers (Table 4.0) and peripherals, (monitors, printers, plotters, network cards, etc.) (Tables 5.1 through 5.9) were to be bid as percentage discounts from the manufacturer's suggested retail price (MSRP). Additionally, if vendors desired to submit a price list for the balance of a vendor's product line, such "balance of line" peripherals were to be offered under the same pricing schedule (a single whole number discount from the MSRP) as the peripherals category (monitors, printers, etc.) which described the balance of line item. The term "balance of line" as used in the ITB was intended to allow a product line vendor to submit a price list on the manufacturer's line of peripherals as well as third party peripherals. In other words, a vendor offering the IBM line of microcomputer systems under tables 2.1, 2.2 and 3.0 could submit a price list for the IBM line of peripherals (monitors, printers, plotters, etc.) under a balance of line price list for tables 2.1, 2.2 and 3.0, and submit a price list for third party peripheral products (Epson printers, Samsung monitors, etc.), under tables 5.1 through 5.9. The initial ITB generated many questions. DMS prepared written responses to the questions it received from various prospective bidders. On November 9, 1994, DMS held its Client/Server System Pre-Bid Conference. The conference was attended by various company representatives who were prospective bidders. The prospective bidders included representatives John Reneger and Lytt Noel from Vanstar Corporation, Dale Kennedy from AmeriData, and Mark Holt and Roy Wade from IBM. At that Pre-Bid Conference the attendees were given 41 pages of questions and the responses to those questions that had been prepared by DMS. Based on questions and comments raised at the November 9, 1994, Pre-Bid Conference, DMS issued Addendum number 2 on November 21, 1994. Addendum number to the ITB contained the bid specifications, attached copies of the pre-bid attendance list, copies of the pre-bid questions and answers, and a list by item of ITB changes. It also contained a document entitled Complex Issues for Follow-up. Later, Addendum number 3 was issued on December 21, 1994, and Addendum number 4 was issued January 10, 1995. Addendum number 3 added two more eligible bidders of products. Addendum number 4 changed the bid opening date to January 11, 1995. On January 11, 1995, the bids were opened. Later the bid tabulation with proposed awards was posted. Vanstar bid two percent cost plus on the product line for IBM microcomputers and offered twelve percent cost plus as its prices for balance of line peripherals. AmeriData bid four percent cost plus for the IBM product line of microcomputers and offered four percent cost plus as its prices for balance of line peripherals. Because Vanstar was the low bid for IBM microcomputers, DMS proposed to award the contract to it. Addendum number 2 was the final substantive addendum to the initial ITB. For purposes of this case, Addendum number 2 was virtually identical to the initial ITB. However, Addendum number 2 changed the pricing methodology for the balance of line items in Paragraph 2.0, on page 19 of the Specifications for the Client Server Systems from discount off manufacturer's suggested retail price to "the same pricing schedule (cost plus) as the microcomputer systems," for that product line. In this case, the microcomputer systems were for the IBM product line. The ITB clearly stated that the balance of line price lists would not be considered in the evaluation or award of the bids. In fact, in response to a specific question on balance of line, DMS in Section T-1, page 25, stated that balance of line items would not be used for evaluation purposes. The ITB specified that DMS intended to negotiate the balance of line items if the price submitted by the vendor was determined to not be competitive. The ITB generally stated how the negotiations would take place. However, the ITB did not define what competitive prices were. On the other hand, it was clear that a contract for balance of line items may not be awarded. The ITB provided on page 10 of the Special Conditions, under balance of line: The Balance of Line price list provisions of this bid/contract are provided for the convenience and benefit of the contract users as well as the awarded vendors. The Division of Purchasing will review and compare balance of line price lists to determine if prices are competitive. Should it be determined by the Division of Purchasing that the balance of line price lists of the awarded contractor are not competitive, the contractor will be given an opportunity to resubmit a negotiated competitive price list. If the contractor is unable or chooses not to reduce prices for Balance of Line products, the Balance of Line will not be awarded. The above language in the ITB was intended to serve as a Notice of Intent to Negotiate. However, DMS did not post the Notice of Intent to Negotiate in the office of the Division of Purchasing as required in Rule 60A- 1.018(2), Florida Administrative Code. Additionally, the evidence did not show compliance with any of the other provisions of the Rule 60A-1.018(2), Florida Administrative Code. The procedure of negotiating the balance of line item with the awarded contractor was further clarified in the question and answer section of Addendum No. 2. On page 19, at P-6, in response to a question requesting explanation of the balance of line items, DMS stated that the Division of Purchasing would review and compare balance of line items to determine whether they were competitive and, if the prices were not competitive, DMS could negotiate with the contractor who was awarded the bid on the microcomputers. At page 8, question E-1, DMS further stated in part that "if the Balance of Line price list submitted as part of Sections 2.1 and 2.0 as specified is not competitive for similar items bid in Section 5.0, then "Balance of Line" prices will be negotiated or excluded from the award for that bidder." Moreover, if the negotiations, should fail, no negotiations will be conducted with any other bidder and no contract for the balance of line items would be entered into. There was no requirement in the ITB that a vendor submit balance of line price lists. The ITB at page 9 stated in part "vendors who bid and are awarded microcomputer systems may offer a Balance of Line." (Emphasis supplied). In short, the balance of line price list was not a bid under the ITB but served to supply information to DMS on the prices of peripherals which would most likely be used for comparison with other bidder's prices on the same peripherals. The award of any balance of line/peripheral contract was not part of the award of ITB 9-250-040-B, but was to be part of a separate process involving negotiation with a specific vendor. AmeriData was aware that submitting a price list for balance of line items was optional and, if it submitted a price list for balance of line items, the information would not be used to evaluate the winning bid for microcomputers under the ITB. The type of negotiations for balance of line identified in the ITB is unique and has never been attempted by DMS in the past. DMS admitted that in selecting this method it did not consider the fact that approximately ten to eleven million dollars out of twenty million dollars in sales or about 50 percent of the sales volume for IBM products from the 1994 contract were for IBM peripherals. Additionally, because the process is new, DMS at the time of hearing, had not decided the specifics of how the negotiations would be conducted, but believes there will be more steps and methodology involved in the actual negotiations, if it occurs, with the successful bidder than are actually documented in the ITB. DMS believes that any negotiations must be in compliance with Rule 60A-1.018(2), Florida Administrative Code, Negotiations After Bid which establishes parameters on the procedures for negotiating contracts for the purchase of commodities or contractual services. However, DMS also believes that the negotiations, if they occur, will be a more informal process than the negotiations mandated under Rule 60A-1.018(2), Florida Administrative Code. In any event, whatever negotiations DMS proposes should comply with Florida Statutes and Rules beginning with the posting of Notice in the office the Division Rule 60A-1.018(2)(b), Florida Administrative Code, the development of a vendor list with rankings Rule 60A-1.018(2)(c), Florida Administrative Code, etc. Given the preliminary status of the negotiation procedure, its brief outline in the ITB and the posting of the ITB cannot form the basis of an intent to negotiate. DMS did not receive any written objections to DMS's plan to award the contract on the bids received for microcomputers under 2.1 without regard to the price list for balance of line items. Likewise, DMS did not receive any written objections to the proposal to negotiate balance of line items with the winning bidder on the microcomputers. However, since the balance of line price lists were not a bid and were not "specifications" in a bid which enable a bidder to receive the bid award, the 72 hour protest time for bids does not apply. On the other hand, since the negotiation procedure is separate from the bid award, the procedure is not properly part of a bid protest under Section 120.53, Florida Statutes. Additionally, protestations of the negotiation procedure should comply with Rule 60A-1.018(2)(b), Florida Administrative Code, which permits protests of the agency's decision to negotiate once a Notice of Intent is posted. The Notice has not yet been posted. Therefore, consideration of the scanty and tenuous plan for negotiations outlined in the ITB is not ripe for consideration. Throughout the ITB, there are predominantly two pricing schemes utilized for microcomputers, peripherals and balance of line items. The two pricing schemes are calculated as a percent discount from the manufacturer's suggested retail price or as a percent discount from the dealer's cost. For example, in the section of the bid, on pages 24 and 25 relating to printers, DMS requires that a person submitting a bid for balance of line items be bid "at the same discount or greater discount rate as the printers." In Section 5.5 relating to input devices, DMS likewise requires that the balance of line be submitted "at the same discount or greater discount rate." In the portion of the ITB relating to microcomputers in Sections 2.0 and 2.1, the ITB requires that the balance of line be offered under the same pricing schedule (cost plus) as the microcomputer systems category of the bid. Under tables 5.2 and 5.5 of the ITB the price lists for balance of line are to be computed using the same percentage rate. In short, the language permits a different percentage mark-up to be submitted on balance of line items as on microcomputers as long as the same pricing scheme or schedule is used, i.e., cost plus as opposed to discount off MSRP. However, Roy Wade, the IBM segment owner for government in the State of Florida, who attended the pre-bid conference and worked with AmeriData on its bid, had several conversations with AmeriData about whether the same percentage had to be used for both microcomputers and balance of line. In fact, there was a difference of opinion in the IBM office as to whether you could use the same or different percentages on the balance of line items and the microcomputers. Mark Holt, in the IBM office and who also attended the pre-bid conference, was of the opinion that a bidder could use different percentages in the balance of line items and the microcomputers. Roy Wade was of the opinion that the same percentage had to be used. Mr. Wade, at the request of AmeriData, met with Mr. Melvin of DMS at Mr. Melvin's office to seek oral clarification regarding pricing of the balance of line items. Mr. Wade testified that Mr. Melvin told him the same percentage mark-up had to be bid. However, Mr. Melvin did not recall making such a statement to Mr. Wade, and did not remember meeting with Mr. Wade during that time period. The normal procedure for visitors to the DMS Division of Purchasing is to sign in. The sign in log does not show any entry for Mr. Wade for this period. In fact, the only date, relevant to this proceeding, for which Mr. Wade signed in was January 5, 1995. During the hearing Mr. Wade stated that it was not uncommon for him to fail to sign in. However, in his deposition Mr. Wade stated that during this time period he visited DMS 5 to 10 times, but failed to sign in on only "a couple" of occasions. Mr. Wade stated that after his meeting with DMS, he again discussed the percentage issue with AmeriData. Mr. Wade relayed what Mr. Melvin had allegedly told him. Mr. Wade encouraged AmeriData to get verification directly from DMS. After this conversation, AmeriData met with DMS personnel on December 21, 1994, on another issue. AmeriData did not ask any questions regarding whether the same percent mark-up had to be used for balance of line and microcomputers. Later around January 5, 1995, AmeriData had a telephone conversation with Mr. Comer of DMS. During the conversation, Mr. Comer allegedly told AmeriData that the same percentage had to be bid. However, Mr. Comer has no recollection of such a statement. Mr. Comer also testified that he was not aware of the percentage issue in January, 1995. Given the discrepancies in the testimony regarding these oral conversations, these oral conversations are simply too vague to credit any alleged statements made by DMS personnel during those conversations, especially since IBM, which entered a separate bid on products under Section 4.0 of the specifications through Mark Holt, bid a separate percentage for balance of line items. Moreover, as indicated earlier, the ITB contains no language specifically stating that the same percentage must be used for balance of line items as for items contained in Tables 2.1, 2.2 and 3.0. While there is language that states that bidders must bid a single whole number percentage mark-up (cost plus) on page 18, the language referring to the balance of line items states only that "such balance of line peripherals shall be offered under the same pricing schedule (cost plus) as the microcomputer systems category of this bid/contract." (Emphasis supplied) However, even if the alleged oral statements by DMS personnel are given credit, the ITB, as provided in all DMS bids, also contained a set of general conditions, Paragraph 7 of which states as follows: Any questions concerning conditions and specifications shall be directed to this office for receipt no later than ten (10) days prior to the bid opening. Inquiries must reference the date of bid opening and bid number. No interpretation shall be considered binding unless provided in writing by the State of Florida in response to requests in full compliance with this provision. (Emphasis supplied) AmeriData, was aware of this provision, but never submitted a written question to DMS regarding the ITB in question. Likewise, at no time did Mr. Wade or AmeriData seek any written clarification from DMS. In short, any oral statements made by DMS regarding the percentage issue is not binding. AmeriData was not justified in relying on such oral statements and should have sought written clarification from DMS. Finally as indicated earlier, the price lists for balance of line items were not part of the bid evaluation process. Therefore, it is irrelevant whether the percent mark-up for balance of line should be the same. The balance of line percent mark-up does not play a role in the award of ITB 9-250-040-B. The information only goes to the negotiation procedure which is separate from the award of ITB 9-250-040-B. Such optional information submitted for a separate procedure cannot be used to invalidate the award of a bid where that optional information plays no role in the bid evaluation process. As indicated earlier, with regard to regular items bid under Tables 2.1, 2.2 and 3.0, bidder's were to bid a percentage mark-up from dealers cost. Page 11 of the ITB under the hearing Format for Submission of the Bids stated that bidders had to supply manufacturer's published price lists as well as an authorized dealer's list. It also stated that the bidders should provide the documents in letter quality text as well as with a computer diskette. In response to the provision relating to the format in which the bids were to be received, a question was submitted to the Department on this issue. At page 10 of the question and answers under Question H-2 the following question appeared: "Are the price lists detailing the systems and individual items bid to be in the original manufacture's format or retyped by the bidder and submitted into Wordperfect format?" The Department answered this question in this manner: "Yes, manufacturer's suggested retail price (MSRP) list of manufacturer's costs list supplied by the manufacturer to each dealer/resaler must accompany the submitted document in hard copy. They are not required in Wordperfect disk format. However, the format for the bid/price sheets including product description and percentage mark-up or discounts should be submitted in Wordperfect format on diskette. The bid requirements as clarified in the question and answer required that the manufacturer's price list be submitted with the bid in "hard copy" but there was no similar requirement that the accompanying diskette be likewise, supplied in hard copy. Section 6.0 of the ITB provides that inclusion of unacceptable products would result in a bid being declared non-responsive. While operating system software was to be included in the bids, application software was not. Vanstar's bid contained certain items of application software which was included as part of the manufacturer's price lists included with its bids. Likewise, AmeriData's bid included items of application software, contrary to the terms of the ITB. The purpose of these lists was to identify the products being bid. Vanstar submitted an unsanitized hard copy of the dealer's price and the manufacturer's suggested retail price and also submitted in diskette format an additional list of items that had been sanitized to included only those items contained in the bid as well as additional information relating to items that were included in the balance of line. The evidence did not demonstrate that inclusion of non-bid items in the manufacturers price list created any confusion as to the items being bid or had any material impact on the bid process. Therefore, these discrepancies from the ITB do not invalidate an otherwise legitimate bid award. The evidence was clear that DMS intended the term "microcomputer," as used in the ITB to mean a "configured computer system" such that when purchasing peripherals as part of the purchase of a complete microcomputer system, the price for the configured system so purchased would be at the price the winning vendor bid for Table 2.1 microcomputers. Under DMS's interpretation a "microcomputer" would include the central processing unit (CPU), keyboard, disk drive, operating system, monitor and other peripherals purchased simultaneously with the computer. On the other hand at least two vendors, AmeriData and Vanstar, interpretated the term "microcomputer" to include the CPU with an operating system, storage device and an input device such as a keyboard but no monitor or other peripherals. The term "microcomputer" or "computer" does have a common meaning in the industry and refers to the CPU, input device, storage device and operating system in a self-contained box. Items which might be connected to the industry defined computer would be peripherals, such as, monitors, fax/modems, network cards, printers, sound cards, video boards, etc. The evidence demonstrated that there is some question whether the term "microcomputer system" or "computer system" has a commonly understood meaning in the industry. The lay persons definition of the term "computer" and "microcomputer" varies depending on whether "system" is equated with the term "computer." To further obfuscate terminology, none of the above terms reflect the current state of marketing of computer systems, including IBM products, as basic integrated or bundled systems with components that can be upgraded, downgraded or added to for certain adjustments in price. It is this confusion in terminology that DMS found itself dealing with when it drafted the ITB at issue in this case and which continued throughout this proceeding. The specifications in the first paragraph under Section 2.0, page 18, state under the heading REQUIREMENTS PROVISIONS, MICROCOMPUTERS -- DESK-TOP, DESK-SIDE, AND PORTABLE: Components (such as monitors, keyboards, mouse and trackball, expansion boards, network interface cards, internal modems, multimedia, and storage devices purchased with and integrated with the microcomputer system prior to delivery) will carry the same support level, requirements and provisions as the microcomputer system. Support level does not refer to the components' status as part of a microcomputer system, but only to a components' guarantee of service or maintenance. This section was not viewed as definitional by DMS. However, the concept is important, since potential purchasers were used to ordering configured, or bundled systems and desired the peripherals to carry the same level of service as the CPU. The questions and answers contained in the ITB seem to confuse matters further. In response to a question asking whether monitors would be required to be purchased from Table 5.1, DMS specifically stated that "(N)o, they can be included as part of the system configuration, part of "balance of line" for the awarded vendor, or can be included in Monitors Section 5.1. (Emphasis supplied) On the other hand, the answer to Question P2, submitted when balance of line was to be bid at a discount from MSRP, stated that full functioning systems are submitted on the bid sheets/price lists as cost-plus or percentage (mark-up) over manufacturer's cost, indicating that monitors, when bought as part of a full functioning system, were to be at the same price as the CPU. Throughout the bid process, vendors were encouraged to offer standard computer system configurations for the benefit of the potential purchasers. However, the ITB did not specify what had to be included in the configured systems and did not define configured system, bundled systems, microcomputer systems microcomputer, computer or computer system. The reason no precise definitions were developed in the ITB was that each manufacturer had different types of configured or bundled systems and it was up to each manufacturer to determine what was to be supplied with any particular system. Similarity and comparability between bids was achieved by requiring each vendor to bid by product line using the same manufacturer's product list and wholesale price. Both Vanstar and AmeriData understood the term "microcomputer" not to include a monitor or other peripheral devices. However, both vendors were bidding the IBM product line and did not include any special vendor bundled systems. The IBM price list literature included with their bids sets forth what was included in the particular microcomputer system configuration being offered. For instance, the IBM product line includes the IBM VALUEPOINT PERFORMANCE SERIES SYSTEM. The Valuepoint Performance System includes: One 3.5" 1.44 MB diskette drive standard, 4MB or 8MB parity memory standard, 1MB video RAM standard, external L2 "write Back" cache capability (standard external L2 cache on select models), SelectaBus ISA/VESA Local Bus or ISA/PCI Bus technology, VESA Local Bus SVGA video, Advanced power management on all systems Most SpaceSaver and Desktop systems meet EPA Energy Star requirements for power processors based on Pentium technology, three year warranty, choice of 270MB, 364MB, or 527MB hard files, multimedia standard on many desktop units, two serial ports (9-pin); one parallel port, enhanced keyboard and point device ports and IBM mouse. The IBM PC 300 Series includes similar items but also includes certain items of installed software. The IBM PC 700 Series includes audio capability. No monitors are included as part of these computer configurations. The IBM Thinkpad (laptop) series contains monitors as well as pre-installed software. Some configured systems include network cards. Some configured systems include CD-Rom drives. IBM's standard computer configurations are quite varied. Under Section 2.1 of the ITB, a purchaser could purchase a system that is fully configured by the manufacturer and that has devices that are needed in order to do multi-media. Some of the IBM systems include the bare minimum and some include items that would otherwise be considered extras. A person ordering computers off of the manufacturer's price list could order different size processors, various diskette hard drives, various optical storage devices and keyboard options, without regard to the balance of line as long as those options were part of the manufacturer's standard configuration. Items not included in those standard configurations such as monitors in the Valuepoint performance line, would not be part of this bid award because they would fall under balance of line items. In this case, there would normally be no problem since both bidder's bid the same product line with the same standard configurations. However, as indicated earlier DMS' intended definition of microcomputer goes beyond the specifications of this bid. DMS desires to include items under table 2.1 which are not part of IBM's standard configurations. For instance DMS believes monitors should be included as part of the Valuepoint performance series if a purchaser purchases the monitor simultaneously with the Valuepoint system. In fact, DMS and Vanstar have conducted some preliminary discussions as to what items outside and IBM standard configuration are included in its bid. DMS is in essence allowing and encouraging Vanstar to change its bid to include peripherals in its microcomputer bid after the bids were opened, albeit at the same percent mark-up from dealers cost as the microcomputers. Such after the fact changes are impermissible. Moreover, irrespective of the definitions of computer, DMS's interpretation of the bid specifications flies in the face of its stated purpose for not defining terms. DMS elected not to specifically define terms, because it wanted to rely on manufacturer's, such as IBM, to define what would be included in its computer configuration. In this case, IBM defined those configurations. If DMS had desired to include peripherals outside a manufacturers standard configuration as part of a configured system when purchased simultaneously with a computer then the specifications needed to cover such simultaneous purchases. Neither the specifications nor the evidence support DMS's interpretation of this bid. Clearly the term microcomputer, computer, computer system, etc. are very material terms in this ITB. The failure to clearly (not necessarily specifically) define that family of terms is fatal to this ITB since there was no mutual understanding between the parties on the IBM portion of the contract as to what was to be bid as a microcomputer. Therefore, all the bids should be rejected on the IBM portion of ITB 9-250-040-B.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a final order be entered rejecting all bids under the IBM portion of ITB 9-250-040-B. DONE and ENTERED this 11th day of August, 1995, at Tallahassee, Florida. DIANE CLEAVINGER 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 11th day of August, 1995.
The Issue The first issue to be determined is whether the BOARD can reject all bids, with or without cause. The second issue is to determine if the BOARD is required to have cause, was there a sufficient basis for the rejection of all bids in Bid NO. 3996?
Findings Of Fact On December 14, 1987, the BOARD sent invitations to bid to a list of approved vendors in Bid NO. 3996. The purpose of the invitation was to obtain the lowest responsible bid on a purchase of one hundred and fifty typewriters. The bids were to be submitted prior to January 11, 1988 at 2:00 P.M.. They were opened by the BOARD on the same day. OFFICE did not receive an invitation to bid despite its request to be placed on the approved vendor's list in November of 1987. When OFFICE learned of the outstanding invitation to bid, its representative, Mr. Richard Foss, went to the BOARD's Purchasing Department and requested a bid package. The bid documents given to OFFICE mistakenly gave January 14, 1988 at 2:00 P.M. as the deadline for the bid submission. Because of the later date given by the BOARD to OFFICE, the company's bid was received after the opening of the bids. When the results of the bidding were made known at the public bid opening, NAPLES bid was the lowest received. On January 14, 1988, after 10:42 A.M., it was discovered by the BOARD that OFFICE's bid price was lower than the price submitted by NAPLES. At this time, NAPLES bid had not yet been accepted by the BOARD, and no formal announcement had been made awarding the contract to NAPLES. During the BOARD's Purchasing Department's bid analysis, a request was made to reject all bids in Bid NO. 3996. The reason given by Purchasing for the request for rejection was that the specifications were being revised. The bids were rejected on the same date. The written reason sent to the vendors on January 14, 1988 for the bid rejection was that one vendor had been given an incorrect opening date. Attached to the written notice to the vendors was a new bid invitation for Bid NO. 4013. The BOARD explained its mistake was unfair to the one vendor. A new bid opening date was given of February 1, 1988. On January 14, 1988, in addition to the required bid documents, OFFICE submitted a letter which listed additional offerings or incentives that OFFICE would give the BOARD if OFFICE was awarded the contract. These additional purchasing incentives were: wall charts and teacher/student manuals for each typing classroom in the county. OFFICE also informed the BOARD that one of the BOARD's own service personnel was already trained in the servicing of Swintec typewriters. The bid submitted by OFFICE did not meet either the weight or the print wheel specifications as set forth in Bid NO. 3996. The specifications as written in Bid NO. 3996 were not written to eliminate all other typewriters but the Brothers 511-11. Weight specifications required were below the Brother's minimum weight, and at least two other manufacturers provide protected drop-in cassette print wheels in electronic typewriters. The Invitation to Bid contained specific provisions which encouraged the bidding of typewriters other than the Brother 511-11, and set up procedures under which other typewriters, which substantially meet the specifications, could be reviewed on their merits. NAPLES was the lowest responsible bidder for the electronic typewriter contract in the prior school year. The BOARD had rejected all bids at that time because of the decision to consider a different brand of typewriter once bids were opened. A notice of protest was filed by NAPLES, and the BOARD agreed to honor NAPLES bid and award the company the contract. The BOARD revised its bid specifications from last year prior to its solicitations for bids in Bid NO. 3996. The protected drop-in cassette print wheel and the weight requirements were two new technical specifications. During the hearing, the BOARD was unable to determine whether the weight factor or the protected drop-in cassette print wheel requirement will continue to be included in future revisions of the specifications.
Recommendation Based on the foregoing, it is RECOMMENDED: That the BOARD reject the bid submitted by OFFICE as it was nonconforming and sought an advantage not enjoyed by the other bidders. Reinstate the bids which were rejected in Bid NO. 3996, consider the bids, and make an award of the contract to NAPLES. DONE and ENTERED this 30th day of March, 1988, in Tallahassee, Florida. VERONICA D. DONNELLY Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of March, 1988. COPIES FURNISHED: Stephen Emens, President Naples Business Equipment and Systems, Inc. 859 4th Avenue South Naples, Florida 33940 Harry A. Blair, Esquire 2138-40 Hoople Street Ft. Myers, Florida 33901 Richard Foss, Typewriter Sales Manager 8A-Del Prado Boulevard Cape Coral, Florida 33904 Karl Engel, Superintendent Lee County Public Schools The School Board of Lee County 2055 Central Avenue Fort Myers, Florida 33901
Findings Of Fact The Department of Corrections (Corrections) initially published an Invitation to Bid (ITB) 90-Region-001 for the provision of a recyclable baling machine which had an opening date and time of 1:00 p.m., August 22, 1989. Upon opening and evaluation of the bids filed in response to ITB 90- Region-001, Corrections' purchasing and technical staff determined that the specifications for this initial ITB had been drafted too narrowly for them to validly and reasonably compare the bids submitted. This was Corrections' first attempt to meet certain recycling mandates and the agency personnel were initially unfamiliar with all of the machinery available in the marketplace. Lack of technical literature from some bidders was also a problem. In comparing the five bid responses received, it became apparent to Barbara Stephens, Corrections' Purchasing Director, that the specifications she had initially drafted worked against agency interests in that they were so narrow that different models could not be compared. In Ms. Stephens' words, one could not even compare "apples and apples," let alone "apples and oranges." The line item on Page 6 defied comparison and other line items presented significant comparison problems. After a review by Corrections' General Services Specialist Bob Sandall, it was determined that it was to the agency's advantage, as well as advantageous to the competitive bidding process, to rebid on more general specifications instead of specifications solely geared to one single model of one type of baler already owned by the agency, a McDonald single phase baler. For the foregoing reasons, Corrections elected to reject all bids received in response to ITB 90-Region-001 and rebid the item so as to broaden the eligibility base through new specifications, thereby ensuring that more than a single manufacturer could compete while making line item comparisons by the agency possible. Line item comparisons were considered advantageous to all potential bidders and to the agency and essential to a fair competitive bidding process. Considering purely bottom-line cost, Petitioner Solid Waste was the low bidder on initial ITB No. 90-Region-001 if its mathematical error were ignored and its bid were recorded as $23,960.00 instead of as $35,970.00. There were apparently some other problems with Solid Waste's bid response. These were not clearly addressed by any witness' testimony, but it is apparent that the requested manufacturer's specification sheet was included with Solid Waste's response to ITB 90-Region-001. Corrections did not reach any of the potential bid defects of Solid Waste because the agency elected to discard all the bids almost immediately. Rule 13A-1.002(9) F.A.C. provides that an agency shall reserve the right to reject any and all bids and shall so indicate in its invitation to bid. Corrections followed this requirement in General Condition 10 of ITB No. 90- Region-001, which provides in pertinent part, as follows: As the best interest of the State may require, the right is reserved to reject any and all bids . . Bob Sandall and Barbara Stephens redrafted the bid specifications for the recyclable baling machine more broadly, primarily to encourage greater competition of bidders. Corrections properly published these new specifications in ITB No. 90-Region-001 on or about September 18, 1989. Bids were to be opened on October 3, 1989. On October 3, 1989, the bids submitted in response to ITB No. 90- Region-001 were opened and checked for completeness. Upon opening the bid packet submitted by Petitioner Solid Waste, Corrections personnel discovered that the manufacturer's specification sheet which had been required in both initial ITB No. 90-Region-001 and in rebid ITB No. 90- Region-001R was missing. Based on the missing specification sheet, Petitioner's bid on ITB No. 90-Region- 001R was rejected as unresponsive. General Condition 7 in ITB 90-Region-001R provided in pertinent part: Bidder shall submit with his bid, cuts, sketches, and descriptive literature and/or complete specifications. Reference to literature submitted with a pervious bid will not satisfy this provision. The State of Florida reserves the right to determine acceptance of item(s) as an approved equivalent. Bids which do not comply with these requirements are subiect to reiection. (Emphasis supplied) Special Condition VI of ITB 90-Region-001R, "Submission of Mandatory Forms/Literature," further provided that: 5. Complete Technical Data on items other than as specified shall be provided with bid by the vendor, for evaluation purposes, otherwise bid will not be considered. Nowhere in ITB 90-Region-001R is there any suggestion that responses thereto are supplemental to those filed for ITB 90-Region-001 or that "carryovers" or "reactivations" of earlier ITB 90-Region-001 responses would be considered. Corrections rejected other bidders' responses for other acts of non- responsiveness, and it was not necessary to waive any condition in order to award the bid to any of the bidders who were in full compliance with ITB 90- Region-001R. Petitioner timely filed a formal written protest to Corrections' bid tabulation of ITB 90-Region-001R on October 23, 1989. In this protest, Petitioner also included its only and untimely challenge to the agency's rejection of all bids for ITB 90-Region-001.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Corrections enter a Final Order dismissing Petitioner's protest and ratifying its rejection of all bids for ITB 90-Region- O01R and its tabulation of bids for ITB 90-Region-001R. DONE AND ENTERED this 7th day of February, 1990, in Tallahassee, Florida. ELLA JANE P. 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 7th day of February, 1990. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 89-5854BID The following constitute specific rulings pursuant to Section 120.59(2) F.S. upon the parties' respective proposed findings of fact (PFOF): Petitioner's PFOF: 1. is accepted except for the ultimate conclusion of law. See Conclusions of Law. 2-3, 5-7 are rejected as mere legal argument or proposed conclusions of law. See Conclusions of Law. 4 is rejected as characterization of testimony. Respondent' s PFOF: 1-7 are accepted. COPIES FURNISHED: W. K. Lally, P.A. 6160 Arlington Expressway Jacksonville, Florida 32211 Perri M. King Assistant General Counsel Department of Corrections 1311 Winewood Boulevard Tallahassee, Florida 32399-2500 Courtesy copy to: Richard L. Dugger, Secretary Thomas W. Riggs, President Department of Corrections Municipal Sales and Leasing 1311 Winewood Boulevard Inc. Post Office Box 90306 Tallahassee, Florida 32399-2500 Lakeland, Florida, 33804 Louis A. Vargas, General Counsel Department of Corrections 1311 Winewood Boulevard Tallahassee, Florida 32399-2500
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: In January of 1994, FDOT issued an Invitation to Bid ("ITB") for contracts FE2494Z1 and FE2494Z2 to provide storm shutters for the FDOT facilities in Zones 1 and 2 of the Florida Turnpike. The ITB was entitled "Storm Shutters, Removable, Manufacture, Furnish and Install." Prospective bidders for the contracts were provided with a packet which included General Conditions, Special Conditions, Specifications and General Special Provisions. The General Conditions set forth the procedures for submitting and opening the bids. The Specifications called for custom-sized removable storm shutters and detailed the materials and installation procedures that were required. The bid package contained the following pertinent language in the Special Conditions, Section 1.0, entitled "Description", and in the Specifications, Section 1.0, entitled "Scope of Work": Work under this contract consists of providing all labor, materials, equipment, tools and incidentals necessary to manufacture, furnish and install galvanized steel storm panels and accessories for all of Zone 1 & Zone 2 buildings and locations as identified in the building listing listings document, see Exhibit "A" Zone 1 & Exhibit "A" Zone 2. The bid package contained the following pertinent language in Special Conditions Section 8.1, entitled "Required Documents": Bidders are required to complete and return the State of Florida "Invitation to Bid" form as well as the bid sheet(s). These forms must be signed by a representative who is authorized to contractually bind the bidder. All bid sheets and the "Invitation to Bid" form must be executed and submitted in a sealed envelope. At a mandatory pre-bid conference on February 17, 1994, the Department's representatives were available to answer questions regarding the bid package. During the pre-bid conference, John Vecchio of the Department orally advised the prospective bidders that they should return the whole bid package, including the specifications, when they submitted their bid. No written amendment to this effect was issued. The bids were opened on March 3, 1994 in Fort Lauderdale. Bids were received for each contract from at least three bidders, including Accurate and Hurst. The apparent low bidder for both contracts was Broward Hurricane Panel Co. ("Broward"). Prior to the bids being posted on March 28, 1994, Broward's bid was determined to be nonresponsive and Broward was therefore disqualified. After Broward was disqualified, Accurate was the apparent low qualified bidder for Zone 2 and Hurst was the apparent low qualified bidder for Zone 1. Hurst's bid for the contract for Zone 2 was $85,000. Its bid for the Contract for Zone 1 was $36,000. Accurate's bids for the contracts were $84,854.82 and $36,287.16, respectively. Hurst was awarded the contract for Zone 1 and that decision has not been challenged. At the same time the Department announced the award of the Contract for Zone 1 to Hurst, the Department announced its intent to award the contract for Zone 2 to Accurate. Hurst timely filed a notice of protest and a formal written protest of the proposed award of the contract for Zone 2 to Accurate. Initially, FDOT raised as a defense that Hurst had not posted a protest bond as required by Section 287.042(2)(c), Florida Statutes. At the hearing in this matter, FDOT conceded that Hurst had subsequently posted a protest bond which had been accepted by FDOT. Hurst contends that Accurate's bid should have been deemed nonresponsive because Accurate does not have the ability to "manufacture" the specified product in its own facility. The 2 inch corrugated shutter required by the ITB has to be shaped on a special type of machine that rolls, presses and forms the metal. Hurst owns and maintains at its Opa-Locka facility a rolling mill capable of forming the panels to the bid specifications. Accurate is in the business of supplying the types of products sought by the ITB in this case. However, Accurate does not own the kind of machine necessary to shape the metal. The evidence established that for many years, Accurate has had a continuing business relationship with a local subcontractor, Shutter Express, that rolls, presses and forms raw material supplied by Accurate in accordance with Accurate's specifications. Shutter Express has the capability of fabricating shutters with a 2 inch corrugation in accordance with the ITB. Accurate is equipped to attach the headers and sills, drill the necessary holes, complete the assembly and install the final product. The ITB in this case did not preclude subcontracting any or all of the work specified. While the description of the work in the ITB includes the term "manufacture", this reference should not be read to mean that only those companies that were able to fabricate the entire product at their own facility could properly respond to the ITB. There is no logical justification for such a narrow interpretation. Only a few companies have the ability to completely fabricate the shutters on their own property. At the prebid conference, there was discussion amongst the prospective bidders about subcontracting the fabrication work and the FDOT representatives did not raise any objections to such an arrangement. It was widely understood by the parties present at the pre-bid conference that the Department was not interpreting the ITB in the restrictive manner now urged by Hurst. Such a reading of the ITB would have precluded from the bidding process a number of companies such as Accurate that routinely supply and install shutters. Hurst also contends that the bid proposal submitted by Accurate should be deemed nonresponsive because Accurate failed to include the entire ITB with its proposal in accordance with the oral instructions at the pre-bid conference. Hurst's proposals included the entire ITB. As discussed below, Accurate's proposal did not include the entire ITB. FDOT determined that all essential pages were included in Accurate's response and the evidence did not establish that this conclusion was arbitrary, capricious or fraudulent. Paragraph 6 of the General Conditions of the ITB provided: ADDITIONAL TERMS AND CONDITIONS: No additional terms and conditions included with the bid response shall be evaluated or considered and any and all such additional terms and conditions shall have no force and affect and are inapplicable to the bid. As noted above, at the prebid conference held on February 17, 1994, an FDOT employee told all prospective bidders to return the entire bid package when making their submittals. This request that the entire bid package be returned was simply meant as a protection for the bidder to ensure that all the necessary documents referenced in Section 8.1 of the Specifications were submitted. Other than those documents referenced in Section 8.1 of the Specifications, FDOT had no interest in having the remaining portion of the ITB submitted with a proposal. Accurate's submittal contained every document required by Section 8.1 of the Specifications. Accurate's proposal did not contain pages 3 through 12, 14, 15 and 17 through 20 of the ITB, but did include pages 1 and 2, 13, 16, 21 and 22 along with a signed Form PUR 7068 and a signed acknowledgment of Addendum In other words, the submittal contained a signed and completed Bidder Acknowledgment, completed Bid Price Forms for Zones 1 and 2, a signed copy of Addendum #1, a completed copy of the Ordering Instructions, and a signed, but not notarized, statement regarding public entity crimes. 1/ In addition to the "REQUIRED DOCUMENTS," set forth in Section 8.1 of the Specifications and quoted in Findings of Fact 6 above, the ITB included Section 8.2, "PUBLIC ENTITY CRIMES STATEMENT" which provides: Any person submitting a bid or proposal in response to this invitation should execute the enclosed form PUR 7068, SWORN STATEMENT UNDER SECTION 287.133(A), FLORIDA STATUTES, ON PUBLIC ENTITY CRIMES, including proper check(s) provided, and submit it with the bid/proposal or within 72 hours of the bid opening. Page 7 of the ITB provided in pertinent part: 10.0 BID PREFERENCE IDENTICAL TIE BIDS - Preference shall be given to businesses with drug-free workplace programs. Whenever two or more bids which are equal with respect to price, quality and service are received by the State or by any political subdivision for the procurement of commodities or contractual services, a bid received from a business that certifies that it had implemented a drug-free workplace program shall be given preference in the award process. . . . Accurate's proposal did not include a certification that it was a drug-free workplace in accordance with this provision. However, such a certification is only used by the Department as a tie-breaker. In other words, in the event of identical bids, any firm with a drug-free workplace would get preference. Since there were no tied bids in this case, certification was totally irrelevant. When the bids were opened, Mary Bailey, the contracts administrator for the Department, noticed that Accurate's submittal was thinner than the others and asked Accurate's representative, Richard Johnson, about the remaining pages. Mr. Johnson replied that the other pages were in his truck and offered to retrieve them. Ms. Bailey told him there was no need to do so. Section 10 of the General Conditions in the bid package provides as follows: As the best interest of the State may require, the right is reserved...to reject any and all bids or waive any minor irregularity or technicality in bids received... It does not appear that Accurate has obtained any competitive advantage as a result of its failure to include the entire ITB with its bid proposals. Even if the oral instructions at the pre-bid conference are deemed to have modified the ITB so that the entire bid package should have been submitted, Accurate's failure to include the entire ITB with its response should be considered a minor technicality, pursuant to Section 10 of the General Conditions cited above, that can and should be waived in evaluating the responsiveness of the bid. Similarly, the failure to have the Form PUR 7068 notarized may have rendered Accurate's bid proposals incomplete, but not necessarily nonresponsive. This oversight can be easily corrected without giving Accurate a competitive advantage.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding the bid submitted by Accurate to be responsive and dismissing the challenge filed by Hurst. DONE and ENTERED this 24th day of June 1994, at Tallahassee, Florida. J. STEPHEN MENTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of June 1994.
The Issue : The issue to be resolved in this proceeding concerns whether the agency action in recommending award of the contract for a renovation of a National Guard Armory to Concrete Services, Inc. (CSI) was "clearly erroneous, contrary to competition, arbitrary or capricious." More specifically, it must be determined whether a specification requiring that all general and subcontractors visit the project site and examine the existing site conditions prior to bid submittal, and certifying to that fact, was a waivable or minor irregularity, not affecting the price of the proposal by giving an unfair competitive advantage to any bidder or proposed vendor.
Findings Of Fact The Department of Military Affairs (Department) issued an invitation to bid for certain renovation work at the National Guard Armory in Tallahassee. The invitation to bid was issued on March 2, 2008. It was accompanied by an advertisement number 207005 and addenda No. 1-3. These were the documents that defined the scope of the work proposed to be constructed by the Department and the various specifications, conditions, and criteria which were to guide and be relied upon by prospective vendors or bidders. The invitation to bid stated that the contract would be awarded to the lowest responsive and responsible bidder. The invitation to bid notified prospective bidders that the Department reserved the right to waive minor irregularities in a bid where they did not affect the price of the proposal. Thus, the Department stated in the Invitation to Bid "the Department reserves the right to accept or reject any or all proposals received and reserves the right to make an award with or without further discussion of the proposals submitted or accept minor informalities or irregularities in the best interest of the State of Florida, which are considered a matter of form and not substance and the correction or waiver of which is not prejudicial to other proposals." The reasons stated in the Invitation to Bid and Addenda for disqualification of a bidder did not include the failure of the contractor or subcontractors to visit the project site. Rather, the invitation to bid and advertisement list placed on the discriminatory business list, the submission of an electronic bid and employment of unauthorized aliens as irregularities that would result in disqualification of a bidder. The invitation to bid defines minor irregularities as "those that will not have an adverse effect on the DMA's interest and will not affect the price of the proposal by giving a proposer an advantage or benefit not enjoyed by all other proposers." The Department thus did not make failure of a contractor or subcontractor to visit the site of the project an event that would result in disqualification. The Department's intent rather was to place contractors on notice that failure to visit the site would be at the sole risk of the general contractor/bidder if failure to visit the site resulted in an unforeseen problem, cost, or risk. The Department stated at Addendum 1, D-9 the following: D-9 site examination by contractor: The general contractor and all subcontractors as listed on Exhibit Five, shall visit the project site and examine the existing conditions affected by this work prior to submitting a bid. Any bid submitted without prior examination of on-site existing conditions will be at the sole risk of the general contractor. The contractor shall submit on its letterhead the following at time of bid, certifying that he and his subs thoroughly examined the project site: 'I (name of general contractor), do hereby certify that all associated general and subcontractor entities have visited the project site and thoroughly examined the on- site existing conditions prior to the submittal of the bid.' Lt. Col. Keating is the contract officer and manager. His duties include reviewing the bids and making final determination on bid proposals submitted to the Department for projects such as this renovation project. He reviewed the entire package of bid submissions after the bid opening in Tallahassee. These are his duties concerning every bid opening of the Department. Lt. Col. Keating reviewed the failure of CSI to submit the Addendum D-9 letter and determined that the absence of the letter did not give CSI an unfair competitive advantage. He determined that this was a minor irregularity which was waivable. Mr. Hersey was the construction consultant for the Department for this project. Mr. Hersey reviewed the CSI file after the bids were submitted, noting that CSI's bid did not include all the verbiage required by Addendum One, D-9. He determined, however, that the proposed included the "Exhibit 4" document which stated that CSI had "visited the site of the proposed project and familiarized himself with the local conditions, nature, and extent of the work." Mr. Hersey brought this omission to Lt. Col. Keating's attention. Lt. Col. Keating considered the failure of CSI to submit the Addendum 1, D-9 letter language and determined that the omission did not give CSI an unfair competitive advantage over other bidders and therefore that it was a minor irregularity. He determined that the fact that there was language in the bid submittal of CSI to the effect that the contractor had visited the site and familiarized himself with conditions, nature, and scope of the work made the bid actually responsive. The failure to include the language required in Addendum 1, D-9 did not render the bid unqualified or non- responsive, but, instead, the failure to include that language would have the consequence of making CSI responsible for any loss caused by the failure to visit the project site or have the subcontractors visit the project site before bidding. If that omission caused any additional cost or unforeseen circumstances which had a cost attributable to them, CSI would have to bear the risk of paying for any such expense itself under the terms of the specifications. It was thus determined that the failure to visit the site had the consequence of making the contractor assume resulting risks but was considered by the Department to be a quality assurance measure in the specifications, instead of a determining or qualifying factor for award of the project. Lt. Col. Keating determined that the failure to submit the required language in the letter did not give CSI an unfair competitive advantage. CSI's bid was $1,866,212.00. The bid of the Petitioner, Warren Building Company, Inc., was $1,944,000.00. Thus, CSI's bid was $77,788.00 lower than the bid submitted by the Petitioner Warren. In preparing his bid submittal, the Petitioner had not been charged by his subcontractors for their visiting the Tallahassee project site. His entire cost of submitting the response to the invitation to bid on behalf of Warren, was $10,000.00 or less. Thus, the failure by CSI to have subcontractors visit the site and evaluate the work was clearly not shown to have saved CSI costs, in an amount anywhere approaching the total difference in the amounts of the two bids. Only if the avoidance of such costs represented by the visits of the contractor and subcontractors to the job site was greater than or at least approximately equal to the $77,788.00 difference between the two bids, would the failure of CSI to entirely comply with this specification result in a change in the relative competitive positions of the two bidders. Put another way, there was no evidence to show that had CSI completely complied with the disputed specification, that it would not still have much the lowest-priced responsible and responsive bid. It was thus determined by Lt. Col. Keating that the $1,866,212.00 bid submitted by CSI was the lowest responsible and responsive bid. He therefore determined that the award of the contract should be give to CSI and an Agency decision to that effect was posted on April 11, 2008. The subject protest and proceeding ensued.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a final order be entered by the Department of Military Affairs, awarding the contract for renovation work at the National Guard Armory in Tallahassee, Florida (No. 207005) to Concrete Services, Incorporated. DONE AND ENTERED this 20th day of August, 2008, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of August, 2008. COPIES FURNISHED: Thayer M. Marts, Esquire 1105 Hays Street Post Office Box 1814 Tallahassee, Florida 32302 Kim F. Heller, II, Esquire Elizabeth C. Masters, Esquire Florida National Guard Post Office Box 1008 St. Augustine, Florida 32085-1008 Elizabeth C. Masters, Lt. Colonel Florida Army National Guard 82 Marine Street St. Augustine, Florida 32084
The Issue Whether the Department of Health and Services acted fraudulently, arbitrarily, capriciously, illegally or dishonestly in issuing an award of bid or HRS Lease No. 590:2069 to Harpaul S. Ohri.
Findings Of Fact Sometime before March, 1989, the Department of Health and Rehabilitative Services (HRS) requested and received approval from the Department of General Services (DGS) for additional office space to provide social services in the western portion of Orlando, Orange County, Florida, including a food stamp distribution office. HRS was authorized to procure, through competitive bidding, a lease for 17,250 net rentable square feet of existing office space, plus or minus 3 percent. The said lease was to provide for a full service period of seven years and two options to renew for three years each at specified rates, with occupancy no later than December 1, 1989 or 175 days after the bid award is finalized. The geographic area designated in the bid package for the office space was limited to the following area of Orange County, Florida: Beginning at the intersection of Colonial Drive and Kirkman Road to the intersection of L.B. McLeod Road, then east on L.B. McLeod Road to the, intersection of Rio Grande Avenue then north on Rio Grande Avenue to the, intersection of Colombia Street,, then east on Colombia Street to Interstate 4, then north on Interstate 4 to the intersection of Colonial Drive, then west on Colonial Drive to the point of Beginning. Public notice that HRS was seeking competitive bids was given and HRS prepared a document entitled Invitation to Bid for Existing Office Space (ITB), which set forth in detail all of HRS requirements. The purpose of the ITB was to inform all potential bidders of the minimum requirements for submitting a responsive bid, and the specific criteria by which the bids would be evaluated. Specific areas of importance to Respondent as reflected in the ITB and addressed by the evidence herein were as follows: 17,250 net rentable square feet (plus or minus 3 percent) of existing office space. General office use for use, as a client service center. Seven year term with two options to renew of three years each. 120 off-street, on-site, full size parking spots designated exclusively for use of Department employees and clients, suitably paved and lined, with a minimum of two for the handicapped. Availability of public transportation within reasonable proximity. Availability to adequate dining facilities within two miles. Photographs of the exterior front of the facility, along with documentation of present facility configuration and parking areas including access and egress to public roadways. Availability of elevator for multi-story use. i). Space requirement criteria: Minimum telephone requirements. Back-up interior emergency lighting. Three separate sets of rest rooms, male and female, one meeting the needs of the handicapped General security requirements. Specific security requirements for food stamp distribution center. Window covering over exterior widows to allow both sunlight and energy control; if bidded space without existing windows, then all rooms comprising the exterior of the building would require windows measuring approximately 24 x 36, all secured and inoperable. Full Service including all utilities and janitorial. The evaluation factors and their relative weights were stated in the ITB as follows: Evaluation Criteria The successful bid will be that one determined to be the lowest and best. All bids will be evaluated on the award factors enumerated below: Associated Fiscal Costs Rental rates for basic term of lease Evaluated using present value methodology by application of the present value discount rate of 8.69 percent. (Weighting: 25) Rental rates for optional renewal of terms of lease. Rates proposed are within projected budgeting restraints of the department. (Weighting: 10) Associated moving costs, i.e., furniture, equipment, telephone systems, etc,. (Weighting: 5) Location Proximity of offered space in central or preferred area of map boundaries. (Weighting: 10) Frequency and availability of satisfactory public transportation within proximity of the offered space. (Weighting: 10) The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on the efficient and economical conduct of the departmental operations planned for the requested space. (Weighting: 10) Facility Susceptibility of design of the space offered to efficient layout and good utilization. (Weighting 15) Provision of the aggregate square footage in a single building. Proposals will be con- sidered, but fewer points given, which offer the aggregate square footage in not more than two locations provided the facilities are immediately adjacent to or within 100 yards of each other. (Weighting: 10) TOTAL POSSIBLE 100 percent The bid package contained various bid specifications, bid evaluation criteria and the numerical weight assigned to each of those criteria. Sealed bids were submitted by three bidders, Petitioner, Harpaul S. Ohri and Kensington Gardens Builders Corp. The bids were opened on April 25, 1989, and Ernie Wilson, HRS District 7 Facilities Services Manager, determined that all three bids were responsive, and within the mandatory geographical area designated in the bid package. The District Administrator appointed a bid evaluation committee to review and grade, the responsive bids under the criteria established in the bid package, and to recommend to him the committees choice of the lowest and best bid. Four individuals who were familiar with the type of work to be done in the proposed space and familiar with the bid process were appointed to the Committee. On or about May 1, 1990 the bid evaluation committee determined that the bid of Harpaul S. Ohri was the "lowest and best bid" and submitted its determination, in writing, to the District Administrator who, subsequently approved the selection. On or about June 26, 1989, on behalf of the Department, Ernie Wilson, Facilities Services Manager, notified the bidders of the Departments intent to award the bid to Harpaul S. Ohri, as being in the best interest of the Department. The bid evaluation committee consisted of four representatives of the Department who visited two of the three bidders sites and questioned the bidders representatives. The members of the committee were familiar with the Petitioners site from previous experience. They choose not to make an on-site visit prior to completing the bid evaluation sheet, although instructed to do so on the Evaluation Committee Duties and Responsibilities/Real Property, Leasing instruction sheet. Each committee member completed an evaluation sheet and gave a higher total score to Mr. Ohri. The three major bid evaluation criteria were Fiscal Cost, Location and Facility. Under the Fiscal Cost criterion were three sub-categories: Rental Rates, Renewal Rates, and Moving Costs. For Rental Rates, Petitioner received an average of 22.7 points out of 30 possible,, while Ohri received 21.7, and Kensington Gardens received 23.7 points. The points were individually assessed by the evaluation committee, after the rental rates were compared by Ernie Wilson based on the present value analysis of bidders proposed rates. For Renewal Rates, each of the bidders, including Petitioner, received 5 points out of 10 possible. The present value analysis was not applied, as was noted in the ITB. However, even a cursory examination of the renewal rates submitted by the bidders shows that there is a 15 percent to 33 percent yearly differential in the rates, with the Petitioners rates as the lowest and Kensington Gardens as the highest. Although the committee assigned all three bidders an equal rating, the renewal rates submitted by the bidders were not equal should the Department wish to exercise its options, the rates submitted by Petitioner were substantially lower than the other two bidders and would result in a cost savings to the Department of several hundred thousand of dollars. The award factor points should not have been awarded equally. For Moving Costs, Petitioner received 5 points on each of the committee members sheets, while Ohri received 4 points and Kensington Gardens received, an average of 3.7 points. The maximum points possible was 5 points. Petitioner was awarded the maximum points because HRS is presently in the same building and no moving costs would be experienced. The other two bidders were awarded 4 points each by committee members. That determination was based on each members personal experiences. No cost or time lost data was provided or requested. The LOCATION criterion also had three sub-categories: Proximity to other governmental agencies - 10 points - with all three bidders receiving the same rating; Public Transportation -10 points - with all three ,bidders, receiving the same rating; and Environmental Factors - 10 points - out of which Petitioner received an average of 5.7 points; Ohri - 9.7 points and Kensington Gardens - 6.5 points. In considering the proximity to other governmental agencies of each of the facilities being considered, the committee relied on their own knowledge of the area. They determined that since each was within the geographical area designated in the ITB, each was equally distant from the most frequently visited government agencies in the vicinity. However, Petitioners facility is the most centrally located of the three facilities offered, while the two other facilities were considerably distant from other government agencies. The award factor points should not have been awarded equally. For Public Transportation, the committee determined that local bus service went near each of the three facilities. They were neither provided, nor did they request, route maps, schedules or passenger capacity for buses servicing each facility. Petitioners facility is centralized in the area served within the bid district, and serviced by, numerous bus lines which pass near the facility ten times per hour. The bus service to the other two facilities are limited to four buses per hour, with buses having a smaller capacity. In addition, most clients would be required to travel to the central bus terminal and transfer to a different route in order, to reach the Ohri or Kensington Gardens facilities, making bus transportation a very time-consuming process. No other form of transportation is available, except for taxi service. In addition, in order for a client to walk from the nearest bus stop to the Ohri facility, a person would cross two heavily traveled six lane streets and then walk across an open shopping center parking lot. This would require approximately a fifteen minute walk. In order to reach Petitioners facility, a client would require approximately a five minute walk utilizing public sidewalks. The committee did not consider these facts in its evaluation. The award factor points should not have been awarded equally. (c)(1). For Environmental Factors, the committee considered each buildings physical characteristics and the surrounding area. The committee, in their letter to the District Administrator, dated May 1, 1989, identified this category as "a very critical area for the new lease." The letter also stated: "The committee took the following into account when evaluating this section: Cleanliness of the building aid surrounding areas. Lack of traffic congestion by motorized vehicles close to the facility. Easiness of getting to and from the facility by vehicle. Safety for clients and staff walking to and from the facility. Upkeep of the surrounding buildings or other sections of the bidders building." The following was also taken into account when evaluating this section, but was not so stated in the letter. At least one committee member believed the lack of window space in Petitioners facility was disabling to his bid, and that the willingness of the Ohri representative to install windows on exterior walls was a significant factor in her determination of award. At least one committee member indicated that future expansion was a substantial factor in her favoring the Ohri bid, and that there was janitorial and security problems at Petitioners facility. The committee received no other information other than the committee members opinion regarding the same. The committee as a whole erroneously believed that the extra square footage visible at the Ohri facility at the time of their inspection would necessarily be available to HRS if and when it might expand its offices. Future expansion was specifically removed from the ITB at the pre-bid conference and it was clearly erroneous for them to have included this factor in their bid evaluation. The ITB specifically calls for the installation of exterior windows by the winning bid prior to occupancy. However, none of the committee members reviewed the ITB or the actual bids submitted. They relied primarily on the synopsis of the bids prepared by Ernie Wilson. The ITB states substantial general and specific security requirements in detail; however, the evaluation criteria forms do not provide a category for evaluating security other than generally under the sub-category of environmental factors. The ITB, under General Specifications and Requirements, called for the availability of adequate dining facilities within two miles of the proposed facility. The evaluation criteria did not provide a category for the committee to rate dining facility availability. In consideration of the environmental factors, the committee overlooked or failed to consider a hazardous unfenced high voltage transmission station adjacent to the Ohri facility. In addition, the photographs submitted by Ohri as the front of the building (as required by the ITB) are in fact the rear of the building which was not offered as part of the proposed leased facility. Of the three sub-categories under FACILITY, out of 15 possible points, Petitioner received an average rating of 9.5, Ohri received an average of 13.7 and Kensington Gardens received 11.2 for Layout/Utilization. Ohri received the most points because his building configuration was a, shell and was more flexible and could be reconfigured for more efficient layout to suit the Departments needs. All three bidders submitted proposals wherein the total square footage of rentable space was to be contained in a Single Building. Therefore, all three bidders received the maximum 10 points. A maximum 5 points was provided for facilities with Street-level space. All three bidders were awarded the maximum 5 points. However, a portion of Petitioners space was offered on the second floor, a fact which the committee overlooked. The Petitioner should not have received the full 5 points for having street-level space. The unanimous recommendation of the evaluation was to award the lease to Ohri. In reaching that conclusion, the committee did not properly utilize the weighted bid criteria and, in addition, included improper bid considerations in their evaluation of the three facilities. Some of the reasons given by the committee for distinguishing and preferring one bid over another were rational and reasonable considerations and were covered by the bid evaluation criteria. However, others were erroneous and improper.
Recommendation Based on the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that the Secretary of the Department of Health and Rehabilitative Services enter a Final Order rejecting all bids for lease number 590:2069 and issue a new invitation to bid. DONE AND ENTERED this 12th day of February, 1990, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of February, 1990. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Proposed Findings of Fact submitted by the Petitioner: Accepted: paragraphs 1, 2, 3, 5, 6, 7, 9 (in substance, except for subparagraphs f, g, j and k which are not relevant), 10 (in substance), 12(a), (b), (f-in substance), (g-in substance), (h-in substance), (j), (k-in substance), (l-in substance), (p-in substance). Rejected: Not relevant: paragraphs 4, 12(c), (d), (e), (m), (n), (o), (p- the proposed future location of the Greyhound Station; insure wooded area nearby), (q), (r). Argument: paragraphs 11 and 13. Procedural matters, covered in the preliminary statement: paragraphs 8 and 14. Respondent did not submit proposed findings of fact. COPIES FURNISHED: Terrence W. Ackert, Esquire 201 East Pine Street Suite 1402 Orlando, Florida James Sawyer, Jr., Esquire District 7 Legal Counsel Department of Health and Rehabilitative Services 400 West Robinson Street Orlando, Florida Sam Power Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John Miller General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
The Issue The issues presented in this proceeding are whether Petitioner submitted the lowest and best bid on CTB 5998 and whether Petitioner is entitled to the bid award.
Findings Of Fact On November 5, 1990, Florida A & M University, acting as the agent of the Board of Regents, issued a Call to Bid (CTB) for the repainting and renovation of Bragg Stadium (repainting project). The total project was estimated to cost $595,000.00. The funds for the project would come from the Public Education Capital Outlay and Debt Service Trust Fund appropriated by the legislature and passed into law in the State's budget. 1/ Specifically, the funds for the repainting project were appropriated by the legislature as a specific line item in the 1990-1991 budget. The line in the budget read, "Fire Code Corrections/Repainting-Bragg Stadium (includes $490,000.00 Reimb. to Aux. Fund), of $682,000.00." The $682,000.00 figure was obtained from several documents submitted by FAMU to the Board of Regents. The Board of Regents then submitted the University's budget requests to the Commissioner of Education who, in turn, submitted an integrated budget to the governor and legislature. See Chapter 216 and 235, Florida Statutes, for the specifics of this budgetary process. The beginning of the budgetary process in relation to the repainting project occurred on October 16, 1989, when Louis A. Murray, the Associate Vice President of Florida A&M sent a document titled "the University's 1990-91/1992- 93 Capital Improvement Fee Project List for Legislative Consideration" to Dr. Carl Blackwell, the Vice Chancellor for Budgets. The document contained two attachments entitled "Capital Improvement Fee Project List, Project Information Sheet" (Project Information Sheet) for the fire code corrections at Bragg Stadium and the repainting of Bragg Stadium. It also included a Project Information Sheet for the remodeling of the Commons Building. The Project Information sheet dealing with the repainting and renovation of Bragg Stadium contained the amount of funding being requested by FAMU for the repainting project and a breakdown of the project's estimated costs. The project cost detail for the repainting of Bragg Stadium states: Construction $495,000.00 (Assumes bid date of 1991) Professional Fees . . . . 43,000.00 Resident Supervision . . . (No entry) Equipment . . . . . 30,000.00 Contingency . . . . . 27,000.00 Total Project Cost: $595,000.00 Importantly, the Project Information Sheet for the repainting of Bragg Stadium contains the basis utilized by FAMU to arrive at the repainting project's estimate. FAMU represented in the Project Information Sheet as follows: The basis for the estimate is the bid experience of a prior advertisement of the project by our own Plant Operations Maintenance Office, which came in at over $400,000. 2/ This estimate was again verified in a letter, dated October 25, 1989, from Dr. Murray to Dr. Blackwell. The letter states, in part, as follows: . . . . Since the opportunity for completing this project is between football seasons, the University wishes to advance dollar requirements from its Auxiliary Trust Fund with expected reimbursement from Capital Improvement Trust Fund after Legislative approval on July 1, 1990. This action will permit us to proceed with the Bid process and construction contract through completion before the 1990 football season. The scope of this project is summarized as follows: This project includes sandblasting, repainting and structural repairs for Bragg Stadium. Sandblasting and repainting is estimated at $415,000, while structural repair, primarily isolated rust spots, will cost approximately $75,000. . . . . The total estimate in Dr. Murray's October 25, 1990, letter was $490,000.00. It was this letter which prompted the parenthetical language in the line item of the General appropriations act for 1990-1991, passed by the legislature and enacted it to law. The Project Information Sheet for the fire code corrections to Bragg Stadium (fire code project) contained a project cost detail as follows: Construction $70,000.00 Professional . . . . . 7,000.00 Resident Supervision . . . (No entry) Equipment . . . . . (No entry) Contingency . . . . . 10,000.00 Total Project Cost: $87,000.00 The contract for the fire code corrections was let for bid prior to the repainting project. The amount of the contract for the fire code project was approximately $107,000.00. This contract amount exceeded the amount of the construction portion of the Project Cost Detail of $70,000.00 shown in the Project Information Sheet for the fire code project. Dr. Murray testified that this action was acceptable because it was within the discretion of Florida A&M to use the $682,000.00 appropriation to perform the fire code project in any amount it deemed appropriate, without regard to the break-outs shown in the Project Information Sheets. However, even assuming the correctness of Dr. Murray's position and deducting the amount of the fire code project's contract and the architectural fees of $7,000.00 listed in the Project Information Sheet, $568,000.00 of the original budgeted amount of $682,000.00 would remain for use on the repainting project. Florida A&M University, also prepared a document titled, "Summary of Capital Improvement Fee Projects for 1990-91/1992-93." The document is a summary of Florida A&M's budget requests for those years. This document also lists the fire code project and the repainting project along with the requested funding for those projects for the years 1990 through 1991. The funds requested for the projects are broken into three categories; Planning, Construction and Equipment. The entries for the repainting project show that the amount of $522,000.00 is for "Construction". The $522,000.00 figure was obtained by taking the $495,000.00 figure for construction contained within the Project Information Sheet for the repainting project, and adding the amount of the contingency cost ($27,000.00) for the project which was also shown on the Project Information Sheet. The combined total for the two projects was $682,000.00, the exact amount appropriated by the legislature for the two projects. Once the legislature had appropriated the money, FAMU, on November 5, 1990, requested that A Capital Outlay Implementation Plan be established with the Capital Outlay Trust Fund. The establishment of such a Plan is similar to creating a special account within the trust fund from which the University can draw. On November 26, 1990, the Plan was established for both projects in the amount of $682,000.00, as had been appropriated by the legislature. 3/ The Capital Outlay Implementation Plan contained a section titled, "estimated budget". The estimated budget contained estimates for the various phases of both projects as follows: Construction. $565,000 Professional Fees. 50,000 Furnishings and Equipment. 30,000 Contingencies. 37,000 .................................$682,000 Significantly, these documents were the only pre-established construction budgets developed by FAMU prior to the opening of the bids in this case. 4/ The specific pre-established construction budget for the repainting project was $522,000.00. Later, after the filing of the bid protest, FAMU would attempt to render a strained interpretation of the phrase "pre-established construction budget" contained in the bid specifications and engage in some inappropriate accounting in order to create several lower budget estimates. The Bid Package for CTB 5998 provided in the "Instructions to Bidders", Item D-21, Rejection of Bids, as follows: The owner reserves the right to reject any and all bids when in the opinion of the owner such rejection is in the best interest of the owner. The Bid Package further provided in the "Instructions to Bidders" at B-23, Contract Award, page 16 of 106, in relevant part: The contract will be awarded by the Florida Board of Regents for projects $500,000 or more, and by the President of the University, on behalf of the Florida Board of Regents, for projects of less than $500,000.00, to the lowest qualified and responsible bidder provided the bid is reasonable and it is in the best interest of the owner to accept it. . . . The contract award will be made to the responsible bidder submitting the lowest responsible aggregate bid within the pre-established construction budget. The aggregate bid shall consist of the base bid plus accepted active alternate bids, or less accepted deductive alternate bids, applied in the numerical order in which they are listed on the bid form. If the base bid exceeds the amount of the pre-established construction budget, the owner may reject all bids. (Emphasis added) A mandatory pre-bid conference was held on December 6, 1990, and was attended by seventeen contractors, including Petitioner. By the terms of the bid package, the bid opening date was set for December 18, 1990. However, by addendum, the bid opening date was extended to December 21, 1990. Seven bids were submitted in response to the original solicitation. 5/ The bids were opened at 10:00 a.m. on December 21, 1990, at the conference center of Florida A&M University. The bids were opened by Chuks Onwunli on behalf of Florida A&M, and tabulated by William Sabella, a representative of the architectural firm , Barnett, Fronczak Architects, the consulting architects for the repainting project. The opening and tabulation of all the bids was recorded on a document titled "Bid Tabulation". The result of the opening was that Phoenix Coating was the low bidder with a bid of $419,000.00. Feimster-Peterson, Inc., was the second lowest bidder with a bid of $474,320.00, and Monoko, Inc., was the third low bidder with a bid of 487,462.00. The four other bidders listed on the bid tabulation sheet were all over the amount of $490,000.00. 6/ As can be seen from the numbers, the top three bids were well within the pre-established construction budget for the repainting project. On December 21, 1990, Feimster-Peterson sent a Notice of Protest by telecopy and overnight delivery for delivery on Monday, December 24th. The basis of the protest was that the low bidder, Phoenix Coating, was not responsive because it had not attended the mandatory pre-bid conference and had not complied with the minority participation requirements of the specifications. On December 28, 1990, Feimster-Peterson sent its formal protest to Forrest Kelly, the Director of Capital Programs at the Florida Board of Regents by telecopy and by overnight delivery with delivery on December 31, 1990. The formal protest was filed in a timely manner. On or about January 14, 1991, Oscar Martinez, the Purchasing Director for Florida A&M issued a letter regarding Bid No. 5927 for the repainting and renovation of Bragg Stadium. 7/ The letter rejected all seven bids. Phoenix Coating's bid was found to be nonresponsive because it did not meet the 15% minority participation requirements of Bid 5998 and because the company had not attended the December 6, 1990, mandatory pre-bid meeting. Because Phoenix Coating's bid was non-responsive, Petitioner became the lowest responsive bid on CTB 5998. The letter further advised that the other six bids, including Petitioner's bid, were rejected because all six bids allegedly exceeded the pre- existing construction budget estimate for the project. The letter did not contain any language affording Petitioner a clear point of entry as required by Section 120.53, Florida Statutes. The letter did indicate that the University would modify the scope of work. Attached to the same letter was a new invitation to bid. Clearly, at this point in time, FAMU knew or should have known that there was a bid protest filed with it which was unresolved and which required a formal administrative hearing. However, during this time instead of following its statutory duties under Chapter 120, Florida Statutes, FAMU, at its peril, chose to re-let the project for bids. The new bid opening was set for February 28, 1991, and a new mandatory pre-bid meeting was also set for February 28, 1991. The bid deadline was extended to March 21, 1991. The scope of the work was not significantly altered in the re-bid. 8/ On or about January 16, 1991, counsel for Feimster-Peterson sent a letter to the Florida Board of Regents. The letter was prompted by Robert Petersen's, president and stockholder of Petitioner, belief that something was not right about the monetary and funding claims that FAMU was putting forth as its basis for rejecting all the bids. In essence, the numbers Mr. Petersen was aware of, which did not include any of the Project Information Sheet figures referenced above, did not make any sense to him. The letter stated, in part, as follows: Re-bidding the Project is unfair to all bidders now that the results of the first bid have been made public. Each bidder now has a target . . . to shoot at which will override the customary free market environment. Rewriting the Specifications will not eliminate this effect. Be advised that Feimster-Peterson requests the opportunity to either see the estimates or negotiate with the Board to reach a mutually acceptable scope of work. I request that you delay re-bidding until this option can be explored. (Emphasis added). On January 23, 1991, counsel for Feimster-Peterson again wrote to the Office of General Counsel at Florida A&M University and stated in relevant part: This letter is to reiterate our concern for the actions taken by the Florida A&M Purchasing Department and regarding the painting contract for Bragg Stadium. We filed bid protest for the Florida Board of Regents filed on December 28, 1990 pursuant to paragraph B-22 of the bid documents. Neither the Florida Board of Regents or the administration of Florida A&M has acted upon our bid protest. The bid protest remains unresolved and we intend to pursue the administrative remedies provided to us through the bid protest procedure. Moreover, it is our position that the decisions taken by the Florida A&M Purchasing Department subsequent to our filing may be included and adjudicated within the administrative procedures of the original bid protest . . . Mr. Martinez apparently takes the position that a new bid protest filing is necessary to formally dispute his decision [about the University's available budget]. As indicated, we disagree and intend to dispute this action within the existing, unresolved bid protest . . . By indicating the precise amount of the budget, Mr. Martinez has eliminated the basic purpose of competitive bidding, which is to achieve the lowest responsive price. All bidders now have a target price, and a minor modification of the specifications will not eliminate this effect. This serves neither Florida A&M's interest nor the interest of the original responsive bidders. Feimster-Peterson has requested that negotiations be commenced so that a mutually beneficial contract price be determined and the contract work commenced. To date, Mr. Martinez has refused to enter such negotiations and have given several oral, unsatisfactory reasons for this position. The Purchasing Department's refusal to negotiate with Feimster-Peterson, the lowest responsible bidder, should be clearly articulated in writing and sent to us. Feimster-Peterson believes such negotiations may prove successful, and work could commence without further delay or expense to Florida A&M . . . . (Emphasis added). Feimster-Peterson intends to pursue its rights under the bid protest originally filed on December 28, 1990. As low responsive bidder, Feimster-Peterson is entitled to an award of the contract . . This letter was sent by both telecopy and Federal Express to Mr. Holifield at the Office of the General Counsel and added the additional issues of whether FAMU's action in regard to this bid constituted bid shopping and whether Petitioner's bid, in fact, exceeded the estimated construction budget for Bid 5998. 9/ Significantly, the Martinez letter did not mention that Respondent was rejecting Petitioner's bid because the University believed that it could increase the number of contractors participating in a re-bid and could achieve a lower price by re-bidding the project. This issue was raised for the first time at the hearing. In that regard, the evidence clearly indicates that Respondent was attempting to shop its bid in order to obtain a lower price by re-bidding the project. Bid shopping is a process by which the general contractor or, as in this case, the owner of a project attempts to play off one bidder against another bidder in order to obtain a lower price. Bid shopping is done either by establishing a target figure which is represented to bidders to be a number which must be beaten in order to obtain the contract; or by the bid shopper relaying the amount of a competitor's bid to a bidder or group of bidders in order to encourage the bidder or group of bidders to lower its bid to below that of the competitor in order to secure the contract. A basic assumption in bid shopping is that the scope of the work is not significantly altered in order to lower the cost of the project. Bid shopping is considered to be unethical in a public competitive bidding situation and has been disapproved of by the Florida courts. In this case, Respondent established a target price in its letter of January 14, 1991, by communicating the amount of the alleged overage, enabling a bidder to calculate the budget figures to shoot for and, at the same time, keeping the scope of the work substantially the same in the re-bid. Additionally, the amount of the bids, as well as details involving those bids became public once the bids were opened, converting the possibility of unfair advantage accruing to potential bidders on the re-bid to a probability of such unfair advantage in this instance. 10/ Such a reason for rejecting the bids in this case strikes at the very heart of the bid process, which is to ensure that bidders have an equal and fair opportunity to have their bids considered and prevent an agency from picking and choosing among various bidders or potential bidders. There was absolutely no evidence which indicated that the number of contractors participating in Bid 5998 was non-competitive or was in any way fundamentally unfair. 11/ By rejecting all the bids in order to attempt to shop its bid, Respondent acted in an arbitrary and capricious manner and therefore, its rejection of the bids in this case cannot stand. Additionally, Respondent's attempt to reject the bids in order to allegedly increase the number of bidders participating in the re-bid and thereby reduce the price, violated its own specification in the bid documents which states: The contract award will be made to the responsible bidder submitting the lowest responsible aggregate bid within the pre-established construction budget. (emphasis supplied) By going outside the scope of its bid specifications, Respondent has acted in an arbitrary and capricious manner and may not reject Petitioner's bid on this basis. After the protest of Feimster-Peterson raised the issue of the amount of the budget/estimate and after its request to see the budget, Florida A&M began to review documents to determine its response to Feimster-Peterson. The basis underlying the figures cited in Mr. Martinez's letter of January 13, 1991, was arrived at by subtracting amounts spent by Florida A&M from the $682,000.00 appropriated by the legislature for the fire code and repainting projects. The overage of $55,000.00 claimed in Mr. Martinez's letter of January 14, 1991, was calculated by taking the "proposed budget" of $682,000.00 and subtracting the amount of $257,105.00 "in expenses for the stadium", for an "available balance" of $424,895.00. 12/ It was this account balance which was being claimed by FAMU to be the pre-existing construction budget referred to in the bid documents. Such an account balance does not constitute a pre-established construction budget because the balance was not established prior to the submission or opening of the bids. Additionally, an account balance is simply not a budget as that term is normally defined and used in the bid documents. Mr. Martinez did not identify the source of the expenses or the purpose for those expenditures. Mr. Martinez deferred all questions as to verification of the figures or the purpose of the expenditures to "Bob", which referred to Robert Goodwin, Jr. Mr. Goodwin was and still is, the Director of the Facilities Planning Office of Florida A&M and is responsible for the various purchase orders involved in this case. Mr. Goodwin took his instructions on which purchase order numbers to use from Dr. Murray and/or Dr. Humphries, Associate Vice President and President of Florida A&M University, respectively. For reasons outlined later in this Recommended Order, the expenditures claimed for the stadium are highly suspect. On or about February 6, 1991, Mr. Holifield, General Counsel of Florida A&M University, responded to Petitioner by enclosing a statement of budget estimate for Bid No. 5998. 13/ Attached to Mr. Holifield's letter of February 6th was a memorandum addressed "[t]o whom it may concern" dated February 5, 1991, from Robert Goodwin, Jr., the Director of Facilities & Planning for Florida A&M. The memo stated that the "budget estimate" for the Project was $367,351.00. Mr. Holifield's letter noted that Feimster-Peterson's bid "exceeded the budget estimate by $106,969.00." (emphasis added). He further noted that FAMU had chosen to re-bid the repainting project rather than accept the bid of the Petitioner. Mr. Holifield also addressed the pending bid protest by Feimster-Peterson as follows: Florida A&M University feels that it is the best interest of the citizens and taxpayers of the State of Florida to re-bid this Project rather than to award the job to your client. In view of the discrepancy between the bidder and the client and the estimated budget it would seem that now that you have been provided with the budget estimate, that you and your client would be willing to forego the bid protest which you are attempting to pursue. Rather, it would appear to be far more appropriate for you to simply join in the rebidding process. (emphasis added). Again, the basis for the decreasing budget figure was the legislatively appropriated funds available for the project less amounts which were supposedly attributable to the repainting and fire code projects, i.e. the account balance. However, what the evidence clearly showed was that, like the budget figures underlying Mr. Martinez's assertions in his letter of January 14, 1991, the latest budget figure of $367,351.00 was calculated by Florida A&M subtracting sums for expenditures which were made for projects unrelated to the fire code or repainting projects. In fact, several of the expenditures were for improvements to the public address system at Bragg Stadium. Similarly, some of the amounts claimed to have been expended for the repainting and fire code projects were expended for architectural fees on other projects. 14/ FAMU's officials were aware that such accounting was inappropriate. From this evidence, it appears that FAMU is attempting to spend or has spent money specifically appropriated for two certain purposes on projects unrelated to the appropriation and not approved for such use by either the legislature or the Board of Regents. Since these expenditures are all part of other projects separate and distinct from the fire code and repainting projects, they should not have been subtracted from the amount of money available to FAMU for the repainting project. 15/ There is no doubt that this "budget estimate" and the budget underlying the assertions made by Mr. Martinez in his letter of January 14, 1991, were false and were red herrings, developed after the fact, in an attempt by Respondent to throw Petitioner off the track of an otherwise valid bid protest. Moreover, beyond utilizing improper accounting, one of the most significant facts in this proceeding was that FAMU created no less than eight separate figures which it claimed to be the budgets for this project. Which figure FAMU used depended on who FAMU was dealing with at the time and the result FAMU desired to achieve. Such tactics by an agency are totally unacceptable and the use of such false figures to justify rejection of a bidder's bid is nothing short of bad faith on the part of an agency akin to fraud. Since Petitioner submitted the lowest and best responsive bid, Petitioner, at this point in time, was entitled to the award of Bid 5998. Another point not directly raised by FAMU in this proceeding, but suggested by the underlying facts and necessary to the resolution of this bid protest, is the question of whether bids may be rejected by an agency if the funds necessary to complete the project are no longer available, i.e. the agency has run out of money. On the surface, given the constraints of Florida's finance system, an honest lack of funds would appear to be an appropriate basis for an agency to reject all the bids. See Section 235.42, Florida Statutes. However, in this case, the evidence does not support a finding that the University no longer has the necessary funds to pay for the repainting project since the actual money from the trust fund has not been disbursed to FAMU and since FAMU's representations in regards to the status of the repainting project's account balance appear to be based on unlawful accounting and are less than credible. Since the evidence did not establish that FAMU no longer has the funds necessary to complete the project, Petitioner was entitled to the award of Bid 5998. However, because of FAMU's actions regarding Petitioner's bid protest which actions were highly prejudicial to Petitioner, time had moved on and, on February 25, 1991, FAMU discovered that there was lead in some portion of the paint on Bragg Stadium, in the amount of 1.9% by weight. The test was conducted by Professional Services Industries, Inc. on some paint chips from the stadium. The test utilized by Professional Services is known as the TCLP test. This discovery began a review by Florida A&M, in conjunction with Barnett, Fronczak Architects, of what changes, if any, needed to be made to the Specifications and what options were available for carrying out the repainting of the stadium. 16/ On March 19, 1991, the Project was "cancelled" by Addendum number 4 until the fall of 1991. Presently, it appears uncontradicted that the paint which is on Bragg Stadium contains lead. It is probable that the lead is contained in the primer coat, which is the first coat on the steel. In fact, the current specifications for the repainting project call for a red lead and oil primer coat to be placed on the steel structure of the stadium. Of the options which have been proposed by the architect, two of them assume that the lead paint will not be removed from the structure, but will essentially be sealed in by the new coatings. These options will avoid the creation and need for disposal of any hazardous waste containing lead and should result in either the same cost to perform the work or in a reduction in cost to perform the work. The third option is to completely remove all the paint and possibly create material which may be hazardous waste. This option is essentially the same type of sandblasting called for in Bid 5998, but may require more money to perform. Any possible increase in the cost of Bid 5998 would be due to the greater expense of disposing of any hazardous waste, if any such waste is created by the blasting operation, and whether the presence of the lead is an unforeseen condition as defined in the proposed contract which would entitle Petitioner to an increase of the bid price caused by the potential cost of disposal to it. In this case, the evidence did not demonstrate that the presence of the lead was an unforeseen condition. Article 3.15 of the proposed contract when compared to Article 10.1 appears to comtemplate the discovery of potentially hazardous materials. Additionally, as indicated earlier, the current specifications of Bid 5998 call for a lead primer coat. Under all the facts of this case, the presence of lead or lack of lead in the paint on Bragg Stadium would appear to be a circumstance the risk of which is assumed by the bidder in bidding the project; and therefore, would not be a changed or unforeseen condition which would justify rejecting all the bids. Importantly, the scope of the work, i.e. sandblasting and structural repair, would not change. Sandblasting is the same whether the surface being removed contains lead or does not contain lead. The structural repair required by Bid 5998 is not effected by the presence of lead in the paint on Bragg Stadium. The only differences would occur in the type of equipment used and the type of respirators worn by the workers. The equipment for lead removal has vacuums incorporated in its operation and uses a steel grit instead of sand. The steel grit actually reduces the amount of any potential hazardous waste by compacting it into a smaller volume. The respirators differ in the type of filters. Neither of these differences affect the cost of the work required in Bid 5998. Similarly, disposing of the end product of the blast operation would still be required under Bid 5998 whether the debris contains lead or does not contain lead. The only difference would be the ultimate disposal site of the barrels of debris, i.e whether at a regular landfill or at a disposal site for hazardous waste. All of these differences are already required under EPA, OSHA and DER rules regulating lead abatement, toxic chemicals and hazardous waste and are utilized by Petitioner when it encounters lead in its paint removal operations. Moreover, the bid documents contemplate that the bidder is familiar with all federal, state and local laws and regulations which affect the project in any manner. See Section B-3 "Instructions to Bidders." While it is uncontroverted that the paint contains lead, it is also not clear whether the end product created by a blasting operation would be hazardous waste requiring expensive disposal in a hazardous waste landfill and what amount, if any, would need to be placed in a hazardous waste landfill. The TCLP tests performed by Professional Service Industries were run on paint chips and not the abrasive debris that remains after a blasting operation. Therefore, the TCLP test results have no relevance as to what amount of hazardous waste, if any, would need to be removed from the site. In fact, it is impossible to determine whether the debris left over from the blast operation will be hazardous waste until the blast operation has begun and produced debris sufficiently representative of what may be expected during the course of the work and which is capable of being tested. The issue of lead arose long after the rejection of the bids on the basis of Feimster-Peterson's bid being over the budget and would not have become a potential basis had FAMU acted in a responsible manner in the award of this bid. It is understood that the University and its architects are still trying to determine what, if any, action needs to be taken regarding the presence of lead in the paint. The evidence established that at a minimum the architect would have suspended the project to give them time to study the lead and determine what course of action should be taken. At the most, the architect would have cancelled the project. Added to such an analysis is the fact that the Bid specifications appear to require a red lead and oil primer paint to be placed on the structural steel of the stadium and that under the facts of this case, the presence of lead in the paint on the stadium would not be an unforeseen condition. In either event, the discovery of the lead did not undermine the scope of the repainting project as it is comtemplated in the bid documents and may have only resulted in change orders under the terms of the proposed contract. 17/ The General Conditions of the contract provide in Article 3, Administration of the Contract, paragraph 4.3, Claims and Disputes, subparagraph 4.3.6, Claims for Concealed or Unknown Conditions, as follows: If conditions are encountered at the site which are (1) subsurface or otherwise concealed physical conditions which differ materially from those indicated in the contract documents or (2) unknown physical conditions of an unusual nature, which differ materially from those ordinarily found to exist and generally recognized as inherent in construction activities of the character provided for in the Contract Documents, then notice by the observing party shall be given to the other party promptly before conditions are disturbed and in no event later than twenty-one days after the first observance of the conditions. The Architect/Engineer will promptly investigate such conditions and, if they differ materially and cause an increase or decrease in the contractor's cost of, or time required for, performance of any part of the work, will recommend an equitable adjustment in the Contract Sum or Contract Time, or both . . . . Article 7, Changes in the Work, also provides a mechanism by which the Architect/Engineer and the Owner may order changes in the work after execution of the contract. Paragraph 7.3, Construction Change Directives, provides the mechanism by which the amount of a construction change directive is determined. A change order is simply a revision of the scope of the contract, requiring that something be done differently, that more be done, or that less be done, than what is within the original scope of work of the contract. Article 14, Termination or Suspension of the Contract, paragraph 14.3, Suspension by the Owner for Convenience, provides in relevant part: The owner may, without cause, order the contractor in writing to suspend, delay or interrupt the work in whole or in part for such period of time as the owner may determine. An adjustment shall be made for increases in the cost of performance of the contract including profit on the increased cost performance, caused by suspension, delay or interruption . . . . (Emphasis added). It is clear that conditions, such as the lead in this case, are contemplated by both the bid and the contract which is part of that bid. In this case, but for FAMU's actions, Petitioner would have been awarded the contract prior to the discovery of the lead. Had Florida A&M entered into a contract with Feimster-Peterson to perform the repainting project when it should have, it would have been guided by Article 14.3 of the specifications, "Suspension by the Owner for Convenience." The evidence did not demonstrate that the discovery of the lead would sufficiently change the scope of the repainting project to the extent that a new bid would have to be developed and that the contract terms of Bid 5998 were inadequate to handle any changes in the scope of the work for the repainting project. Such a result is especially desirable where, as in this case, the University has acted in such a way so as to undermine the fairness of the competitive bidding process and is attempting to spend appropriated money in a manner not authorized by statute. In essence, FAMU has undermined the competitive bidding process to the extent that it would be unfair to re-bid the project since it is impossible to remove FAMU's past conduct from any rebid on any re-vamped specifications. The only remedy, in this case is to award Bid 5998 to Petitioner as the lowest and best responsible bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that Florida A&M University enter, on behalf of the Board of Regents, a Final Order awarding Bid 5998 to Petitioner as the lowest, responsible bidder on the repainting project. RECOMMENDED this 18th day of September, 1991 in Tallahassee, Leon County, Florida. DIANE CLEAVINGER 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 18th day of September, 1991.
Findings Of Fact In February 1994 the School Board, by and through its design consultants, W. R. Frizzell Architects, Inc., and, more particularly, its project architect, Byron Tramonte, issued plans, specifications, and related contract documents associated with additions, remodeling, and reroofing of John F. Kennedy Middle School, Palm Beach County, Florida. At a pre-bid conference conducted at the project job site attended by representatives of the School Board, its consultants, as well as representatives of Petitioner, Respondent, and Intervenor, among others, Petitioner's Greg Hill questioned the sufficiency of the drawings with respect to the earth work requirements associated with Alternate 1. As a result of this inquiry, the owner's design consultant issued Addendum 2 (including an as-built drawing) dated February 23, 1994, which was ". . . made available for grading estimates." The drawing attached to Addendum 2 had two sets of elevation numbers on it. One set of elevation numbers were underlined. The clearest of the underlined numbers were difficult to read. Many of the underlined numbers were impossible to read. The other set of elevation numbers on the subject drawing were boxed. The boxed numbers were all clear and legible. In view of the purpose for which the drawing was attached to Addendum 2, the most logical interpretation of the drawing was that the boxed elevation figures represented the existing elevations. The drawing attached to Addendum 2 also included some circled handwritten information. In large letters the circled information read: "JFK MIDDLE SCHOOL AS BUILT EXIST. ELEV." Immediately below in smaller letters it read: "Note: The 2 softball fields were not constructed. 2/23/94." The circled handwritten information was to some extent ambiguous. But it was an ambiguity that could be resolved by careful site inspection. Careful site inspection would have revealed that the boxed numbers corresponded to existing site conditions and that the underlined numbers, to the extent they were legible, did not. Petitioner's Vice President Greg Hill was primarily responsible for the preparation of the portion of the Petitioner's bid relating to Alternate 1. Greg Hill visited the job site during the prebid conference and also visited the job site on one other occasion after receiving Addendum 2, but before submitting the Petitioner's bid. Greg Hill is an experienced estimator with respect to matters involving the type of work encompassed by Alternate 1. In spite of his experience and in spite of his two pre-bid site visits, Greg Hill misinterpreted the architect's intent and used the underlined elevations on the drawing attached to Addendum 2 as a basis for estimating portions of the work associated with Alternate 1. As a result of this mistake Greg Hill reached erroneous conclusions about the amount of fill that would be required and substantially overestimated the amount of fill. This mistake caused the Petitioner's bid for Alternate 1 to be somewhat higher than it would have been if Greg Hill had based his estimates on the boxed elevation numbers. A similar mistake was made by CSR Heavy Construction-North, Inc., a company that was seeking work as a subcontractor on Alternate 1. On the last day for submitting bids on the subject project, the Intervenor received an unsolicited bid from CSR Heavy Construction-North, Inc., to perform some or all of the work encompassed by Alternate 1. CSR's bid was much higher than the Intervenor's proposed bid for that work, which caused the Intervenor's President to become worried that perhaps he had misinterpreted the drawings attached to Addendum 2. Intervenor's President called the School Board Architect and asked for confirmation of his interpretation to the effect that the bidders should base their estimates on the boxed elevation numbers on the drawing attached to Addendum 2. The architect confirmed that the Intervenor's President had correctly interpreted the drawing. The architect did not call any other potential bidders to tell them they should use the boxed numbers because he thought it was obvious that all potential bidders should use the boxed numbers. The bids for the subject project were opened on March 3, 1994. The Petitioner was the apparent responsive low bidder for the base bid. The Intervenor was the apparent responsive low bidder taking together the base bid and the bids on Alternates 1 and 2. The School Board published notice of its intent to award a contract to the Intervenor for the base bid and Alternates 1 and 2. The Instructions To Bidders portion of the subject bid specifications included the following provisions: BIDDER'S REPRESENTATIONS: Each Bidder, by making his Bid, represents that he has read and understands the Bidding Documents. Each Bidder, by making his Bid, represents that he has visited the site and familiarized himself with the local conditions under which the Work is to be performed. BIDDING PROCEDURES: * * * 3.11 Familiarity with Laws: The Bidder is assumed to be familiar with all Federal, State and Local Laws, Ordinances, Rules and Regulations, that in any manner affect the Work. Public Contracting and Purchasing Process Florida Statute, Section 287.132-.133 (Public Entity Crimes) is applicable. Ignorance on the part of the Bidder will in no way relieve him from responsibility. * * * AWARD OF CONTRACT: The Contract, if awarded by the Owner, will be awarded to the lowest bona fide responsible Bidder; provided the Bid is reasonable and it is in the interest of the Owner to accept the Bid. The method of determining the lowest bona fide Bid from Bidders shall be the Base Bid price plus or minus Alternate Prices listed on the Bid Proposal Form which are accepted by the Owner. Alternates will be considered for acceptance by the Owner as set forth in the Alternate section of the Specifications, Division One-General Requirements, Section 01030-Alternates. * * * BID PROTEST PROCEDURES: * * * 10.02 The Bid Documents/"Advertisement tol Bid" will be posted in the office of thel Department of Capital Projects at the time of the solicitation to Contractors. Any person who is affected adversely with respect to the Bid Documents shall file a notice of protest in writing within seventy-two (72) hours after the receipt of the Bid Documents, and SHALL FILE A FORMAL WRITTEN PROTEST WITHIN TEN (10) DAYS AFTER THE DATE HE FILED THE NOTICE OF PROTEST. Failure to file a notice of protest or failure to file a formal written protest shall constitute a waiver of proceedings under Chapter 120. It is important to the proper functioning of the public works bidding process that all bidders be treated alike. To this end, important information furnished to one potential bidder should be furnished to all other potential bidders.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the School Board enter a Final Order in this case dismissing the protest of the Petitioner and awarding a contract to the Intervenor for the base bid and Alternates 1 and 2. DONE AND ENTERED this 17th day of May 1994 in Tallahassee, Leon County, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 17th day of May 1994. APPENDIX The following rulings are the specific rulings on all proposed findings of fact submitted by all parties: Findings submitted by Petitioner. Paragraphs 1 through 5: Accepted in whole or in substance. Paragraph 6: Rejected as not completely accurate. The practices described are common, but not universal. Drawings usually have a legend to explain the difference between existing elevations and elevations to be achieved. Paragraph 7: The first sentence of this paragraph is rejected as contrary to the greater weight of the evidence. The remainder is accepted in substance. Paragraph 8: The first sentence of this paragraph is rejected as constituting subordinate and unnecessary details. The last sentence of this paragraph is rejected as constituting inferences or arguments not supported by the greater weight of the evidence. Paragraphs 9, 10, and 11: Accepted in substance, but with some modifications in the interest of clarity and accuracy. Paragraph 12: Rejected as contrary to the greater weight of the evidence. Paragraph 13: Accepted in part. Accepted that if the Petitioner had used the boxed elevation numbers, it's proposal on Alternate 1 would probably have been substantially lower. The remainder of this paragraph is rejected as speculation Paragraph 14: Rejected as not fully supported by competent substantial evidence and as, in any event, subordinate and unnecessary details. Paragraph 15: Rejected as constituting primarily argument, rather than proposed findings of fact. To the extent the material in this paragraph purports to be factual, it tends to be contrary to the greater weight of the evidence. The greater weight of the evidence is to the effect that there were no ambiguities in Addendum 2 that could not have been resolved by careful site inspection. Paragraph 16: Accepted in substance. Paragraph 17: Rejected as constituting subordinate and unnecessary details. Paragraph 18: Rejected as contrary to the greater weight of the evidence; careful site inspection would have confirmed that the boxed numbers represented the existing elevations. Paragraph 19: Accepted. Paragraph 20: Rejected as speculative and as not supported by persuasive competent substantial evidence. Paragraph 21: Rejected as constituting a proposed ultimate conclusion of law, rather than a proposed finding of fact, and as, in any event, a conclusion that is not warranted by the evidence. Findings submitted by Respondent. Paragraphs 1 through 8: Accepted in whole or in substance. Paragraph 9: Rejected as constituting subordinate and unnecessary details. Paragraph 10: Accepted in substance. Paragraph 11: Rejected as constituting subordinate and unnecessary details. Paragraph 12: Rejected as constitution a proposed ultimate conclusion of law, rather than a proposed finding of fact. (The conclusion is warranted, but it is a conclusion nevertheless.) Findings submitted by Intervenor: (No separate proposals; the Intervenor adopted the proposed findings of the Respondent.) COPIES FURNISHED: Robert A. Rosillo, Esquire School Board of Palm Beach County 3318 Forest Hill Boulevard, Suite C-302 West Palm Beach, Florida 33406-5813 Alan C. Brandt, Jr., Esquire Leiby, Ferencik, Libanoff and Brandt Suite 400 150 South Pine Island Road Fort Lauderdale, Florida 33324 Richard B. Warren, Esquire Kelley, Aldrich & Warren, P.A. 801 Spencer Drive West Palm Beach, Florida 33409 Dr. C. Monica Uhlhorn, Superintendent Palm Beach County School Board 3340 Forest Hill Boulevard West Palm Beach, Florida 33406-5869
Findings Of Fact In July 1988, the Department of Health and Rehabilitative Services issued an Invitation to Bid (ITB) seeking proposals to lease approximately 26,000 square feet of space for offices and client services in Ft. Walton Beach, Florida. The ITB was the second issued, following the Department's determination that the first ITB did not result in an acceptable bid. Page 15 of the 16 page bid submittal form is entitled "Evaluation Criteria" and contains a list of weighted factors which are to be used in the evaluation of bids. In the second ITB, paragraph 3(b) of the criteria stated, "[P]rovisions of the aggregate square footage in a single building. Proposals will be considered, but fewer points given, which offer the aggregate square footage in not more than two locations provided the facilities are immediately adjacent to or within 100 yards of each other." (emphasis supplied) At approximately the same time as the Department's issuance of the second ITB, several meetings occurred related to concerns generated by the response to the first ITB. One meeting took place between Nelson P. Davis (the unsuccessful bidder in ITB #1) and Department representatives, including James Peters, HRS's District One Manager for Administrative Services. Davis currently leases to the Department, two adjacent buildings sited at 417 Racetrack Road, Ft. Walton Beach which comprise approximately 4,000 square feet less than the Department is now seeking. Davis' bid in response to the first ITB included utilization of a third building to meet the Department's space needs. 1/ During the meeting which included Peters, Davis, and others, it became apparent that there was confusion over the meaning of the word "location" in paragraph 3(b) of the evaluation criteria. Peters understood the word to mean "building" while Davis understood the word to mean an area which could be the site of more than one building. Following the Davis-Peters meeting, other meetings occurred at which Department officials considered the issue. While some representatives of the Department believed that the word "location" was synonymous with "building," others believed the use of "location" to be ambiguous. To clarify the Department's preference related to number of buildings, an amended page 15 of the bid submittal form was issued on July 2, 1988. The amended form, entitled "Evaluation Criteria" states in paragraph 3(b), "[P]rovisions of the aggregate square footage in a single building... Proposals will be considered, but fewer points given, which offer the aggregate square footage in not more than two buildings provided the facilities are immediately adjacent to or within 100 yards of each other." (emphasis supplied.) The amendment was issued at the direction of James Peters and was approved by Charlene Schembera, the District I Administrator. The amendment to page 15, paragraph 3(b), is a reasonable effort by the Department to clarify their intent in previous use of the word "location." The assertion by Davis that the change was made at the instigation of James Peters in order to prohibit Davis from successfully submitting a responsive bid of three buildings is not supported by the evidence. While James Peters has expressed on at least one occasion a desire to avoid entering into further business arrangements with Davis, he has stated that his personal opinion would not influence his participation in the bid solicitation process. The evidence did not indicate that his participation in the decision to issue an amended paragraph 3(b) of the evaluation criteria was based on his negative personal opinion regarding Davis, nor did the evidence indicate that any other person involved in the process had negative opinions about Davis. Further, although some Department officials testified that a bid which contained more than two buildings would be deemed non-responsive and disqualified from consideration by operation of the amended paragraph 3(b), such a position probably is not tenable, but is not at issue in this proceeding in that the Department has not yet acted on bids submitted in response to the second ITB. The Department has valid reasons for attempting to concentrate its personnel and client services in a single building, or in as few buildings as is possible, 2/ however the Invitation to Bid does not restrict bidders in such a manner. The sole expression of the preference for a single building, or for not more than two buildings, is expressed in paragraph 3(b) of the evaluation criteria on page 15. The amendment to page 15 of the bid submittal form does not appear to bar the submission by Davis or by any other bidder of a responsive proposal containing more than two buildings. Page 15 is clearly entitled "Evaluation Criteria." The criteria are nine weighted "award factors" upon which "all bids will be evaluated." Paragraph 3(b), as one factor for consideration in the evaluation process, expresses a preference for a single building containing the required aggregate square footage. The paragraph further advises that proposals will be considered but fewer points awarded for proposals containing not more than two buildings closely located. The weighting factor for paragraph 3(b) of the evaluation criteria is five percent of total possible points. The clear indication of the amended paragraph is that proposals which contain more than two buildings will receive no points under 3(b). The Department's position would disqualify as non-responsive a bid of three buildings based solely on an evaluation factor worth five percent of the total available points. On the other hand, a bid containing two buildings, separated by not more than 100 yards, would apparently be responsive and would be evaluated, even if the two buildings were divided by a major highway or other substantial obstacle. The Department's proposed position is not logical, but is not raised herein since it has not yet been applied in this case.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Department of Health and Rehabilitative Services enter a Final Order dismissing Case No. 88-4392BID. DONE and ENTERED this 12th day of October, 1988, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of October, 1988.
The Issue Whether Respondent's action to reject all bids submitted in response to ITB 13-803-206, relating to the removal and replacement of the public address system at Pinellas Park High School, is illegal, arbitrary, dishonest, or fraudulent, as alleged in the Amended Petition.
Findings Of Fact On March 4, 2013, ITB was issued by Respondent for work related to the removal and replacement of the public address system at Pinellas Park High School in Largo, Florida. According to the Special Conditions portions of the ITB, the "scope" of the project is to "[p]rovide labor and materials to remove and replace the auditorium sound system as per plans and specifications by Keane Acoustics, Inc." The ITB was assigned bid number 13-803-206 by Respondent. Bids for the contract were to be submitted to Respondent by 3:00 p.m., April 11, 2013. Bids for the project were timely received from two companies. The first company, Becker Communications, Inc., d/b/a BCI Integrated Solutions (BCI), submitted a bid in the amount of $130,756.66. Petitioner submitted a bid in the amount of $116,000.00. There is a section of the ITB titled "special conditions." The special conditions provide in part that "[t]his is an ALL or NONE bid [and] [t]he entire contract shall be awarded to the lowest responsive and responsible bidder meeting the specifications." On April 22, 2013, Respondent posted a notice advising of its intent to award the contract to BCI. Although Petitioner submitted the lowest bid, Respondent determined that Petitioner's bid was non-responsive because the bid failed to include "proof of 5 years [of] experience with this type of work" as required by the special conditions of the ITB. Petitioner interpreted this provision as requiring five years of experience as a certain type of general contractor, which Petitioner had, whereas Respondent intended for the ITB to convey that five years of experience related to the removal and installation of audio equipment was the desired type of experience. Petitioner's failure to respond to the ITB in the manner contemplated by Respondent was a technical, nonmaterial irregularity.1/ Numbered paragraph six of the General Terms & Conditions of the ITB provides in part that Respondent "expressly reserves the right to reject any bid proposal if it determines that the . . . experience of the bidder, compared to work proposed, justifies such rejection." On April 24, 2013, Petitioner provided to Respondent a notice advising of its intent to protest the award of the contract to BCI. On May 3, 2013, Petitioner filed its formal protest challenging Respondent's intended action of awarding the contract to BCI. Petitioner's formal protest enumerated several grounds. Of particular concern to Respondent were Petitioner's assertions that the ITB was "inconsistent with Florida law since bidders [were] not required to submit a List of Subcontractors by the time of opening bid"2/ and that provisions of the ITB were ambiguous with respect to the type of experience required to qualify for bidding.3/ Prior to receiving Petitioner's protest, Respondent was unaware of the fact that its bid specifications governing the disclosure of subcontractors did not comply with Florida law. Upon consideration of Petitioner's grounds for protest, Respondent determined that the ITB, as alleged by Petitioner, failed to comply with section 255.0515, Florida Statutes (2012),4/ and that there was ambiguity in the language regarding the experience requirements for bidders.5/ Respondent refers to the problems with the ITB as "procedural errors." These procedural errors will be referred to herein as "irregularities" as this term is more in keeping with the nomenclature of this area of jurisprudence. Given the ITB's irregularities, Respondent decided to reject all bids. In explaining Respondent's rationale for rejecting all bids, Michael Hewett, Respondent's Director of Maintenance,6/ testified that "the [irregularities] were such that [they] potentially could give an unfair advantage to one bidder over another." As for the issue related to the requirements of section 255.0515, Mr. Hewett explained that neither of the two bidders submitted a listing of subcontractors. It would have been competitively disadvantageous to BCI if Petitioner were able to successfully argue that BCI should be disqualified for failing to provide a listing of subcontractors when Petitioner also failed to provide such listing. During the same approximate time that the ITB in the present case was issued, Respondent issued an ITB for nearly identical work to be performed at one of its other facilities (Palm Harbor). In all material respects, the Palm Harbor ITB was identical to the one at issue herein. Unlike the present case, BCI was the sole bidder for the Palm Harbor project and this distinguishing fact reasonably explains why Respondent did not reject BCI's bid for the Palm Harbor Project even though the ITB therein was plagued with the same irregularities found in the present case.7/
Recommendation Upon consideration of the above findings of fact and conclusions of law, it is RECOMMENDED: That the Pinellas County School Board enter a final order finding that the rejection of all bids submitted in response to ITB 13-803-206 was not illegal, arbitrary, dishonest, or fraudulent, and dismissing Tamco Electric, Inc.'s instant protest. DONE AND ENTERED this 16th day of October, 2013, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 16th day of October, 2013.
