The Issue Whether the Department of Transportation's (DOT) intended decision to award contract T2442 for the Intelligent Transportation System improvements (Project) and other incidental construction on State Road 9A, in Duval County, to American Lighting & Signalization, Inc. (ALS), is contrary to the agency's governing statutes, the agency's rules or policies, or the bid or proposal specifications.
Findings Of Fact Based upon the demeanor and credibility of the witnesses and other evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made:1/ The contract being protested is T2442 for the Intelligent Transportation System improvements and other incidental construction for State Road 9A, in Duval County. The Department advertised the bid solicitation notice for the Project on July 27, 2012. The bid solicitation notice included a list of all of the pay items and estimated quantities for the project. DOT also posted all of the pay items online in two formats. One format was a downloadable file that could be used in software, and the other was similar to an Excel spreadsheet file. These formats could be used to formulate a bid. Changes to pay items are issued in an Addendum, and while two addendums were issued for this project, neither affected the pay items for the project. For several years, DOT has mandated that prospective bidders use an automated, online bidding process, by which prospective bidders request bid documents and submit their bids using the DOT's website. The letting date established as the deadline for submission of bids via electronic submission was September 26, 2012, and was set forth in the bid solicitation notice. In order to be considered, all bids were due by 10:30 a.m. on that day. Letting is the term used to indicate the date that the bids are due. The bid solicitation notice included a requirement that bidders for the Project attend a mandatory pre-bid meeting to be held on August 20, 2012. Hinson Electrical is a licensed electrical contracting company based in Jacksonville, Florida. The company has completed "hundreds" of projects for the State of Florida, including DOT, and is pre-qualified to bid on jobs with DOT. The mandatory pre-bid meeting was held on August 20, 2012, as scheduled. G. Christopher Ginn, Project Manager for Hinson Electrical, attended the pre-bid meeting, signed his name, and identified the company he represented (Hinson Electrical) on the sign-in sheet. Section 337.168(2), Florida Statutes, provides: (2) A document revealing the identity of persons who have requested or obtained bid packages, plans, or specifications pertaining to any project to be let by the department is confidential and exempt from the provisions of section 119.07(1) for the period which begins two working days prior to the deadline for obtaining bid packages, plans, or specifications and ends with the letting of the bid. As a business strategy, Hinson Electrical routinely orders bid documents within the two-day blackout period mandated by section 337.168(2), during which time DOT is required to take down its list of contractors who have requested bid documents concerning a particular project. Ordering bid documents within the blackout period prevents competitors from discovering whether Hinson Electrical is bidding for a particular project. The blackout period for the Project began at 5:00 p.m. on Friday, September 21, 2012. The deadline to order the bid documents for the Project was 10:30 a.m. on September 25, 2012. There is no requirement that contractors request bid documents prior to the pre-bid meeting (if one is required for a particular project), or at any time prior to the order deadline, which is 24 hours before the bid deadline. DOT acknowledged at hearing that it is Hinson Electrical's prerogative to order the bid documents within the blackout period during which the identities of bidders are kept confidential. Hinson Electrical ordered the bid documents for the Project at approximately 1:00 p.m. on September 24, 2012. The computerized system immediately provided access for Hinson Electrical to download the plans and specifications for the project at issue. However, four minutes later, at approximately 1:04 p.m., Hinson Electrical simultaneously received an email with a "Prequalification Failure Notice," and a second email stating that the bid document request for the Project was "pending." The Prequalification Failure Notice indicated that the bid document was not provided because Hinson Electrical had not attended the required pre-bid meeting for the Project.2/ Failure to attend the pre-bid meeting was the only basis stated in the Prequalification Failure Notice for DOT refusing to provide the bid document. As noted, Hinson Electrical's representative did in fact attend the pre-bid meeting for the Project, and he signed the sign-in sheet, attesting to his presence at the meeting. The sign-in sheet had been transmitted to DOT on August 21, 2012, the day after the pre-bid meeting was held. Thus, DOT's basis for sending Hinson Electrical a Prequalification Failure Notice was in error. The Prequalification Failure Notice also stated, "[Y]ou will be contacted by email or phone as soon as possible during business hours regarding requirements for obtaining the bid documents." However, DOT did not send an email or call Hinson Electrical after 1:04 p.m. on September 24, 2012, or at any time on September 25, 2012. Phillip Davis, a DOT employee in the Contracts Administration Office, was "blind copied" on the Hinson Electrical Prequalification Failure Notice email, with a "high importance" tag. Mr. Davis' job responsibilities include following up on these types of notices, though he is not supervised to ensure this occurs. Mr. Davis' responsibilities also include checking sign-in sheets from pre-bid meetings to authorize release of bid documents to contractors. DOT admits that Mr. Davis did not read the Hinson Electrical Prequalification Failure Notice; did not check the sign-in sheet from the pre-bid meeting; and made no attempt to contact Hinson Electrical, as promised in the notice. From September 20 through 25, 2012, Daniel Hinson and Chris Ginn obtained quotes from suppliers and subcontractors to prepare a bid for the Project. Hinson Electrical also secured a bid bond for the Project, and had everything necessary to submit a bid, except for the actual bid document. In the afternoon or early evening of September 25, 2012, Daniel Hinson sat down at his computer with the price lists and quotes he had obtained to prepare a bid for the Project. It was then that Mr. Hinson discovered DOT had not granted him access to the bid document for this Project, and that the failure notice he had received pertained to this Project, and was in error. Hinson Electrical was bidding on a total of eight contracts at that time, some of which did not have a mandatory pre-bid meeting. As of the close of business on September 25, 2012, DOT had still not made any effort to contact Hinson Electrical, as promised in the failure notice. At 7:55 p.m. on September 25, 2012, Hinson Electrical sent an email to the Contracts Administration general email address, stating that Hinson Electrical's representative had attended the pre-bid meeting and asking why Hinson Electrical was being excluded from the bidding. Shortly after 7:00 a.m. the following morning (September 26, 2012, the bid deadline), Chris Ginn called the project inspector, Thomas Woods of HNTB Corporation, on Hinson Electrical's behalf, and requested that HNTB confirm that Hinson Electrical's representative had attended the pre-bid meeting. At 7:32 a.m. that same morning, Mr. Woods sent an email to Juanita Moore notifying her of the error and confirming that Hinson Electrical's representative had indeed attended the pre-bid meeting. The Contracts Administration Office opened at 8:00 a.m. on the day of the bidding deadline. Within 36 minutes (by 8:36 a.m.), Ms. Moore reviewed Mr. Woods' email; checked the sign-in sheet; and instructed a subordinate, Colette Jackson, to send the bid document to Hinson Electrical. Ms. Jackson immediately sent the bid document to Hinson Electrical under a cover email. Ms. Moore testified that Phillip Davis could have easily gone through these same steps on September 24, 2012 (two days before the bid deadline), and timely transmitted the bid document to Hinson Electrical, if he had only read the Prequalification Failure Notice on which he was copied. Ms. Moore agreed that 24 hours would have been sufficient time for Mr. Davis to check the sign-in sheet and release the bid document. When DOT finally provided the bid document to Hinson Electrical, it was 1 hour, 54 minutes before the bid submission deadline. At 8:40 a.m. on September 26, 2012, (four minutes after receiving the bid document) Daniel Hinson spoke by telephone with Colette Jackson about needing additional time to complete Hinson Electrical's electronic bid submission. Colette Jackson testified that one of her responsibilities at DOT is to move bid deadlines, and that she can do so quickly upon receiving instructions from Ms. Moore to do so. However, Ms. Jackson did not have authority to provide the requested relief, so she transferred the call to Ms. Moore. Upon being transferred to Ms. Moore, Mr. Hinson asked for additional time to complete the Hinson Electrical bid for the Project. That request was refused by Ms. Moore. In her view, the fact that the pay items and estimated quantities for the project had previously been provided should have enabled Hinson Electrical to submit a bid within the two hours remaining prior to the deadline. In addition, Ms. Moore felt Hinson Electrical should have taken it upon itself to contact DOT immediately upon receiving the disqualification notification if it believed it had complied with all prerequisites. Contrary to Ms. Moore's opinion, Mr. Hinson testified that it would have taken him about four hours to go through the various steps to submit Hinson Electrical's online bid for the Project. DOT's position that Hinson Electrical could have completed and submitted its bid with less than two hours remaining is rejected as not credible. However, even if that were possible, it would have put Hinson Electrical at a disadvantage because every other bidder was able to download the bid document immediately upon request after the pre-bid meeting. Daniel Hinson has submitted bids for hundreds of DOT projects (including "dozens" using the current online system) and he reasonably believed there was insufficient time remaining before the deadline to prepare a competent bid and ensure its accuracy. Mr. Hinson's testimony regarding the amount of time necessary to prepare a complete and competent bid for the Project is more credible than the testimony of Ms. Moore. Considering the potential cost to Hinson Electrical of a mistake made in haste, it was entirely reasonable for Hinson Electrical to decline to submit a bid, and instead request a bid extension. Likewise, it was unreasonable for DOT to decline the extension request, given that it was DOT's mistake that necessitated the extension. DOT extends bid deadlines dozens of times each year, for various reasons, including computer issues, mistakes in the bid documents, or bad weather. Ms. Moore testified about bid deadlines that had been moved, three or four times in some cases, for reasons including computer glitches, website issues, and "technical problems." In one such instance, contractors could not obtain their bid documents on the Monday before a Wednesday letting (which is what happened to Hinson Electrical in this case), and DOT postponed the bid deadline. In another instance, a bid deadline was postponed for a third time "because the vendors couldn't download what they needed to bid." And in another example, the bid deadline was postponed with notice provided just 92 minutes before the deadline due to "server issues at the Department." In this final example, once the malfunction was identified, DOT promptly sent the notice of postponement to the bidders and later completed the other necessary steps to move the bid deadline. A postponement notice can be sent to bidders in less than ten minutes after the decision to postpone a bid is made. All other steps required to move a bid deadline are typically accomplished by DOT personnel in about an hour. DOT knows of no harm that would have come to the other bidders had DOT agreed to move the bid deadline to allow Hinson sufficient time to submit its online bid. At 9:22 a.m. on September 26, 2012, Daniel Hinson sent an email to Colette Jackson in response to her email, stating there was insufficient time for Hinson Electrical to prepare its bid for the Project and that a protest would be filed if DOT posted its intent to award the contract to one of the other bidders. The letting of the project occurred as scheduled at 10:30 a.m. on September 26, 2012. At approximately 4:00 p.m. on October 24, 2012, DOT posted notice of its intent to award the contract to ALS. This was the second posting date for the September 26, 2012 letting date. Thereafter, Hinson Electrical timely served its notice of protest, formal protest pleading, and the required bond. The advertisement for the Project reads, in part, "Bidders are hereby notified that all bids on any of the following projects are likely to be rejected if the lowest responsive bid received exceeds the engineer's estimate by more than ten percent (10%)." DOT does reject all bids for being too high in some cases. The bid submitted by ALS for the Project exceeded the proposal budget estimate of $4,183,958 by 19.9 percent (ALS' winning bid was $5,016,501.73). The Contract Award Committee (Committee) is the DOT body with discretion to reject all bids for a project. However, Ms. Moore never informed the Committee of Hinson Electrical's situation so that it could determine whether the Project should be rebid. Even after posting notice of intent to award the Project to ALS, DOT retained discretion to reject all bids, but Ms. Moore was unaware of that discretion and never discussed the matter with the Committee. Hinson Electrical credibly established that it would have submitted a bid of $4,973,361.99 for the Project had DOT provided the online bid document when Hinson Electrical first requested it. Thus, Hinson Electrical would have been the low bidder, and presumably awarded the contract. DOT had at least three opportunities to correct its mistake and allow Hinson Electrical an opportunity to bid. DOT could have (l) extended the bid deadline, as it has in many other cases; (2) rejected all bids and rebid the Project, before posting notice of intent to award the contract; or (3) rejected all bids even after posting notice of intent. In their Prehearing Stipulation, the parties stipulated to the following: DOT has no policy statements, handbook provisions, internal memoranda, guidelines, or other documents regarding the following subjects: How a failure to timely transmit bid documents in response to a prospective bidder's request, whether due to a transmission error or otherwise, should be handled or what relief may be provided to the bidder; Acceptable grounds for extending a bid submission deadline; How an erroneous determination that a prospective bidder for a project was not qualified to bid should be handled, either before or after the bid deadline has expired; Relief that can or should be provided to a prospective bidder who was denied the opportunity to bid for a project due, at least in part, to some irregularity in the bidding process; Relief that can or should be provided to a prospective bidder who was denied the opportunity to bid for a project due, at least in part, to some error made by FDOT (including its computer system); and How to handle a situation in which all received bids exceed the budget for the project by more than 10%. (Prehearing Stipulation, pgs. 11-12)
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED: That a final order be entered by the Department of Transportation that rescinds the Notice of Intent to award Contract T2442 to American Lighting & Signalization, Inc. DONE AND ENTERED this 21st day of June, 2013, in Tallahassee, Leon County, Florida. S W. DAVID WATKINS 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 21st day of June, 2013.
The Issue Whether Petitioner/Intervenor Hedin's challenge to Respondent's preliminary determination to award Lease No. 590:2241 to 1436 Building, Inc. should be sustained? Whether Petitioner/Intervenor Schlitt's challenge to said preliminary determination should be sustained?
Findings Of Fact Based upon the record evidence, the following Findings of Fact are made: 1 In March, 1991, after requesting and receiving approval from the Department of General Services, the Respondent issued an Invitation to Bid for Lease No. 590:2241 (hereinafter referred to as the "ITB"). The cover page of the ITB contained the Bid Advertisement, which read as follows: The State of Florida, Department of Health and Rehabilitative services is seeking approximately 17,064 net rentable square feet of office space to lease in Indian River County within the following boundaries: North, to Lindsey Road, South to Olso Road, East to A1A and West to Kings Highway. Space must be in an existing building. Occupancy no later than October 1, 1991, or within 120 days after notification of bid award, whichever occurs last. Desire a five (5) year lease with five (5) one year renewal options. Sealed bids will be received until 3:30 p.m.,, April 24, 199[1] at Riviera Beach, FL. Information and specifications will be provided to all interested parties at a mandatory pre-proposal conference to be held at Department of Health and Rehabilitative Services, 1050 15th Street West, Riviera Beach, FL. 33404, April 5, 1991 at 1:00 p.m. The Department of HRS reserves the right to reject any and all bids received and if necessary to reinstate procedures for soliciting competitive bids. The office space sought by Respondent was to house a client service center that is currently operating out of a 12,000 square foot facility owned by Petitioner/Intervenor Hedin. Respondent needs approximately 5,000 more square feet of office space for this center. Page B-1 of the ITB contained the definitions of various terms used in the ITB. Among the terms defined was "lowest and best bid." "Lowest and best bid" was defined as follows: That bid selected by the District Administrator, designee, or Deputy Secretary upon the recommendation of the bid evaluation committee following an objective and detailed process to evaluate and compare bids. "Lowest" refers to the total evaluation score. Weights for evaluation criteria are prescribed on pages B-7 through 9. Actually, this information was found on pages B-5 though 7 of the ITB, which read in pertinent part as follows: EVALUATION OF BIDS Bids received are first evaluated to determine technical responsiveness, such as use of Bid Submittal Form, inclusion of required information, data, attachments, and signatures. Non- responsive bids will be withdrawn from further consideration. Non-responsive bidders will be informed promptly by certified mail. Responsive bids are presented to a bid evaluation committee for comparison and formulation of a recommendation for award. This is accomplished by a visit to each proposed property and application of the evaluation criteria. The committee's recommendation will be presented to the Department official having award authority for final evaluation and determination of a successful bidder. EVALUATION CRITERIA AWARD FACTORS The successful bidder will be that determined to be the lowest and best. All bids will be evaluated based upon the award factors enumerated below: Associated Fiscal Costs Rental Rental rates for basic term of lease. Evaluated using present value methodology by application of she present value discount rate of 8.74%. 2/ (Weighting: 35 minimum) Rental rates for optional renewal terms of lease. Rates proposed are within projected budgeting restraints of the Department. (Weighting: 5 minimum) Total for rental shall be not less than 40. Moving Costs: a) Cost of relocating communications network computer drop lines as determined by a site survey conducted at each proposed facility by the Department's management information office, or: (Weighting: 5 maximum) b) Cost of relocation of major statewide operational data system as determined by a site survey conducted at each proposed facility by qualified data center management. (Weighting: 6 maximum) Telephone costs as determined by a site survey conducted at each proposed facility by an engineer from the applicable deregulated vendor. (Weighting: 5 maximum) Relocation of furniture and equipment not addressed above. (Weighting: 5 maximum) LOCATION The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on the efficient and economical conduct of Departmental operations planned for the requested space. Proximity of facility to a preferred area, such as a courthouse or main traffic arteries. (Will not be applicable if there are no preferred areas within the bid boundaries). (Weighting: 5 maximum) Frequency and availability of satisfactory public transportation near the offered space. (Weighting: 5 maximum) Proximity of offered space to the clients to be served by the Department at this facility. (Weighting: 5 maximum) Aesthetics of the building, property the building site [is] on, and of the surrounding neighborhood. (Weighting: 1 maximum) Security issues posed by building and surrounding neighborhood. (Weighting: 1 maximum) PROPERTY Susceptibility of the property's design to efficient layout and good utilization, such as ability of physical structure to house large units together and in close proximity to interdependent units. (Weighting: 15 maximum) Suitability of the building, parking area and property as a whole for future expansion. (Weighting: 5 maximum) Provision 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 buildings are immediately adjacent to or within 100 yards of each other. If in separate buildings, the structures are connected by enclosed climate controlled walkways. (Weighting: 2 maximum) Prospective bidders were instructed on page B-3 of the ITB that they had to submit their bids on the 22-page Bid Submittal Form, which comprised Section C of the ITB. The Bid Submittal Form (BSF) provided detailed information regarding the needs of the Department and the terms, conditions and requirements that prospective bidders were expected to meet. Among the requirements addressed was that the proposed space be an "existing building," meaning that it was "dry, fully enclosed, and capable of being physically measured." The BSF further indicated that a multistory building would be acceptable, provided that it met certain specified requirements. In addition, pages C-3 through 4 of the BSF informed prospective bidders that, as part of their bid submittal, they would have to provide, among other things, the following: * * * b. A scaled (1/16" or 1/8" or 1/4" 1'0") floor plan showing present configurations with measurements. The final floor plan will be described in the specifications. * * * A scaled site layout showing present location of building(s), location, configuration and number of parking spaces assigned to the Department, access and egress routes and proposed changes. This is to be drawn to scale. Final site layout will be a joint effort between Department and Lessor so as to best meet the needs of the Department. The subject of floor plans was also discussed on page C-11 of the ITB, which provided in pertinent part as follows: Final floor plans will be a joint effort of Departmental staff and the successful bidder. The successful bidder is to provide architectural services by a licensed architect to prepare renovation plans. The final floor plan is subject to Departmental determination and State Fire Marshal review and approval. 3/ Prospective bidders were issued the following advisement and warning on page B-8 of the ITB regarding their protest rights: Any person may dispute any part of the competitive bid process through the filing of a protest. To be considered, a protest must be filed in accordance with Section 120.53(5), Florida Statutes, and Chapter 10-13.11 Florida Administrative Code. Failure to file a protest within the prescribed time limits shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. Prospective bidders, who did not want to file a protest, but merely desired clarification regarding a matter relating to the bidding process, were directed, on page B-3 of the ITB, to follow the following procedure: Any questions concerning an interpretation of meaning, ambiguity, or inconsistency on this project are to be received in writing by the project contact person listed on page A-1 [Steven Young) at least 5 working days prior to bid opening so that a written response may be provided to all bidders. 4/ The mandatory pre-proposal conference on the ITB was held as scheduled on April 5, 1991. Petitioner/Intervenor Schlitt, Petitioner/Intervenor Hedin, and Intervenor 1436 Building, Inc. (hereinafter referred to as "`1436") appeared in person or through a representative at the conference. One other prospective bidder, Alan Taylor, was also in attendance. Among the topics discussed at the pre-proposal conference was the present value index discount rate that would be applied in evaluating proposals. The prospective bidders were advised that the rate which appeared on page C-21 of the ITB-- 7.73%--, not the 8.74% rate appearing on page B-5, would be used. Prospective bidders were also told at the pre- proposal conference that the maximum number of total points available for moving costs was not 15 or 16 as a reading of the ITB might suggest, but 21: 5 for item 1)a) (computer drop lines);6 for item 1)b) (statewide operational data system equipment); 5 for item 2 (telephones); and 5 for item 3 (furniture and other equipment). Under the ITB, as originally issued and clarified at the pre-proposal conference (hereinafter referred to as the "Original ITB"), Respondent was to pay its own moving costs, as it had consistently done in the past, without any contribution on the part of the successful bidder and it would award points to each bidder for moving costs based upon what it would cost Respondent, according to its estimates, to relocate computer drop lines, statewide operational data system equipment, telephones, and furniture and other equipment to the facility proposed by that bidder. The less the expense to the Department to relocate these items, the more points a bidder would receive. Accordingly, to the extent that he intended to offer space already occupied by Respondent, Petitioner/Intervenor Hedin had an advantage over the other prospective bidders under the Original ITB. Some time after the pre-proposal conference, David Feldman, 1436's representative, complained to Respondent about this advantage enjoyed by Hedin in the category of moving costs and inquired if anything could be done about it. Steven Gertel, the Respondent's Assistant Staff Director for Facilities Services, Kevin McAloon, the General Services Manager for Respondent's District IX, Louis Consagra, the then Office Operations Manager for General Services for District IX, and Steven Young, the Facilities Services Manager for District IX and the contact person referenced in the ITB, discussed the matter during a telephone conference call held on April 11, 1991. During their discussion, it was decided that it would be in the best interest of the Department, which was operating under severe fiscal constraints, to change the ITB to allow prospective bidders to essentially buy points by agreeing to pay all or a portion of Respondent's estimated moving costs. Such a change, it was thought, would enhance the competitiveness of the bidding process. Before making the change, however, Respondent attempted to quickly estimate what its costs would be if it had to relocate computer drop lines, statewide operational data system equipment, telephones, and furniture and other equipment to another facility in Indian River County within the geographical boundaries prescribed in the ITB. Respondent estimated that it would cost between $25,000 and $30,000 to relocate computer drop lines and statewide operational data system equipment, $35,000 to $45,000 to relocate telephones and $8,000 to $10,000 to relocate furniture and other equipment. In arriving at these estimates, Respondent relied upon agency personnel who, because of their experience, expertise and/or access to contracts with vendors and other pertinent documents, appeared to be reliable sources of information. On April 12, 1991, the day after the telephone conference call and twelve days before the scheduled bid opening, Facilities Services Manager Young, on behalf of the Department, sent by United States Certified Mail, return receipt requested, to all four prospective bidders who attended the mandatory pre- proposal conference on April 5, 1991, the following memorandum: Page C-22 of the Bid Submittal Form has been changed and is enclosed for use in the Invitation to Bid. Please call me if you have any questions on this change/addition or any information that is needed to complete your Bid Submittal on or before 3:30 p.m., April 24, 1991. The "changed" page C-22 of the ITB, which accompanied the foregoing memorandum, provided as follows with respect to moving costs: The bidder will respond to the items as stated in the Bid submittal,, Page B-6, b. Moving Costs: 1) a) b), 2), 3). Department Bidder Estimate Response 1) a) b) $25,000 to $30,000 2) $35,000 to $45,000 3) $8,000 to $10,000 Young also telephoned each of the four prospective bidders and explained to them how moving costs would be evaluated in light of this revision to the ITB. He told them that if they indicated under "Bidder Response" on page C-22 that they would be willing to pay up to $30,000 for item 1, $45,000 for item 2 and $10,000 for item 3, and in Hedin's case, provided he submitted a bid that included the 12,000 square feet of space presently occupied by Respondent, 28% of these amounts, they would capture the maximum number of points available for each of these items, and that if they indicated a willingness to contribute less than these amounts, they would be awarded points in proportion to amount of their proposed contribution. 5/ Respondent's decision to allow Hedin to earn the same amount of points as the other prospective bidders for moving costs by pledging to contribute only 28% of what his competitors had to pledge was based upon square footage considerations. If a bidder other than Hedin was awarded the lease, Respondent would have to move into more than 17,000 square feet of space. If, on the other hand, Hedin submitted a bid that included the 12,000 square feet of space presently occupied by Respondent and he was the successful bidder, Respondents would be occupying only 5,000 or so square feet of space it had not previously occupied, or approximately 28% of the square footage that it would have to move into if the lease had been awarded to another bidder. The ITB, as so revised and clarified by Respondent (hereinafter referred to as the "Revised ITB"), contemplated that the successful bidder would be obligated to pay only Respondent's actual moving costs up to the amounts pledged on page C-22 of the bidder's completed BSF. Moving costs in excess of the amounts pledged by the successful bidder would be borne by Respondent. Respondent wanted to avoid a situation where, because of Respondent's estimating errors, a successful bidder: was forced to bear a cost in connection with its bid that it did not anticipate at the time it had submitted the bid. Respondent, however, was quite confident that the estimates it had made and incorporated in the Revised ITB would not prove to be too low. 6/ All four of the prospective bidders who participated in the mandatory pre-proposal conference submitted timely bids. Each of bids was deemed to be responsive. Facility Services Manager Young then performed the calculations necessary to determine the number of points that each bidder should be awarded for associated fiscal costs, including rental costs and moving costs. This was purely an objective and non-judgmental exercise. Young performed these calculations in accordance with the methodology that had been described to all of the bidders prior to the submission of their bids. Schlitt had the lowest rental rates for the basic term of the lease, as well as for the five option years. Accordingly, he was awarded the maximum 35 points for the former and the maximum 5 points for the latter, for a total of 40 points. The scores received by the other bidders for rental costs were as follows: 1436- basic term: 34.125, and option years: 4.340; Hedin- basic term: 28.865, and option years: 3.710; and Taylor- basic term: 31.938, and option years: 4.575. Schlitt and 1436 indicated on page C-22 of their completed BSFs that they were each willing to pay up to $30,000 for the relocation of computer drop lines and statewide operational data system equipment, up to $45,000 for the relocation of telephones and up to $10,000 for the relocation of furniture and other equipment. Accordingly, they were both awarded the maximum 21 points for moving costs. Hedin indicated on page C-22 of his completed BSF that he was willing to pay up to 28% of these amounts ($8,400.00 for the relocation of computer drop lines and statewide operational data system equipment, $12,600 for the relocation of telephones and $2,800 for the relocation of furniture and other equipment). Accordingly, he too was awarded the maximum 21 points for moving costs. Taylor, who indicated on page C-22 of his completed BSF a willingness to contribute only a small fraction of the Respondent's estimated moving costs, received a total of 1.667 points for moving costs. After computing these scores 7/ Young prepared a written synopsis of all four bids that had been submitted. He gave copies of his synopsis to the four members of the bid evaluation committee, along with score sheets for them to use in their evaluation of these bids. Typed in on each score sheet were the scores the bidders had received for rental costs and moving costs. These scores were accurately reported on the score sheets except for the score that Hedin had been awarded for rental costs associated with the basic term of the lease. The score sheets erroneously indicated that Hedin had been awarded 32.375 points, rather than 28.665 points, for this item. The four members of the bid evaluation committee were: General Services Manager McAloon; Frank Mueller, District IX's chief financial officer; and Kathy Pelaez and Alfred Swanson, two HRS administrators who supervise staff headquartered in Respondent's Indian River County client service center. 8/ Young, because he was the Facilities Services Manager, was prohibited by agency practice 9/ from serving on the bid evaluation committee. The bid evaluations committee visited each of the bidder's proposed facilities before determining the amount of points to award them for the non- economic categories, i.e., location and property, set forth in the Revised ITB. The committee members visited Schlitt's, 1436's and Taylor's proposed facilities on the same day. They subsequently paid a visit to Hedin's proposed property, which consisted of the building presently occupied by Respondent, plus an addition of approximately 5,000 square feet connected to the existing building by a walkway. The delay in visiting Hedin's proposed facility was the result of a determination, later overturned, that the entire facility was not dry and measurable as required by the Revised ITB. Following their visits to Schlitt's, 1436's and Taylor's proposed facilities, the members of the bid evaluation committee met as a group and discussed each of these proposed facilities. They had a similar meeting and discussion about Hedin's proposed facility after their visit to that proposed facility. Applying the criteria set forth in the Revised ITB, the committee members agreed that the following point awards should be made for the categories of location and property: location/proximity to preferred area (evaluation criterion 2.a., 5 point maximum)- Schlitt: 3, 1436: 2, Hedin: 5, and Taylor: 1; location/public transportation (evaluation criterion 2.b., 5 point maximum)- all four bidders: 0; location/proximity to clients (evaluation criterion 2.c., 5 point maximum)- Schlitt: 3, 1436: 2, Hedin: 5, and Taylor: 1; location/aesthetics (evaluation criterion 2.d., 1 point maximum): Schlitt, 1436, and Hedin: 1, and Taylor: 0; location/security (evaluation criterion 2.e., 1 point maximum)- all bidders: 1; property/design (evaluation criterion 3.a., 15 point maximum)- Schlitt: 9, 1436: 15, Hedin: 14, and Taylor 10; property/future expansion (evaluation criterion 3.b., 5 point maximum): Schlitt: 4, 1436: 5, Hedin 3.5, and Taylor 3, and property/square footage in single building (evaluation criterion 3.c., 2 point maximum)- Schlitt, 1436, and Taylor: 2, and Hedin: 1. Each of the members of the evaluation committee then recorded these scores on their individual score sheets. Although they agreed to each award the same number of points, evaluation committee members were free to do otherwise. They were not subjects to any threats or coercion. The members of the evaluation committee made a good faith effort to fairly base their point awards on the evaluation criteria for the categories of location and property prescribed in the Revised ITB. For instance, they awarded Schlitt only nine out of a possible 15 points for property/design because of their reasonable concerns that the space he offered, which was located in a multistory building which would have other tenants in addition to the Department, would not be able to house large units together and in close proximity to interdependent units. The committee members did not have similar concerns about the space offered by 1436. Accordingly, they awarded 1436 the maximum 15 points for this category. The points awarded by the evaluation committee for location and property were added to the points the bidders had previously received for rental and moving costs to obtain a total point award for each bidder. The; results were as follows: 1436- 87.465 total points; Schlitt- 84 total points; Hedin- 83.875 total points; and Taylor- 56.18 total points. 1436's bid was therefore the "lowest and best bid," as defined on page B-1 of he Revised ITB. Consistent with the Revised ITB's pronouncement that "[t]he successful bid will be that determined to be the lowest and best," the evaluation committee recommended to the District IX Administrator that 1436 be awarded Lease No. 590:2241. General Services Manager McAloon, in his capacity as chairman of the evaluation committee, provided the District IX Administrator with a written justification for the committee's recommendation. 10/ The committee's recommendation, as well as its written justification, were adopted by the District IX Administrator, who, by letter dated October 3, 1991, to 1436, gave notice of the Department's intention to award 1436 Lease No. 590:2241. Copies of this letter were sent to all bidders. The Department's preliminary decision to award the lease to 1436 was the product of, not any fraudulent, arbitrary, capricious or unlawful conduct on the Department's part, but rather the honest exercise of the agency's discretion. After receiving their copies of the District IX Administrator's October 3, 1991, letter to 1436, Schlitt and Hedin filed protests and initiated the instant proceedings.
Recommendation Based upon 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 awarding Lease No. 590:2241 to 1436 over the protests of Schlitt and Hedin. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of February, 1992. STUART M. LERNER Heading 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 February, 1992.
The Issue Whether Respondent's determination that the bid submitted by Petitioner was non-responsive, was arbitrary, capricious, or beyond Respondent's scope of discretion as a state agency.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the formal hearing, the following relevant facts are made: A. Background The Department issued a Request For Proposal and Bid Submittal Form (BID) for a full service lease, Lease Number 700:0556, seeking to rent office space in an existing facility located in Polk County, Florida. Responses to the BID were to be filed with the Department by 10:00 a.m. on June 12, 1990. Six proposals were timely submitted in response to the BID, including McCarty's and Fearn's proposal. The Department evaluated the six proposals and made site visits to the properties proposed to be leased. The McCarty proposal received the highest evaluation score of 95.4 points, while the Fearn proposal received the second highest evaluation score of 92.6 points. Because the McCarty proposal had been found responsive to the BID and received the highest evaluation score, the Department awarded the lease contract for Lease No. 700:0556 to McCarty. Fearn filed a timely protest challenging the award to McCarty. The Fearn protest was referred to the Division of Administrative Hearings for hearing. However, after the protest was referred to the Division of Administrative Hearings but before McCarty could intervene or a hearing could be held, the Department reviewed the McCarty proposal and found it to be non- responsive. The Department determined that the McCarty proposal was non-responsive because the McCarty proposal was for more space than authorized by the BID and that not all owners of the property proposed to be leased signed the BID. After determining that the McCarty proposal was non-responsive, the Department rejected the McCarty proposal and awarded the lease contract for Lease No. 700:0556 to Fearn. Upon Fearn withdrawing its protest, the Division of Administrative Hearings closed its file by relinquishing jurisdiction to the Department and the Department entered a Final Order dismissing the Fearn protest. By letter dated July 31, 1990, the Department advised McCarty of its decision to reject his proposal as non- responsive and award the bid to Fearn. By this same letter, the Department advised McCarty of his right to file a protest and his right to a formal administrative hearing. B. Lease Space Requirement Prior to issuing the BID the Department submitted to the Department of General Services (DGS) a Request For Prior Approval of Space Need (BPM Form 4405) wherein the Department justified, through a Letter of Agency Staffing, the need for 3,108 square feet of office space to be located in an existing facility in Auburndale, Polk County, Florida. However, the Department requested approval of only 3,017 net square feet. DGS approved the request for 3,017 net square feet of space and the Department issued the BID referred to in Finding of Fact l. The BID requested bidders to submit proposals to lease 3,017 square feet (plus or minus 3%) measured in accordance with Standard Method of Space Measurement and advised the bidder that the space offered must be within the plus or minus three percent required. The maximum square footage requested by the BID was 3,108 square feet (3017 + 3%). The McCarty proposal was for 3,150 square feet or 42 square feet over the maximum requested. The Department was aware of, and considered, the square feet of rental space proposed by each response to the BID in the initial evaluation since it rejected two proposals for exceeding this requirement by 145 and 392 square feet, respectively. The Department apparently considered the excess 42 square feet of space in the McCarty proposal in its initial evaluation but through an oversight failed to reject the McCarty proposal as it had in the other two proposals. Upon the Fearn protest being filed the Department's legal office reviewed the McCarty proposal and determined that the excess 42 square feet of space was a deviation that should not have been waived. At this point, the McCarty proposal was found to be non-responsive. The price per square foot of the McCarty proposal in all years, one through five, was less than the Fearn proposal. The total price of the lease in the McCarty proposal, including the excess 42 square feet, in all years, one through five, was less than the Fearn proposal. There was no evidence that the cost of the McCarty proposal would exceed the amount budgeted by the Department for this lease. C. Signature of Owner(s) and Transfer of Ownership Requirements. At the time McCarty signed and submitted the BID he was co-owner of the property bid with Adrian Gabaldon. Gabaldon was aware that McCarty was offering the property in question for lease to the Department having witnessed McCarty's signature on the BID and having been involved with the Department personnel concerning the BID. Section D. 4. A, General Provision, page 8 of the BID provides in pertinent part: Each proposal shall be signed by the owner,(s), corporate officer(s), or legal representative(s). The corporate, trade, or partnership title must be either stamped or typewritten beside the actual signature(s). If the Bid Submittal is signed by an agent, written evidence from the owner of record of his/her authority must accompany the proposal McCarty's signature was the only signature, as owner, appearing on the McCarty proposal. Below McCarty's signature the word "owner" was handwritten. Gabaldon signed the McCarty proposal as a witness to McCarty's signature and not as an owner. There is insufficient evidence to establish that at the time McCarty submitted his proposal the property bid was owned by a partnership consisting of McCarty and Gabaldon. There is no printed or typewritten partnership name in the vicinity of McCarty's signature in his proposal or anywhere else in his proposal. Sometime between the date McCarty submitted his BID and the date of the hearing, Gabaldon transferred his interest in the property bid to McCarty. D. General By signing the BID, McCarty agreed to comply with all terms and conditions of the BID and certified his understanding of those terms and conditions. In accordance with Section D.10., General Provisions, page 9 of the BID, all question concerning the specifications were to be directed to C. Donald Waldron. And, although McCarty or Gabaldon may have discussed the space requirement and other matters with certain employees of the Department, they knew, or should have known, that these questions should have been directed to Waldron. Otherwise, the answer could not be relied upon. Neither McCarty or Gabaldon ever contacted Waldron concerning the terms, conditions or specifications of the BID and, more specifically, concerning the space requirement or who was required to sign the BID. Submitted with the Fearn proposal was a letter from Entrepreneur of Tampa as owner of the property bid in the Fearn proposal appointing David Fearn, CCIM and The Fearn Partnership, Inc. as its agent to submit a proposal on behalf of Entrepreneur of Tampa.
Recommendation Pursuant to notice, the Division of Administrative Hearings by its duly designated Hearing Officer, William R. Cave, held a formal hearing in the above- captioned case on October 16, 1990 in Tampa, Florida.
Findings Of Fact In August, 1975, the Department of General Services invited competitive bids for the purchase of supervisory and control equipment and revenue metering equipment for expansion of primary electric utilities in the Capitol Center, a project known as State Project No. DGS-6026/6424, AEP File No. 74288-003. Plans and specifications for the project were developed by the department's consulting architect/engineers Reynolds, Smith and Hills. The Department of General Services (hereinafter Department) and Reynolds, Smith and Hills (hereinafter Reynolds) conducted formal bid opening on September 25, 1975. Bid proposals were received from petitioner, Weston Instruments, Inc. (hereinafter Weston), and from Respondents, Harris Corporation (hereinafter Harris) and Hathaway Instruments, Inc. (hereinafter Hathaway). The amount of the bids were as follows: CONTRACTOR BASE BID ALTERNATE NO. 1-ADD TOTAL Harris 332,000.00 28,649.00 360,649.00 Weston 338,991.00 20,965.00 359,996.00 Hathaway 343,429.00 33,224.00 376,653.00 Hathaway's bid as submitted was responsive to the specifications and other requirements of the bid invitation. Weston's bid was responsive to the specifications and requirements of the bid invitation with the following exception. Specification B-2, in its second paragraph, states: "In order to facilitate the execution of the Agreement, the Bidder shall submit with his proposal a list of and brief description of similar work satisfactorily completed, with location, date of contracts, together with names and addresses of Owners." Weston did not submit that information with its bid but did submit that information on October 9, 1975. The Harris bid as submitted was not responsive to the specifications and requirements of the bid invitation. The material deviations from the specifications found in the Harris bid are as follows: Paragraph 16755-13(c) of the specifications states that data logger equipment by Teletype, Lear Siegler or General Electric will be considered. The Harris bid proposed a data logger manufactured by Practical Automation, Inc. and noted that if Harris was required to conform to the specifications by furnishing a data logger manufactured by one of the three specified manufacturers, its base bid would have to be increased by $635.00. Paragraph 16755-18 of the specifications requires a specific number of supervisory functions at each of the nineteen locations. The Harris bid met the requirements of the specifications at only one of the nineteen locations. At each of the other eighteen locations the Harris bid was from one to three supervisory points deficient. According to the evidence presented it would cost between $250 to $300 per location to furnish the supervisory points left out of Harris' bid. Paragraph 16755-13(d) of the specifications requires that the data logger shall log an uninitiated (alarm) change of status in red lettering. Harris' bid states that the equipment they have chosen is not available with red ribbon printout and that they therefore propose that all changes normally logged in red would instead have an asterisk in the first column. This specification requiring logging in red of an alarm change of status was included by the specifications writer of the architect/engineers as a safety feature. Paragraph 16755-13(e) of the specifications requires that the log shall contain time in a 24 hour format to a tenth of a minute. The Harris bid proposes that the log shall be in seconds rather than tenths of a minute. The specifications require equipment delivery to the job site and substantial completion within 180 calendar days after receipt of Notice To Proceed. The specifications further provide for liquidated damages of $100 per day for each day the contractor fails to meet the above completion date. The Harris bid requested that the liquidated damages clause and the required time for completion be modified to provice that the 180 day period would not commence until all drawings had been approved by the architect/engineers. The architect/engineers, Reynolds, Smith and Hills, calculated that the required drawing time was approximately 60 days. Therefore, the Harris bid proposes that Harris would have 240 days instead of 180 days in which to deliver the equipment to the site and substantially complete the contract. The Harris bid proposed a deviation from the warranty provision of the specifications. The specifications in paragraph E-17 placed the final determination of the need for repairs or changes under the guarantee clause of the specifications with the architect/engineers and the owner. Harris proposes to alter those specifications and place the right of final determination as to the existence and cause of any claim defect with Harris. Harris' bid contained information setting forth their experience with the Micro II System, which is the system they proposed in their bid. That information shows that the Micro II System had been in use no more than two and one-half years at the time of the bid letting. In its evaluation of the bidders' proposals, based upon the data contained in the original bid packages, Reynolds calculated that the deviation from the specifications by Harris gave Harris at least a $10,135 advantage in its bidding (See Petitioner's Exhibit 8). That evaluation did not include a dollar value for the deviation from the specification concerning the warranty. In that evaluation Reynolds noted the failure of Harris to meet the supervisory point requirements. They calculated that this would add $3,900 to Harris' bid based on twelve locations at $300 per location. In fact, Harris failed to meet the requirements at eighteen locations, which at $300 per location, would add $5,400 to Harris' bid. Thus, using the evaluation figures of Reynolds, it appears that Harris' deviations from the specifications gave them at least an $11,635 advantage in the bidding. On October 9, 1975, Reynolds held a conference with each of the three bidders. At that conference Weston provided a list of three names, with addresses of customers for whom Weston had completed work similar to that proposed in its bid. Reynolds did not receive any material information from these references until after October 31, 1975. At least two of the references commented favorably on Weston's performance in letters to Reynolds dated January 13, 1976 and January 20, 1976, respectively. By letter dated October 31, 1975, Reynolds' project manager for this project conveyed the architect/engineers' recommendation for award to the Department. That recommendation was that the contract be awarded to Hathaway Instruments, Inc., for the base bid item only. The recommendation noted that the alternate should be rejected because the bids for the alternate were excessively high. As stated in the letter of recommendation, Reynolds rejected Harris' bid because "there were several major exceptions taken to the specification (sic), the most serious of which was their not being able to meet the delivery schedule." Also, as stated in the letter of recommendation, Weston's bid was apparently rejected because they "could not meet the experience qualifications as specified." Harris, at the time of the bid letting, had five years experience with its Micro I equipment but had only two and one-half years experience with its Micro II equipment. The two lines of equipment constitute two generations of equipment. Neither Harris nor Weston had five years experience with the specific equipment proposed in their bids. Both, however, have had five years experience with the general type system and equipment proposed with Harris being the more experienced of the two. Based upon the evidence presented Weston and Harris are both responsible bidders. In November, 1975, the Department directed Reynolds to contact Harris and determine whether Harris would conform their bid to the specifications. The project manager for Reynolds so contacted Harris and by letter dated November 17, 1975 (Petitioner's Exhibit 4), notified the Department that Harris stated they would deliver the equipment within the time required by the specifications. That letter reiterated Reynolds' recommendation of Hathaway as contained in their letter of October 31, 1975. Reynolds did not retreat from their recommendation of Hathaway and at the final hearing again stated that recommendation. Thereafter, the Department proposed to award the contract to Harris and set the matter for final decision on December 2, 1975. Harris' bid was a responsible offer but was not in full compliance with the bid specifications and conditions. The bids of Weston and Hathaway were responsible offers and were in full compliance with the bid specifications and conditions except as noted in paragraphs 4, 7 and 19 herein. Paragraph B-18 of the Specifications and Contract Documents (Petitioner's Exhibit 1) states that "No bid modification will be accepted after the close of bidding has been announced." Section A of the same document states that bids would be received until 2:00 p.m. EDST, on September 25, 1975. No evidence was presented which would show that the time for receiving bids was extended beyond that set forth above. Therefore, the close of bidding appears to have been at 2:00 p.m., EDST, September 25, 1975. The agreement by Harris to conform their bid to the specifications and conditions constituted a material modification of their bid. This modification occurred in November, 1975, after the close of bidding, and was therefore not allowable under the terms of the Specifications and Contract Documents set forth above. The lowest base bid and alternate bid of those responsible offers received in full compliance with the bid specifications and conditions was that of Weston. No evidence was presented which would show that the Department submitted its complete File on this matter to the Division of Purchasing along with its reasons for recommending a bid other than the low bid meeting specifications, as required by Section 13A-1.02(a), F.A.C.
Findings Of Fact Respondent solicited contractors to replace a chiller in Building #45 at its Sunland facility located in Marianna, Florida. The project number for the replacement was HRS-95203000. The vendors were allowed until 10:00 a.m., Central Daylight Time, August 24, 1995, to submit responses to the request for bids. On August 24, 1995, Respondent received four responses. The responses were from Petitioner, Neel, JLS International and Smiths, Inc. On August 24, 1995, when the bids were opened JLS International and Smiths, Inc. were disqualified as nonresponsive bidders. On August 24, 1995, Respondent determined that Petitioner had submitted a base bid in the amount of $141,185.00 and as described on the tabulation form, an alternate bid in the amount of $14,750.00 for confined space compliance. The Neel bid as reflected on the tabulation was a base bid for $142,000.00. The forms upon which Petitioner and Neel had submitted their bid prices were forms identical in their format. The format was required by the Respondent. The Petitioner's bid stated: Base Bid: $141,185.00 With foregoing as a Base Bid the following costs of alternate proposals are submitted in accordance with the drawings and specifi- cations. Alternate No. 1 Add or Deduct $ N/A Alternate No. 2 Add of Deduct $ Alternate No. 3 Add or Deduct $ If more or less work is required than that qualified by the specifications and drawings the following unit prices shall be applicable. *If Required (not included in base bid) ITEM UNIT PRICE Compliance for confined space for refrigerants & equipment *Note: Base bid price is compiled costs for construction duration & equipment delivery of 18 weeks. When Petitioner submitted its response to the request for bids, it offered no further explanation concerning the $14,750.00 price for "compliance for confined space for refrigerants and equipment" than has already been described. The Neel bid stated: Base Bid: $142,000.00 With foregoing as a Base Bid the following costs of alternate proposals are submitted in accordance with the drawings and specifications. Alternate No. 1 Add or Deduct $ Alternate No. 2 Add of Deduct $ Alternate No. 3 Add or Deduct $ If more or less work is required than that qualified by the specifications and drawings the following unit prices shall be applicable. ITEM UNIT PRICE Respondent had provided written instructions to the bidders concerning execution of the bid proposal form to the effect: Omit mention of alternates entirely, if there are none. Unit prices are to be used only if unit prices are applicable and approved by the Project Director. This project did not call for alternate bids or unit prices. The request for bids did not contemplate a quotation other than the base bid for all items, to include any costs associated with implementation of a design that complies with all applicable codes associated with the installation and with any laws pertaining to refrigerant handling. Posting of the bid evaluation/tabulation and notice of contract award recommendation was given on September 8, 1995, indicating Respondent's intent to award to Petitioner in the amount of $141,185.00 as the base bid for the project. Prior to the posting of the bids on September 8, 1995, as was customary, Thomas McAuley, an account representative for Petitioner, who had submitted Petitioner's bid response had met with Respondent's project manager Glen Jenkins, a Professional Engineer III. The meeting was held to discuss Petitioner's bid response as the apparent responsive lowest and best bidder. In the conversation held between Messrs. McAuley and Jenkins, they did not discuss the $14,750.00 separate price quotation in the Petitioner's bid. They did discuss compliance with the codes that were going to be applicable to the project and whether the base price quotation took into account the code requirements. McAuley indicated his opinion that the base price quotation did account for compliance with code requirements contemplated by the terms in the request for bids. McAuley was specifically asked whether Petitioner was complete and thorough in its compliance with the bid specifications and in its prices, inclusive of all the items that were going to be mandated by the State of Florida, Department of Management Services. McAuley answered that question in the affirmative. In the specifications, under Article 7, Miscellaneous Provisions, within the request for bids is set forth Sections 7.2, 7.3 and 7.4 related to permit and code compliance issues, which state as follows: State Building Permit. Current DMS requirements for state building permit applications and for permit inspections are attached. It shall be the Contractor's responsibility to apply for and pay all costs associated with the state building permit (including the cost of preparing any permit documents on which the state building official may require the seal of a registered engineer). It shall further be the Contractor's responsi- bility to comply fully with all permit inspection requirements. Code Compliance. It is the Contractor's responsibility to implement a design complying with all codes applicable to this installation, and with all laws pertaining to refrigerant handling. Neither the Owner nor the Project Manager shall be held responsible for stating or setting forth (in this or any other document, or verbally) any code requirement which may be applicable to this project. By disseminating this "Statement of Work Scope and Contractual Conditions", the Owner merely sets forth minimum acceptance criteria for materials and workmanship, and neither the Owner nor the Project Manager shall thereby be held liable, in full or in part, for the Contractor's adherence or non-adherence to any governing code and/or legal requirement. Special Terms and Conditions for Cont- racts Under the National Energy Conservation Policy Act. Due to partial project funding under a federal NECPA grant, Contractor compliance with federal laws and regulations are a special requirement of this project. Special terms and conditions pertaining to wages and payrolls, records retention and access, apprenticeship and training, equal opportunity access, are set forth in the attached "Special Terms and Conditions for Contracts Under the National Energy Conserva- tion Policy Act". The contractor shall responsible for full compliance with the attached special terms and conditions. In the meeting between McAuley and Jenkins discussion was made concerning compliance with pertinent electrical codes. One question was asked about pipes in the system being installed in a manner to allow variable speed drives to be placed above the pipes. Jenkins considered that speed drive placement underneath the pipes would be contrary to code requirements. Related to the mechanical features in the project there was discussion about the provision of refrigerants in compliance with the mechanical code that pertained. In the meeting there was little discussion about code compliance within confined spaces, because the two individuals did not perceive that there would likely be a code requirement concerning confined spaces. Mention was made that some code inspector or code official who came to the job site might require attention to the confined spaces, even though that requirement was not found in the code. According to Jenkins, in his recount of the meeting with McAuley, if a code official required compliance for an item in the confined spaces that was not set forth in the code, that would constitute an item about which the Respondent had not requested information to be included in the base price quotation offered by the Petitioner. Further, Jenkins stated there would not be a problem for failing to offer a quotation for the features required by the inspector, because it was not sought by the Respondent in designing the bid requirements. As Jenkins describes, Petitioner's unit price for that work had been made known. This is taken to refer to the $14,750.00 quote for compliance for confined space for refrigerants and equipment. In that circumstance, Mr. Jenkins told Mr. McAuley that if a code official required something that was not contemplated by the code and the Respondent did not consider it worth fighting over, then Respondent would have to process a change order to install that equipment. This is taken to mean that Petitioner would be paid additional money under a change order for installing the equipment in the event that the Respondent did not choose to contest the decision of the code official. At the time that McAuley and Jenkins had the meeting, counsel for Neel had contacted Jenkins about protesting the decision to award the contract to Petitioner. That individual had stated the opinion to Respondent that Petitioner's discussion of confined space for refrigerants and the equipment at the additional cost of $14,750.00 might be perceived as potentially a code exclusion in violation of the requirements of Section 7.3 to the request for bids. Neel's counsel stated his belief that the vendors were expected to be in compliance with all codes and laws, even if it was not known to be a code requirement at the time the bid was submitted. He was concerned that someone might try and make it a requirement in the future. The Neel attorney explained that the reference to compliance for confined space for refrigerants and equipment set forth in Petitioner's bid response might be construed as a comment on code requirements through the contingency of someone's interpretation of the code. He believed that the responses to the request for bids needed to address that contingency as part of the basic quotation, not as a separate quotation. At the time McAuley and Jenkins had their meeting, Jenkins did not know of any requirement for compliance for confined space for refrigerants and equipment based upon his experience, but he had not researched the issue. Through information which Neel imparted to Mr. Jenkins before the meeting was held between Jenkins and McAuley, the Neel attorney expressed the opinion that there was not a present code requirement for compliance for confined space for refrigerants and equipment, a view held by McAuley and Jenkins. At the time the meeting was held between McAuley and Jenkins, Jenkins was of the opinion that the requirement for compliance for confined space for refrigerants and equipment was not foreseen to be a likely code requirement. As contrasted with Neel's view, as explained to Jenkins, that its base bid was intended to cover the eventuality that there might become a requirement for compliance for confined space for refrigerants and equipment, Neel's representative stated that Petitioner's bid had segregated that contingency for consideration by quoting the price of $14,750.00 separately. Neel did not appear at the hearing and there was no direct proof that the $142,000.00 base bid by Neel addressed the contingency that a future requirement might be imposed for compliance for confined space for refrigerants and equipment. However, it may properly be assumed the Neel bid met the requirement for a base bid quotation to cover all costs to Respondent absent proof to the contrary. Later, when Respondent decided to award the contract to Neel, Respondent implied that the $142,000.00 base bid would meet code requirements contemplated by Section 7.3. Concerning the responsibility to determine which code requirements pertained and when, Respondent expected the vendors to derive that answer. This case was unlike most projects by the Respondent in which design professionals, engineers or architects create design documents that are completed in view of code requirements and the vendors assume that the bid documents prepared would be in conformance with code requirements. At hearing Mr. Jenkins, as project manager, opined that Section 7.3 obligated the contractor to meet existing requirements of the permitting authorities, and if during the pendency of the contract there was some change to the codes or code requirements set forth by code inspectors, then the contractor must assume the risk. Moreover, when the bids were opened and tabulated initially and the preliminary decision was made to award the contract to Petitioner, Mr. Jenkins perceived the quotation of $14,750.00 set forth in the Petitioner's bid to be a unit price for a scope of work that was not expected to be required at any point and was not been asked for by Respondent. Jenkins considered this quote as an alternate that was being proffered, something that Respondent might opt for in the future. Although not set forth in exact terms, Mr. Jenkins perceived this information in the Petitioner's bid response to be related to an alarm system and breathing apparatuses. He held this belief based upon his experience in association with compliance for confined spaces. Mr. Jenkins surmised that what was being described by the Petitioner was the type of installation that you would put into a closed mechanical room where a refrigeration machine was located that contained toxic refrigerant, which if released might kill a serviceman. In that connection when discussing refrigerant compliance with Mr. McAuley in their meeting, Mr. Jenkins indicated that the discussion had been limited because the type of machine proposed by the Petitioner was a 134A machine which is "ozone friendly" and not restricted by clean air amendment regulations. Following the posting on September 8, 1995, which recommended that the contract be awarded to Petitioner, Neel had 72 hours to file a protest. That protest was filed. Having considered the remarks by Neel's attorney in support of that protest, Mr. Jenkins became persuaded that Petitioner might not have intended to describe an alternate (unsolicited) purchase when discussing the compliance for confined space for refrigerants and equipment for a price of $14,750.00; instead, Petitioner may have been describing how to comply with future code requirements. Consequently, Mr. Jenkins attempted to settle the issue by presenting the opportunity for the Petitioner to obtain a letter from the Department of Management Services permitting office establishing that the equipment described in the bid by Petitioner for compliance for confined space refrigerants and equipment was not then a code requirement. Mr. Jenkins wanted that information to be in writing. This opportunity to submit information was imparted to Stuart Zaritsky, Branch Manager for Petitioner in its Tallahassee office. Petitioner did not take the opportunity to send written information concerning the compliance for confined space for refrigerants and equipment as not being required by applicable codes. Instead, Mr. Zaritsky called Mr. Jenkins and told him that Petitioner had placed calls to the Department of Management Services permitting office and was unable to get a definitive response at that time. On September 26, 1995, Mr. Zaritsky wrote to Mr. Jenkins and stated: The confined space for refrigerants and equipment compliance is based on ASHRAE recommendations only. If any of these items are required by code, then we will install it at no cost. Our base bid of $141,185 is based on the specifications, including paragraph 7.3 on page 13 and all other portions of the contract documents without any qualifications. If it is determined by the owner, that they wish to upgrade the machine room to ASHRAE 15 standards, and it is not required by code, the $14,750 would be the price to add refrigerant monitors, refrigerant purge fans and self-contained breathing apparatus. Should the jurisdictional authority of code compliance determine that these items are required by code, they will be installed as part of our base bid of $141,185. On September 29, 1995, Respondent gave notice of an amended bid tabulation finding Neel to be the responsive lowest and best bidder for the project in its quotation of $142,000.00. The September 29, 1995 correspondence notified the Petitioner that: After further review of issues raised by responsive bidders on the above project, the Department has determined that the bid sub- mitted by Natkin Service Co. on the above referenced project either: is nonresponsive, because the bid was not in compliance with Section 7.3 of the Statement of Work Scope and Contractual Conditions, since it exempted its bid from certain refrigerant handling requirements; or if responsive, is in the amount of $155,935.00. In either case, the bid submitted by Neel Mechanical Contractors, Inc. in the amount of $142,000.00 is the lowest responsive bid. The September 29, 1995 determination that Petitioner was not responsive led to Petitioner's present protest. Sometime shortly before the amended posting of the bid tabulation on September 29, 1995, Mr. Jenkins spoke to Mr. McAuley concerning the opportunity to present information to address the question concerning whether compliance for confined spaces for refrigerants and equipment was a code requirement. To assist the Petitioner Mr. Jenkins provided information which had been received from the Department of Community Affairs related to code provisions under enforcement by the Department of Management Services. This information was not provided by Mr. Jenkins as a determination of code requirements; it was provided to inform Petitioner concerning what Mr. Jenkins understood to be the latest code requirements. The expectation was still held that Petitioner would submit separate information from the Department of Management Services that would settle the issue concerning the possible need to comply with code requirements for confined spaces for refrigerants and equipment. As Mr. Jenkins described at hearing, the basis for finding the Petitioner's bid unresponsive was alternatively stated. First, the Respondent believes that Petitioner tried to avoid the responsibility for complying with code requirements, whatever they may be during the contract pendency; or second, Petitioner split its bid into two parts. One in the amount of $141,185.00 for matters unrelated to code compliance for confined space for refrigerants and equipment and the second in an amount of $14,750.00 for such compliance. If the former view is taken, Petitioner's bid is unresponsive. If the latter view is taken Petitioner's bid is responsive but exceeds the quotation by the responsive bidder Neel. At hearing it was not proven by competent evidence whether there was any necessity to meet code requirements for compliance for confined space for refrigerants and equipment as described in Petitioner's bid response at any point in time. Other provisions within the request for bids that pertain to the manner in which the vender would address its price quotation are as follows: 1.5 The Contract Sum shall initially be that lump-sum amount which the Contractor shall have enclosed in his sealed bid proposal. Subject to additions and deduc- tions by Change Order, the Contract Sum shall be the amount which the Owner shall pay the Contractor for the performance of the work, subject to the terms and conditions as provided in the Contract Documents. 2.6 The Contractor shall apply for, and pay all costs associated with, any permit which may be required by the Department of Management Services. Such permitting costs for which the Contractor shall be responsible shall include the preparation of any permit documents on which the building official may require the seal of a registered engineer. B-9 Instruction for bidders; They (the bidders) are also required to examine carefully any drawings, specifications and other bidding documents to inform themselves thoroughly regarding any and all conditions and requirements that may in any manner effect the work.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is, RECOMMENDED: That the final order be entered which dismisses Petitioner's protest based upon the unresponsive of its bid and awards the contract for Project No. HRS- 95203000 to Neel. DONE and ENTERED this 20th day of December, 1995, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of December, 1995. APPENDIX The following discussion is given concerning the proposed fact finding by the parties: Petitioner's Facts: Paragraph B1 is contrary to facts found. Paragraph B2 is rejected in the suggestion that Respondent should be bound by resort to extrinsic evidence to determine Petitioner responsive to the bid invitation. Paragraph B3 is contrary to facts found. Paragraph B4 is rejected in the suggestion that it was inappropriate to defer to the Neel protest as a means for Respondent to reconsider its position. Paragraph B5 is rejected in the suggestion that Neel has controlled the outcome in this case. Paragraph B6 is rejected in the suggestion that Petitioner has complied with the bid invitation requirements. Paragraph B7 is rejected in the suggestion that the contrary position stated by the Respondent in the informal review wherein Petitioner had been preliminarily determined to be the responsive bidder and the point of view at hearing would preclude a decision favoring the Respondent. Respondent's Facts: Paragraphs 1 through 9 are subordinate to facts found. COPIES FURNISHED: Tommy McAuley, Account Manager Natkin Service Company 3428 A. Garber Drive Tallahassee, FL 32303 Sam Chavers, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building 1, Suite 200 Tallahassee, FL 32399-0700 Robert L. Powell, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Kim Tucker, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Informational Copies: JLS International, Inc. P. O. Box 490 Foley, AL 36536 Neel Mechanical Contractors, Inc. P. O. Box 1916 Thomasville, GA 31799 Smith's, Inc. of Dothan P. O. Box 1207 Dothan, AL 36302
The Issue Whether Respondent acted contrary to the agency's governing statutes, rules, or policies or the bid specifications in its proposed decision to award Contract No. T7380 to Astaldi Construction Corporation ("Astaldi").
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, and on the entire record of the proceeding, the following Findings of Fact are made: The Department is a state agency authorized by section 337.11 to contract for the construction and maintenance of roads within the State Highway System, the State Park Road System, and roads placed under its supervision by law. The Department is specifically authorized to award contracts under section 337.11(4) to “the lowest responsible bidder.” On April 15, 2016, the Department advertised a bid solicitation for Contract T7380, seeking contractors for the widening of a 3.8 mile portion of U.S. Highway 301 in Hillsborough County from two lanes to six lanes between State Road 674 and County Road 672 and over Big Bull Frog Creek. The advertisement provided a specification package for the project and the “Standard Specifications for Road and Bridge Construction” (“Standard Specifications”) used on Department roadway projects. The work included seven components: bridge structures (Section 0001), roadway (Section 0002), signage (Section 0003), lighting (Section 0004), signalization (Section 0005), utilities (Section 0006), and intelligent transportation systems (Section 0007). The advertisement identified 666 individual items of work to be performed and quantity units for each item. The project was advertised as a low-bid contract with a budget estimate of $51,702,729. The Department’s bid proposal form contains five columns with the following headings: Line Number; Item Number and Item Description; Approximate Quantities and Units; Unit Price; and Bid Amount. The bid proposal form contains line items for the seven components of the project. The utilities component contains 42 line items, each with an Item Number and Item Description. For example, Line Number 1410 corresponds with the following Item Number and Item Description: “1050 11225 Utility Pipe, F&I, PVC, Water/Sewer, 20–40.9 [inches].” Each bidder inserts a Unit Price for the line item in the corresponding “Unit Price” column. The “Bid Amount” column for each line item is an amount generated by multiplying a bidder’s Unit Price by the Quantities (determined by the Department) for each Line Number. The Bid Amount for each Line Number is then added together to generate the “Total Bid Amount” representing the bid for the entire project. Astaldi, Prince, Hubbard, and other potential bidders attended the mandatory pre-bid meeting. Prequalified contractors were given proposal documents that allowed them to enter bids through Bid Express, the electronic bidding system used by the Department. Plan revisions were issued by addenda dated May 10, 2016, and June 7, 2016. A Question and Answer Report was published and updated as inquiries were addressed. Bids were opened on the letting date of June 15, 2016. Bids for Contract T7380 were received from Astaldi, Prince, Hubbard, the DeMoya Group (“DeMoya”), Ajax Paving Industries of Florida, LLC (“Ajax”), and Cone & Graham, Inc. (“Cone & Graham”). The bids were reviewed by the Department’s contracts administration office to ensure they were timely, included a Unit Price for each line item, and contained the completed certifications required by the specifications. Bidders were checked against the Department’s list of prequalified bidders to confirm they possessed a certification of qualification in the particular work classes identified by the bid solicitation. Each bidder’s total current work under contract with the Department was examined to ensure that award of Contract T7380 would not place the bidder over its Department-designated financial capacity limit. Astaldi submitted the lowest bid, a total amount of $48,960,013. Prince submitted the next lowest bid, a total amount of $57,792,043. Hubbard’s total bid was the third lowest at $58,572,352.66. The remaining bidders came in as follows: DeMoya, $63,511,686.16; Ajax, $68,617,978.10; and Cone & Graham, $70,383,697.74. All bidders were prequalified in the appropriate work classes and had sufficient financial capacity, in accordance with section 337.14 and Florida Administrative Code Chapter 14-22. The Department’s construction procurement procedure, from authorization to advertisement through contract execution, is outlined in the Department’s “Road and Bridge Contract Procurement” document (“Contract Procurement Procedure”). The scope statement of the Contract Procurement Procedure provides: “This procedure applies to all Contracts Administration Offices responsible for advertising, letting, awarding, and executing low bid, design-bid-build, construction, and maintenance contracts.” Limited exceptions to the procedure may be made if approved by the assistant secretary for Engineering and Operations. If federal funds are included, the Federal Highway Administration division administrator, or designee, must also approve any exceptions from the procedure. The stated objectives of the Contract Procurement Procedure are: “to standardize and clarify procedures for administering low-bid, design-bid-build, construction, and maintenance contracts” and “to provide program flexibility and more rapid response time in meeting public needs.” The Department’s process for review of bids is set forth in the “Preparation of the Authorization/Official Construction Cost Estimate and Contract Bid Review Package” (“Bid Review Procedure”). The scope statement of the Bid Review Procedure states: This procedure describes the responsibilities and activities of the District and Central Estimates Offices in preparing the authorization and official construction cost estimates and bid review packages from proposal development through the bid review process. Individuals affected by this procedure include Central and District personnel involved with estimates, specifications, design, construction, contracts administration, work program, production management, federal aid, and the District Directors of Transportation Development. The Bid Review Procedure contains a definitions section that defines several terms employed by the Department to determine whether a bid or a unit item within a bid is “unbalanced.” Those terms and their definitions are as follows: Materially Unbalanced: A bid that generates reasonable doubt that award to that bidder would result in the lowest ultimate cost or, a switch in low bidder due to a quantity error. Mathematically Unbalanced: A unit price or lump sum bid that does not reflect a reasonable cost for the respective pay item, as determined by the department’s mathematically unbalanced bid algorithm. Official Estimate: Department’s official construction cost estimate used for evaluating bids received on a proposal. Significantly Unbalanced: A mathematically unbalanced bid that is 75% lower than the statistical average. Statistical Average: For a given pay item, the sum of all bids for that item plus the Department’s Official Estimate which are then divided by the total number of bids plus one. This average does not include statistical outliers as determined by the department’s unit price algorithm. For every road and construction project procurement, the Department prepares an “official estimate,” which is not necessarily the same number as the “budget estimate” found in the public bid solicitation. The Department keeps the official estimate confidential pursuant to section 337.168(1), which provides: A document or electronic file revealing the official cost estimate of the department of a project is confidential and exempt from the provisions of s. 119.07(1) until the contract for the project has been executed or until the project is no longer under active consideration. In accordance with the Bid Review Procedure, the six bids for Contract T7380 were uploaded into a Department computer system along with the Department’s official estimate. A confidential algorithm identified outlier bids that were significantly outside the average (such as penny bids) and removed them to create a “statistical average” for each pay item. Astaldi’s unit pricing was then compared to the statistical average for each item. The computer program then created an “Unbalanced Item Report,” flagging Astaldi’s “mathematically unbalanced” items, i.e., those that were above or below a confidential tolerance value from the statistical average. The unbalanced item report was then reviewed by the district design engineer for possible quantity errors. No quantity errors were found.1/ The Department then used the Unbalanced Item Report and its computer software to cull the work items down to those for which Astaldi’s unit price was 75 percent more than or below the statistical average. The Department sent Astaldi a form titled “Notice to Contractor,” which provided as follows: The Florida Department of Transportation (FDOT) has reviewed your proposal and discovered that there are bid unit prices that are mathematically unbalanced. The purpose of this notice is to inform you of the unbalanced nature of your proposal. You may not modify or amend your proposal. The explanation of the bid unit prices in your proposal set forth below was provided by ASTALDI CONSTRUCTION CORPORATION on ( ) INSERT DATE. FDOT does not guarantee advanced approval of: Alternate Traffic Control Plans (TCP), if permitted by the contract documents; Alternative means and methods of construction; Cost savings initiatives (CSI), if permitted by the contract documents. You must comply with all contractual requirements for submittals of alternative TCP, means and methods of construction, and CSI, and FDOT reserves the right to review such submittals on their merits. As provided in section 5-4 of the Standard Specifications for Road and Bridge Construction you cannot take advantage of any apparent error or omission in the plans or specifications, but will immediately notify the Engineer of such discovery. Please acknowledge receipt of this notice and confirmation of the unit bid price for the item(s) listed below by signing and returning this document. Section 5.4 of the Bid Review Procedure describes the Notice to Contractor and states: “Contracts are not considered for award until this form has been signed and successfully returned to the Department per the instruction on the form.” State estimating engineer Greg Davis testified that the stated procedure was no longer accurate and “need[s] to be corrected” for the following reason: Since the procedure was approved back in 2011, we’ve had some subsequent conversations about whether to just automatically not consider the award for those that are not signed. And since then we have decided to go ahead and just consider the contract, but we are presenting a notice, of course, unsigned and then let the technical review and contract awards committee determine. Astaldi signed and returned the Notice to Contractor and noted below each of the ten listed items: “Astaldi Construction confirms the unit price.” Mr. Davis explained that the purpose of the Notice to Contractor form is to notify the contractor that items have been identified as extremely low and to ask the contractor to confirm its understanding that in accepting the bid, the Department will not necessarily approve design changes, methods of construction, or maintenance of traffic changes. Section 6.6 of the Contract Procurement Procedure sets forth the circumstances under which an apparent low bid must be considered by the Department’s Technical Review Committee (“TRC”) and then by the Contract Awards Committee (“CAC”). Those circumstances include: single bid contracts; re-let contracts; “significantly mathematical unbalanced” bids; bids that are more than 25 percent below the Department’s estimate; 10 percent above the Department’s estimate (or 15 percent above if the estimate is under $500,000); materially unbalanced bids, irregular bids (not prepared in accordance with the Standard Specifications); other bid irregularities2/; or “[a]ny other reason deemed necessary by the chairperson.”3/ Bids that are not required to go before the TRC and CAC are referred to as “automatic qualifiers.” Because it was mathematically unbalanced, the Astaldi bid was submitted to the TRC for review at its June 28, 2016, meeting. The TRC is chaired by the Department’s contracts administration manager, Alan Autry, and is guided by a document entitled “Technical Review Committees” (“TRC Procedure”). The TRC Procedure sets forth the responsibilities of the TRC in reviewing bid analyses and making recommendations to the CAC to award or reject bids. The TRC voted to recommend awarding Contract T7380 to Astaldi. The TRC’s recommendation and supporting paperwork was referred to the CAC for its meeting on June 29, 2016. The duties of the CAC are described in a document entitled “Contracts Award Committees” (“CAC Procedure”). Pursuant to the CAC Procedure, the CAC meets approximately 14 days after a letting to assess the recommendations made by the TRC and determines by majority vote an official decision to award or reject bids. Minutes for the June 29, 2016, CAC meeting reflect 21 items before the committee including: two single bid contracts; four bids that were 10 percent or more above the official estimate; one bid that was 15 percent or more above the official estimate on a project under $500,000; three bids that were more than 25 percent below the official estimate; and 11 bids with significantly unbalanced items, including Contract T7380 with an intended awardee of Astaldi. The CAC voted to award Contract T7380 based on the low bid submitted by Astaldi. A Notice of Intent to award the contract to Astaldi was posted on June 29, 2016. As noted at Finding of Fact 2, supra, Contract T7380 consisted of seven components: structures, roadway, signage, lighting, signalization, utilities, and intelligent transportation system. The Department does not compare bids by component, but looks at the total bid amount to find the lowest bidder. The Department also reviews the bids for discrepancies in individual unit items using the process described above. Astaldi’s bid of $48,960,013 was approximately $8.8 million below Prince’s bid of $57,792,043, $9.6 million less than Hubbard’s bid of $58,572,352, and $2.7 million below the Department’s public proposal budget estimate of $51,702,729. As part of its challenge to the intended award, Prince performed a breakdown of bids by individual components and discovered that nearly all of the differences between its bid and Astaldi’s could be attributed to the utilities component. Astaldi’s bid for the utilities component was $7,811,720, which was roughly $8.5 million below Prince’s utilities bid of $16,305,903 and $5.8 million below Hubbard’s utilities bid of $13,603,846.4/ The utilities component was included pursuant to an agreement between the Department and Hillsborough County, the owner of the water and sewer lines, relating to the improvement of water and sewer lines along the roadway limits of the project. The utility work consists of installing a new water- line and force main sewer. The existing water main and the existing force main conflict with the proposed location of the new storm drainage system. The new water main and force main must be installed, tested, and approved before being put into active service. To prevent water utility outages to customers, the new system must be installed and approved before the existing waterline and existing force main can be cut off and removed. Utility work is therefore the first task to be performed on Contract T7380. Once the utility component is completed, the contractor will furnish and install the stormwater system, the roadway, the bridgework, and all other components. Article 3-1 of the Standard Specifications5/ reserves to the Department the right to delete the utility relocation work from the contract and allow the utility owner to relocate the utilities. Utilities are the only portion of a Department contract subject to deletion because the funding is provided by the utility owner, which usually has allocated a certain dollar figure to contribute towards the contract prior to the bidding. If the bid for utilities comes in over the utility owner’s budget, the owner can opt out of the contract and self-perform. In this case, Hillsborough County had contracted with the Department to contribute $8.9 million for utility relocation work. The Department did not exercise the option to delete the utilities portion of the contract. Jack Calandros, Prince’s chief executive, testified that Prince uses a computer program called HeavyBid, created and supported by a company called HCSS, to build the cost components of its bids. Every witness with industry knowledge agreed that HeavyBid is the standard program for compiling bids in the construction field. Mr. Calandros testified that cost components include material quotes provided by third-party vendors and quotes from potential subcontractors. Labor and equipment costs are ascertained by using historical rates and actual cost estimates that are tracked by the HeavyBid software. Prince maintains its own database of costs derived from 20 years’ experience. Mr. Calandros stated that Prince’s internal labor and equipment rates are checked and adjusted at least once a year to ensure they are current and accurate based on existing equipment and personnel. Prince received three vendor quotes for the materials to perform the utility work on Contract T7380. In compiling its bid, Prince ultimately relied on a final quote from Ferguson Waterworks (“Ferguson”) of $8,849,850. Based on this materials quote and Prince’s overall utilities bid of $16,305,903, Mr. Calandros opined that it would not be possible for Astaldi to perform the utilities component for its bid amount of $7.8 million. Prince’s estimating expert, John Armeni, reviewed Astaldi’s bid file, read the deposition testimony of Astaldi’s chief estimator, Ed Thornton, and spoke to Mr. Thornton by telephone. Mr. Armeni also reviewed Prince’s bid and the bid tabulation of all bidders’ utilities component line items. Based on his review and his extensive experience in the industry, Mr. Armeni concluded that Astaldi’s bid does not include all costs for labor, material, and equipment necessary to construct the utilities portion of this project. Mr. Armeni reviewed the materials quote from Ferguson that Prince used in its bid. He noted that Astaldi’s bid file contained an identical quote from Ferguson of $8.8 million for materials, including some non-utilities materials. Mr. Armeni noted that the Ferguson quote for utilities materials alone was approximately $8 million, an amount exceeding Astaldi’s entire bid for the utilities portion of the project. Mr. Armeni also noted that Astaldi’s overall bid was 18 percent below that of the second lowest bidder, Prince. He testified that 18 percent is an extraordinary spread on a bid where the Department is providing the quantities and all bidders are working off the same drawings and specifications. Mr. Armeni believed that the contracting authority “should start looking at it” when the difference between the lowest and second lowest bidder is more than 10 percent. In his deposition, Mr. Thornton testified he was not aware of how Astaldi arrived at its bid prices for the utility section of the project. Mr. Thornton indicated multiple times that he was not Astaldi’s most knowledgeable person regarding the bid submitted by Astaldi on Contract T7380 project. He testified that Astaldi intended to subcontract the utilities work and acknowledged that the company received a subcontractor quote of $14.9 million after the bids were submitted. Mr. Thornton did not know if Astaldi had solicited the quote. He said it is not unusual for a company to receive subcontractor bids after it has been named the low bidder on a project. Mr. Thornton conceded that Astaldi’s bid did not include all the costs necessary to construct the utilities portion of Contract T7380. At his deposition, he did not have before him the materials needed to determine which items of cost Astaldi had omitted. Mr. Thornton testified that Astaldi was not missing any information it needed at the time of bid submission and understood that its price was to include all labor, materials, and subcontracting costs to perform the contract. After the proposed bid award, Astaldi used HeavyBid to produce a report indicating that the company now estimates its cost of performing the contract at $53,708,129.03, or roughly $4.75 million more than its winning bid. Mr. Thornton testified that Astaldi nonetheless stood ready to execute the contract and perform the work at its bid price. Central to the dispute in this case is Standard Specifications Section 9, “Measurement and Payment,” article 9-2 of which is titled “Scope of Payments.” In particular, subarticle 9-2.1 provides: 9-2.1 Items Included in Payment: Accept the compensation as provided in the Contract as full payment for furnishing all materials and for performing all work contemplated and embraced under the Contract; also for all loss or damage arising out of the nature of the work or from the action of the elements, or from any unforeseen difficulties or obstructions which may arise or be encountered in the prosecution of the work until its final acceptance; also for all other costs incurred under the provisions of Division I. For any item of work contained in the proposal, except as might be specifically provided otherwise in the payment clause for the item, include in the Contract unit price (or lump sum price) for the pay item or items the cost of all labor, equipment, materials, tools and incidentals required for the complete item of work, including all requirements of the Section specifying such item of work, except as specially excluded from such payments. Prince contends that the second paragraph of subarticle 9-2.1 renders Astaldi’s bid nonresponsive because Astaldi admittedly failed to include “the cost of all labor, equipment, materials, tools and incidentals” in its bid. Prince points out that the “Technical Special Provisions” governing the utilities portion of the project reinforce the requirement that each bidder include all costs for the work. Technical Special Provisions Section 1-7.1 provides that “[p]ipe installation cost shall include all necessary work, equipment, and labor needed for installing the pipe, such as, coordination with existing utilities and support during construction and support of existing power poles during construction.” Technical Special Provisions Section 1-8.1 goes on to say that “[n]o separate payment will be made for the following items for work under this Technical Special Provision and the cost of such work shall be included in the applicable contract pay items of work,” followed by a comprehensive list of 30 items. Prince concludes that the requirement that each bidder include all costs, including costs of all necessary labor, equipment, and materials, in the Unit Price for each work item is “manifest” in the bid specifications and requires rejection of any bid that does not include all costs. Mr. Armeni opined that if one bidder excludes a portion of its costs, the other bidders are placed at a competitive disadvantage. Alan Autry, the Department’s central contracts administration manager, testified that five other projects were let as part of the bid package that included Contract T7380. He stated that it is typical for the Department to list multiple projects on one day. Mr. Autry’s office usually performs one bid letting per month, with the holiday months of November and December rolled together in a single letting. Mr. Autry stated that his office lets between 200 and 300 projects per year, not counting contracts that are let at the district level. Twenty other contracts were before the CAC at the June 29, 2016, meeting at which the Astaldi award in this case was approved. As noted at Finding of Fact 2, supra, Contract T7380 included 666 line items. Six companies submitted bids, meaning there were a total of 3,996 line items in this single contract. Assuming that the 200 to 300 other projects let by the Department’s Tallahassee office contain similar numbers, there are more than one million line items bid in any given year. If Prince’s reading of the bid specifications is correct, the Department is required to examine each of these line items and somehow make a determination whether the item includes all of the bidder’s costs. This problem of determining bidder cost is complicated by the presence of “companion” or “sister” items in bids, i.e., two items that must be considered in tandem to arrive at something like the actual cost of the work. Prince provided an example of such companion items in its analysis of the bids in this project. Two bid items included in the structures section of the bid proposal form were concrete culverts and reinforcing steel. The contractor may cast the culverts in place at the worksite or purchase them precast. If the concrete culvert is cast in place at the worksite, then reinforcing steel must be used to strengthen the culvert. If the concrete culvert is precast by a materials supplier, then the reinforcing steel has already been incorporated into the culvert at the time of installation. Mr. Calandros explained that when a contractor uses precast culverts, there is no need to list a separate additional cost for reinforcing steel; all costs are captured in the line item for concrete culverts. In this bid, Prince used precast culverts and therefore bid a penny per unit for reinforcing steel.6/ Bidders who cast the culverts in place showed a much higher cost for reinforcing steel but a lower cost for the concrete culverts. When the “companion items” were considered in tandem, the total cost for each vendor was fairly consistent. Prince’s explanation for companion items was coherent but did not explain how the Department is supposed to know which items are companion items as it undertakes the line-by-line cost examination of each bid in accordance with Prince’s reading of the bid specifications. Prince also failed to provide an explanation as to how the Department is to determine a bidder’s costs for any one line item or, for that matter, for its overall bid on a project. Bidders consider their cost information and the processes by which they build bids to be confidential proprietary information. In the instant case, Prince disclosed its own information (aside from materials costs) only under seal during litigation. In its ordinary course of business, the Department does not have access to this information. In fact, as noted at Finding of Fact 23, supra, the Department does not compare bids by component. It looks only at the total bid amount in determining the lowest bidder. Standard Specifications Article 3-8 reserves to the Department the right to perform an audit of the contractor’s records pertaining to the project upon execution of the contract. No authorization is provided to audit records of bidders prior to contracting. Standard Specifications Subarticle 2-5.1 allows bidders to indicate “free” or “$.00” for items that will be supplied at no cost to the Department. Though the Department’s practice, according to Mr. Autry, is to include zero bid items on the Notice to Contractor for confirmation of the price, subarticle 2-5.1 requires no Department investigation as to whether the bidder’s cost for a zero bid is actually zero. Bidders often bid a penny on items, as Prince did on reinforcing steel in this case. Standard Specifications Article 3-5 requires all contracts to be secured by a surety bond such that, in the event of a default by the contractor, the surety company will indemnify the Department on all claims and performance issues. Standard Specifications Section 4 provides that the scope of work is to be determined within the contract, including the furnishing of all labor, materials, equipment, tools, transportation, and supplies required to complete the work. The Department is authorized to make changes to the scope of work and make equitable adjustments of payments. If necessary, the Department may enter into supplemental agreements for additional or unforeseen work. Prince cautions that these change provisions could become relevant because Astaldi’s bid contains no information explaining how Astaldi will cover the $4.75 million difference between its bid price and its actual cost to perform the contract. Prince accurately states that nothing in Astaldi’s bid demonstrates that it has cash reserves to cover the loss and still complete the entire scope of the work.7/ Prince contends that this lack of demonstrable reserves renders Astaldi nonresponsible as to this project. Prince argues that it is error for the Department to rely on Astaldi’s certificate of qualification as proof of the company’s responsibility. The certificate of qualification process considers a contractor’s financial status at the time it submits its financial statements and other information regarding company resources. Prince contends that the Department’s assessment of the contractor’s financial statements and issuance of a certificate of qualification is insufficient to determine the contractor’s responsibility on a given bid. Prince argues that the Department is required by its governing statutes and the Standard Specifications to award a particular contract to the particular bidder that is the lowest, responsive, and responsible bidder, and that “responsible” for a given project is not synonymous with “prequalified.” Prince hypothesizes that under the Department’s practice, a bidder could possess a certificate of qualification issued in January, be indicted in another state for fraud and bribery in February, submit the lowest bid for a Department project in March, and be awarded the contract. By relying solely on the bidder’s certificate of qualification to determine responsibility, the Department could award a contract to a nonresponsible bidder. Section 337.14 provides that any person desiring to bid on any construction contract in excess of $250,000 must first be certified by the Department. Mr. Autry explained that the Department prequalifies contractors to submit bids on certain types of contract, such as major bridges and structures. Contractors applying for certification are required to submit their latest annual financial statements. The Department is charged with reviewing applications to determine “whether the applicant is competent, is responsible, and possesses the necessary financial resources to perform the desired work.” § 337.14(3), Fla. Stat. The Department assigns the contractor work classes and a total capacity after evaluating its experience and financials. The Department’s certificate is good for 18 months, though the contractor’s capacity is reviewed annually. At the time of a particular bid, the Department verifies the contractor’s available capacity, which is simply its total assigned capacity minus current work the contractor is performing for the Department. Mr. Autry testified that the Department does not go back and look at a bidder’s financials to determine whether it can sustain a loss on a given project. The Department does not repeat its capacity analysis during the year, regardless of how many projects the company bids on. The Department’s analysis is limited to whether the company’s current capacity is sufficient for the project on which it is bidding.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Transportation enter a final order dismissing Prince Contracting, LLC’s, second amended formal written protest and awarding Contract T7380 to Astaldi Construction Corporation. DONE AND ENTERED this 22nd day of December, 2016, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of December, 2016.
The Issue At issue in this proceeding is whether the decision of respondent, Department of Transportation (Department), to award the subject bid to intervenor, The Walsh Group, Ltd., Inc. and Subsidiaries d/b/a Archer-Western Contractors, Ltd. (Archer-Western), comported with the essential requirements of law.
Findings Of Fact The bid process In June 1995, the Department of Transportation (Department) issued an invitation to bid (ITB), State Project Number 93280-3504, Contract Number E- 4866, for the repair and rehabilitation of the Royal Park Bridge, a two span, four leaf bascule bridge, which spans the Intercoastal Waterway and connects the town of Palm Beach to West Palm Beach, Palm Beach County, Florida. Prospective bidders were contacted through a bid solicitation notice, which was sent to prequalified contractors, and interested firms ordered bid packages, which included plans and specifications. The subject project was experimental, and was an effort to identify the most cost-effective means of repainting bridges that contained, inter alia, lead-based paint, a hazardous material, while minimizing exposure of workers and the public as well as the environment (the Intercoastal Waterway), to the hazardous materials. The technical specifications or capabilities of the equipment to be used to abrade and prepare the bridge surfaces for repainting, keeping in mind the objective of the project, were developed by the Department's consultant, Kenneth C. Clear, and are noted in section 560, subsection 1.01.1, of the specifications, discussed infra. At the time, Mr. Clear was aware of one system, the "Cavi-Tech" or "Cavi-Blast" method, a proprietary system devised by Cavi-Tech, Inc., that could comply with the technical specifications, but did not know of any other company that had a similar process. Consequently, in drafting the technical requirements at issue in this bid challenge, discussed more fully infra, he identified the "Cavi-Blast" system of Cavi-Tech, Inc., as capable of satisfying the technical requirements, and further provided, at the bidder's election, for the use of alternative equipment if it could be shown to meet the surface preparations standards described in the ITB. Pertinent to this case, Section 560 of the specifications, entitled Repainting Exposed Steel, at page 560-1 of the ITB, specified the following technical requirements for surface preparation equipment: Surface Preparation Equipment Surfaces shall be abraded and prepared for recoating using an energy enhanced water jet generated by equipment capable of sustained operation at pressures in excess of 17,000 psi. Nozzles shall operate using resonation and cavitation technology. Production rates shall be at least 600 square feet per machine and production shift in the case of full coating removal (CB-4 per section 1.2), and 1,500 square feet per machine and production shift for sweep- off blasts which remove all oil, grease, dirt, loose paint, loose rust, rust scale and loose mill scale, and profile the remaining paint (CB-1 per section 1.2). The equipment shall include closed-loop water handling and filtration systems capable of repeated reuse of blast water and on-site treatment of the water upon completion such that it is rendered non-hazardous. Abrasives, steel shot and/or chemical strippers shall NOT be used. The surface preparation equipment shall be capable of achieving the surface preparation standards described in section 1.2, and document ation of its successful use on at lest 10 similar bridge or industrial structures totaling at least 250,000 square feet shall be submitted with the bid. Additionally, detailed project documentation and air monitoring historical data from at least 5 projects in which paint containing a lead primer was completely removed without the use of negative pressure enclosures, shall be submitted with the bid. These data shall show conclusively that, on each of the projects, the lead exposure to individuals WITHOUT breathing apparatus located 5-feet and further from the water jet nozzle was less than the OSHA action level (i.e. the air qualified as non-hazardous, breathable air in accordance with Code of Federal Regulations 29 CFR 1926.62 "Lead") when the equipment was operated at full capacity for at least 8-hours. The Cavi-Tech, Inc., Inc. (2108 Moon Station Drive, Kennesaw, Georgia 30144; phone Number 404-424-4015; fax Number : 404-424-4009) "Cavi-Blast" system meets the above requirements. The ITB package did not require, apart from any implications that may be drawn from the foregoing provisions, that the bidder specify the type of surface preparation equipment it proposed to use, and no form was included with the bid package on which such election could be denoted. The bid package did include, however, a standard proposal to be executed by the bidder, which bound the bidder "to perform all necessary work, as provided for in the contract, and if awarded the Contractor [Bidder] to execute the contract within 20 calendar days after the date on which the notice of award has been given." The ITB further required a proposal guarantee, payable to the Department, of not less than five percent of the total actual bid, "which guarantee is to be forfeited as liquidated damages if . . . the Proposal is accepted [and] the Bidder . . . fail[s] to execute the attached Contract under the conditions of this proposal. " On August 17, 1995, after the pre-bid conference, the Department issued Addendum Number 1 to the ITB, which included the following clarification as to the painting specifications for the project: Surface preparation equipment requirements are specified in Section 1.01 of the painting specifications. Cavi-Tech, Inc. is indicated as a company having equipment and experience meeting the requirements of this specification section. Other companies meeting the requirements of Section 1.01 can bid on this project. In response to the ITB, the Department received five bids for the project. The lowest bid was submitted by Archer-Western, $2,868,816.35, and the second lowest bid was submitted by Coastal, $2,930,461.68. The three other firms that bid on the project were PCL Civil Contracts, Inc. (PLC), with a bid of $2,943,370.20, Gilbert Southern Corp. (Gilbert), with a bid of $2,967,928.10, and M & J Construction Co. of Pinellas County (M & J), with a bid of $3,274,867.17. The bid price proposal submitted by each bidder contained various items which were tallied to derive the total amount bid. Item Number A560 1 was for painting structural steel, and Archer-Western listed a price of $425,300, Coastal a price of $500,000, PCL a price of $350,000, Gilbert a price of $450,000, and M & J a price of $575,348.45. Pertinent to this case, while Archer-Western did secure a quotation from Cavi-Tech, Inc., for Cavi-Blast and coating services, as well as historical data regarding its use, it did not include such documentation with its bid. Consequently, the bid submitted by Archer-Western, as well as the bid of PCL, contained no information in response to subsection 1.01.3, regarding surface preparation equipment. Contrasted with those bids, Coastal, in what it perceived as the appropriate response to subsection 1.01.3, included information from Cavi-Tech, Inc., on the Cavi-Blast system. Gilbert and M & J likewise included documentation on the Cavi-Blast system. The Department, following its evaluation, deemed the five bids responsive, and on October 4, 1995, posted notice of its intent to award the contract to Archer-Western. Coastal timely protested the proposed award (DOAH Case No. 95-5702BID). On October 9, 1995, the Department notified all bidders that it was rescinding its notice of intended award and proposed to reject all bids. Coastal timely protested such decision (DOAH Case No. 95-5703BID).3 Finally, on October 24, 1995, the Department, following reconsideration of its position, resolved to rescind its rejection of all bids and, consistent with its initial decision, award the contract to Archer-Western. Coastal timely protested such award (DOAH Case No. 95-5701BID). The bid protest Here, Coastal contends that Archer-Western's proposal (bid) was not responsive to the ITB because it did not include documentation in response to subsection 1.01.3 of the ITB. By such failure, Coastal suggests Archer-Western failed to commit to using the Cavi-Blast system or identify an alternative system it would use and, therefore, its bid was at material variance from the ITB. That variance, Coastal avers, accorded Archer-Western the opportunity to reevaluate its bid, after bid opening, and then decide whether to adhere to is bid or refuse to abide its bid without penalty due to its non-responsiveness. Contrasted with Coastal's perception of subsection 1.01.3, the Department views that subsection, when read in pari materia with subsections 1.01.1 through 1.01.4, as only requiring documentations when the bidder proposes to use surface preparation equipment other than the Cavi-Blast system. Indeed, the Department observes, it would be superfluous to include documentation demonstrating that the Cavi-Blast system was capable of achieving the surface preparation standards when subsection 1.01.4 specifically states that the Cavi- Blast system meets requirements. Accordingly, where, as here, the bidder does not provide any documentation in response to subsection 1.01.3, the Department contends it may be fairly implied, based on the bidder's agreement in the proposal "to perform all necessary work, as provided for in the contract," that it has proposed to use, and is bound to use, the Cavi-Blast system. Consequently, the Archer-Western bid was, in the Department's opinion, responsive to the ITB. Reading the provisions of subsections 1.01.1 through 1.01.4 in para materia, it must be concluded that the Department's conclusion in this case is supported by logic, and that its decision to award the contract to Archer- Western did not depart from the essential requirements of law.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered dismissing Coastal's protests and, more particularly, its protest of the award of the subject bid to Archer- Western. DONE AND ENTERED this 26th day of February 1996 in Tallahassee, Leon County, Florida. WILLIAM J. KENDRICK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of February 1996.
The Issue The issue is whether the proposed award of Invitation to Bid No. 06-DC-7727 to Communications Engineering Service Company is contrary to the Department of Correction’s governing statutes, rules, policies, or the specifications in the Invitation to Bid for the reasons alleged by Petitioner.
Findings Of Fact The Department issued ITB No. 06-DC-7727 on October 27, 2006. The purpose of the ITB was to solicit bids for maintenance and repair of radio equipment owned by the Department in each of its four regions. The original deadline for submitting bids in response to the ITB was November 30, 2006, but the deadline was extended to December 15, 2006, through an addendum to the ITB. First Communications, CES, and Motorola, Inc., submitted bids for Region I. Another company, Econo Communications, Inc. d/b/a Mobile Communications, also responded to the ITB, but it did not bid on Region I. It was stipulated that First Communications’ bid was responsive to the ITB. The Department determined that the bid submitted by Motorola was not responsive to the ITB. That determination was not challenged. The Department determined that the bid submitted by CES was responsive, despite the issues discussed below. CES was determined by the Department to be the lowest responsible bidder. The bid submitted by CES was $2,571 per month.1 First Communications was the next lowest bidder. Its bid was $3,408.85 per month,2 which is 32.6 percent higher than CES’s bid. Section 4.3.1 of the ITB states that “it is essential that bidders follow the format and instructions contained in the Bid Submission Requirements (Section 5 with particular emphasis on the Mandatory Responsiveness Requirements).” Section 5.1 of the ITB lists the “mandatory responsiveness requirements” for bids, and states that: The following terms, conditions or requirements must be met by the bidder to be considered responsive to the ITB. These responsiveness requirements are mandatory.Failure to meet these responsiveness requirements will cause rejection of a bid. Any bid rejected for failure to meet responsiveness requirements will not be further reviewed. (Emphasis in original). Nearly identical language is contained in Sections 1.7 and 4.3.6.1 of the ITB, and in the ITB Review Manual used by Department staff in reviewing the bids submitted in response to the ITB. Indeed, the ITB Review Manual refers to the mandatory responsiveness requirements as “fatal criteria.” The mandatory responsiveness requirement in the ITB that is most pertinent to this case is in Section 5.1.2,3 which states: It is mandatory that the bidder supply one original signed Bid and three (3) copies of the signed bid. . . . . (Emphasis in original). The bid package submitted by CES did not include the original signed bid. It only included the three copies of the signed bid. This omission was noted by Christina Espinosa, the procurement manager for the ITB who opened the bids on the afternoon of December 15, 2006. However, after Ms. Espinosa consulted with her supervisor and the Department’s legal staff, it was determined that the omission was not material and that CES should be given an opportunity to “cure” its failure to submit the original signed bid. As a result, Ms. Espinosa contacted CES and gave it 24 business hours to “cure” the deficiency. CES delivered the original signed bid to the Department on the morning of December 18, 2006, which is three days after the bid submittal deadline in the ITB, but within the 24-business hour deadline given by Ms. Espinosa.4 CES did not have a representative at the bid opening, and there is no evidence that CES knew it was the lowest bidder, either when Ms. Espinosa gave CES an opportunity to “cure” its failure to submit an original bid on December 15, 2006, or when it submitted the original bid on December 18, 2006. It is undisputed that the original signed bid submitted by CES on December 18, 2006, is identical in all respects to the three copies of the bid that were timely submitted by CES on December 15, 2006. Ms. Espinosa reviewed the bid submitted by CES despite its failure to include the original signed bid. According to ITB provisions referenced above, that omission should have resulted in the bid being rejected and not further reviewed. The CES bid included at least one other deviation from the specifications in the ITB. The bid stated in the “service delivery synopsis” that the turnaround time for the repair of fixed equipment would be 15 working days. A 15-day time period was referenced in the original ITB, but it was changed to eight days in an addendum. Ms. Espinosa contacted CES about this discrepancy, and on January 3, 2007, CES advised Ms. Espinosa by e-mail that it “acknowledges the change in repair times from 15 days to 8 days.” CES was not the only bidder that Ms. Espinosa contacted after the bids were opened to obtain clarification or information omitted from the bid. For example, she contacted First Communications to obtain copies of its articles of incorporation and business licenses that were not included in its bid; to get clarification regarding First Communications’ use of subcontractors; and to confirm that First Communications acknowledged the eight-day turnaround time for repair of fixed equipment since its bid did not contain a service delivery synopsis. Section 4.3.1 of the ITB authorizes the Department to “seek clarifications or request any information deemed necessary for proper review of submissions from any bidder deemed eligible for Contract award.” However, Section 4.3.1 also states that “no modifications by the bidder of submitted bids will be allowed.” The ITB authorizes the Department to waive minor irregularities and non-material deviations in bids, and on this issue, the ITB states: Rejection of Bids The Department shall reject any and all bids not meeting mandatory responsiveness requirements. In addition, the Department shall also reject any or all bids containing material deviations. The following definitions are to be utilized in making these determinations. Mandatory Responsiveness Requirements: Terms, conditions or requirements that must be met by the bidder to be responsive to this solicitation. These responsiveness requirements are mandatory. Failure to meet these responsiveness requirements will cause rejection of a bid. Any bid rejected for failure to meet mandatory responsiveness requirements will not be further reviewed. Material Deviations: The Department has established certain requirements with respect to bids to be submitted by the bidder. The use of shall, must or will (except to indicate simple futurity) in this ITB indicates a requirement or condition which may not be waived by the Department except where any deviation there from is not material. A deviation is material if, in the Department’s sole discretion, the deficient response is not in substantial accord with this ITB’s requirements, provides an advantage to one bidder over other bidders, or has a potentially significant effect on the quantity or quality of terms or services bid, or the prices submitted to the Department. Material deviations cannot be waived and shall be the basis for rejection of a bid. Minor Irregularities: A variation from the solicitation terms and conditions which does not affect the price proposed or give the bidder an advantage or benefit not enjoyed by the other bidders or does not adversely impact the interests of the Department. A minor irregularity will not result in a rejection of a bid. (All emphasis in original). The Department relies on these sections of the ITB as its authority to waive minor irregularities and non-material deviations in bids with respect to any provision of the ITB, including the mandatory responsiveness requirements. On January 4, 2007, the Department posted notice of its intent to award the contract for Region I to CES. In the same posting, the Department rejected all bids for the other three regions. The rejection of all bids for the other regions is not at issue in this case. First Communications timely filed a notice of protest and, then, a formal written protest challenging the intended award of the contract to CES. The Department provided notice of this proceeding to CES, as required by the Order of Pre-hearing Instructions. CES did not file a petition to intervene or otherwise seek to participate in this proceeding.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department issue a final order dismissing First Communications’ protest. DONE AND ENTERED this 5th day of April, 2007, in Tallahassee, Leon County, Florida. S T. KENT WETHERELL, II 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 5th day of April, 2007.
Findings Of Fact Respondent issued an invitation to bid on March 13, 1992. Bid number SB 92-244I involved the disassembly and removal of an existing walk-in freezer and the furnishing and installation of a new walk-in freezer at Coral Sunset Elementary School. The invitations to bid provided in paragraph Y of the Special Conditions: Failure to file a specification protest within the time prescribed in Florida Statutes 120.53 3.(b) shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. (sic) Bid specifications were included in the invitations to bid issued on March 13, 1992. Twenty-three bids were solicited. There were five responses. One of the responses was submitted by Choice Restaurant Equipment, Inc. ("Choice"). Choice is a vendor for equipment manufactured by Petitioner, Nor-Lake, Inc. ("Nor-Lake"). Nor-Lake is an out-of-state corporation with manufacturer's representatives in numerous states including Florida. 4, Petitioner, CHD Marketing Group ("CHD"), is the manufacturer's representative for Nor-Lake in Florida. CHD represents no other manufacturer of the product included in the bid response. Choice is a sales agent for CHD and other manufacturer's representatives in Florida. Choice sells the products of a variety of manufacturers but is the exclusive sales agent for CHD pursuant to a verbal agency agreement. Choice timely submitted a bid for bid number SB 92-244I on April 8, 1992, prior to the bid deadline of 2:00 p.m. on the same day. The successful bidder submitted its bid by Federal Express at 4:51 p.m on April 8, 1992. Respondent's Department of Purchasing and Stores (the "Department") had stated on March 13, 1992, when the invitations to bid were issued, that bid responses must be received by the Department no later than 2:00 p.m. on April 8, 1992, at the Department's address at 3980 RCA Boulevard/Suite 8044, Palm Beach Gardens, Florida, 33410-4276. Prior to April 8, 1992, the Department relocated to a new facility at 3326 Forest Hill Boulevard, West Palm Beach, Florida. The new address was posted at the old location and Department representatives were present at the old address to accept walk-in bids. Federal Express first attempted to deliver the successful bid at the Department's old address at 10:30 a.m. on April 8, 1992. Federal Express delivered the successful bid to the Department's new address at 4:51 p.m. At 2:00 p.m. on the same day, The Department announced that all bids were in and opened the bids that had been delivered. The successful bid and one other bid were delivered on April 8, 1992, after the public opening conducted at 2:00 p.m. on the same day. Bids were tabulated on April 9, 1992. Bid tabulations were posted on April 13, 1992, and the successful bid was announced. The successful bid was for $8,174.00. Three bids were lower than the successful bid. Choice's bid was for $7,742.56. The other two lower bids were for $8,020.00 and $6,620.00. All three lower bids were rejected as non- responsive. Choice's bid was rejected because it did not meet bid specifications for 22 gauge steel, thermostatically controlled door heaters, and reinforced steel door panels. CHD filed a Notice of Protest on April 14, 1992, and a Formal Written Protest on April 24, 1992. CHD's protest alleges that: Choice's bid was lower than that of the successful bidder; the successful bid was not timely made; the bids were not opened publicly in violation of bidding procedure requirements; and the bid specifications were arbitrary and capricious, favored one bidder, and that Choice's bid was responsive. Neither a notice of protest nor a formal written protest was submitted by Choice or Nor-Lake. Neither Choice nor Nor-Lake attended the informal protest conference conducted on April 30, 1992. On May 7, 1992, Respondent's Office of General Counsel issued its written notice of proposed agency action. The written notice recommended that the bid be awarded to the successful bidder and that CHD's protest be dismissed for lack of standing. CHD requested a formal hearing on May 14, 1992, and the matter was referred to the Division of Administrative Hearings for assignment of a hearing officer on May 15, 1992. The bid submitted by Choice was prepared by CHD but signed by the president of Choice. Neither Nor-Lake nor CHD signed a bid or were otherwise bidders of record for bid number SB 92-244I. Neither Choice, CHD, nor Nor-Lake, filed a notice of protest concerning the bid specifications within 72 hours after Choice received the notice of the project plans and specifications on March 13, 1992. The sole basis upon which CHD claims it is substantially affected is the adverse economic impact caused to it by the proposed agency action. The proposed agency action will result in lost sales from this and future transactions. CHD will lose commissions from this and future transactions. The dealer relationship between CHD and Choice will be damaged because Choice will not want to sell a freezer that is not acceptable to Respondent. The marketing strategy developed between CHD and Nor-Lake will be damaged because it is conditioned upon the award of public contracts.
