Findings Of Fact During March 1988, the Respondent issued an Invitation to Bid by which it sought to lease 17,973 net usable square feet of office space to be located within a specified geographic area in Tampa, Florida, under a nine year lease with two additional three year option periods. This Invitation to Bid is referred to as Lease Number 590:1927. Three bids were received in response to the Invitation to Bid, and they were opened on May 13, 1988. Bids were received from the Petitioner, 8900 Centre, Ltd., and the Allen Morris Management Company. All bidders were determined to be responsive to the Invitation to Bid. Despite the fact that petitioner submitted the lowest bid, Respondent notified Petitioner by letter dated June 10, 1988, of its intent to award Lease Number 590:1927 to 8900 Centre, Ltd., as the lowest and best bidder. Petitioner has timely filed its protest seeking review of that decision. It is undisputed that Petitioner submitted the lowest bid. For the first year of the lease, Petitioner bid $7.85 per square foot, while 8900 Centre bid $7.95 per square foot. Thereafter, Petitioner proposed a yearly increase of 50 cents per square foot, reaching $11.85 per square foot in the ninth year of the lease, while 8900 Centre proposed annual increases of approximately 75 cents, reaching $14.00 per square foot in the ninth year. This equates to an actual dollar difference over the nine year term of approximately 185,000. However, using a present value methodology and a present value discount rate of 8.81 percent referred to on page 17 of the bid submittal form, the present value difference in these two bids is approximately $1,000 per month, which would result in a present value difference between Petitioner and 8900 Centre of approximately $108,000 over the nine year period. Neither the Invitation to Bid, bid specifications, nor the actual bids were offered into evidence. One page of the bid submittal form, designated as page 17 of 18, was offered and received in evidence. This portion of the bid submittal form states that the "successful bid will be that one determined to be the lowest and best." It also sets forth evaluation criteria, and assigns weights to each criteria. The evaluation criteria include associated fiscal costs (35 points), location (40 points) and facility factors (25 points) . A synopsis of bids was also offered and received in evidence showing the points awarded to each bidder by the Respondent's bid evaluation committed. Out of a possible 100 points, 8900 Centre received 95.17 points, while Petitioner received 82.25 points and the Allen Morris Management Company received 70.67 points. Petitioner asserts that the members of the evaluation committee were not qualified or knowledgeable in basic construction, design and engineering principles, and therefore could not competently evaluate the bids submitted. However, Petitioner did not offer competent substantial evidence to support this contention. Only the chairperson of the committee, Susan Jennings, was called to testify, and she appeared thoroughly knowledgeable in the bid process, the needs of the agency, the bid requirements and the representations made to the committee members by each bidder, including Petitioner, when the committee made its site visit to each location. Since the actual Invitation to Bid, bid specifications, and evidence about the other committee members were not introduced, it is not possible to know what the specific duties of the committee were, how they were to carry out their duties their qualifications and training, and whether they failed to competently carry out these duties, as alleged by Petitioner. Despite Petitioner's lower bid, Respondent awarded this lease to 8900 Centre, Ltd., based upon the evaluation committee's determination assigning 8900 Centre the highest number of evaluation points. Out of a possible 35 points for fiscal costs, Petitioner received 34 and 8900 Centre received 31.5. Thus, Petitioner's status as low bidder is reflected in the points awarded by the committee. Since neither the bid invitation or specifications were introduced, no finding can be made as to whether the difference between these two bidders comports with any instructions or directions provided by the agency to potential bidders, or whether this difference of 2.5 points on this criteria reasonably reflects and accounts for the dollar difference in these two bids. Petitioner received 34.75 points out of a possible 40 points on the general evaluation criteria "location," while 8900 Centre received the full 40 points. Within this criteria, there were three subcategories, and on the first two subcategories (central area and public transportation) there was an insignificant difference of less than one-half point between Petitioner and 8900 Centre. The major difference between these two bidders which accounts for their significant difference on the location criteria, was in the subcategory of environmental factors, in which Petitioner received 15.17 points and 8900 Centre received the full 20 points. Petitioner did not present competent substantial evidence to discredit or refute the committee's evaluation in the subcategory of environmental factors. To the contrary, the only testimony from a committee member was that of Susan Jennings, and according to her, Petitioner failed to explain the availability of individual air conditioning and heating controls, or the possibility of separate program entrances, which could be made available under its bid. Although Petitioner sought to explain at hearing that these desires of the agency could be accommodated in its bid, there is no evidence that such an explanation was provided in its bid or during the bid process when the evaluation committee visited the Petitioner's site. The committee was aware, however, that 8900 Centre would provide individual heating and air conditioning controls, as well as separate outside entrances for the three programs which would occupy the leased space. Additionally, the committee was concerned, according to Jennings, that parking areas at Petitioner's facility were more remote and removed from the building entrance than at 8900 Centre, and were somewhat obscured by trees and shrubbery, thereby presenting a potential safety concern for employees working after dark. Finally, every employee would either have a window or window access at 8900 Centre, while it was not explained that Petitioner's site would offer a similar feature. Thus, Petitioner failed to establish that the evaluation committee erred in assigning a significantly greater number of points for environmental factors to 8900 Centre than to Petitioner. The evidence reflects a reasonable basis for this difference. The other significant difference between these two bidders was in the subcategory for layout and utilization under the evaluation criteria "facility." Petitioner received 13.67 points while 8900 Centre received a full 20 points. Jennings explained that the separate outside entrances leading directly into the three programs that would occupy this space was preferred to a single reception area for all three programs. Petitioner offered the single reception area in its bid and site visit presentation, while 8900 Centre made it clear that each program would have its own entrance. Since these programs do not have a receptionist position, and none wanted to give up a secretarial position to serve as receptionist for all three programs, the committee did not consider the single reception area entrance to be desirable. Additionally, Petitioner's facility was a two-story building, while 8900 Centre is a single story facility. Jennings explained that the committee considered a ground level facility to be preferable to a two story building, particularly since the Medicaid program was to occupy the major portion of this space. The Medicaid program would have to be split up at Petitioner's facility, either in two separate buildings or on two levels of the same building, while at 8900 Centre, Medicaid could be accommodated in one, single story building, with the other two programs in a second, single story building. Finally, parking at 8900 Centre was directly next to, and outside the entrance of the building, while Petitioner offered to make assigned spaces available in a general parking area which serves its entire 100,000 square foot complex. The parking offered by Petitioner is more remote than that offered by 8900 Centre, and would be less secure at night due to a greater distance from the building entrances and the parking lot. Thus, Petitioner failed to establish that the committee erred in assigning a significantly greater number of points for layout and utilization to 8900 Centre than to Petitioner. There is a reasonable basis for this difference, according to the evidence in the record.
Recommendation Based upon the foregoing, it is recommended that Respondent enter a Final Order dismissing Petitioner's protest to Lease Number 590:1927. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of December 1988. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1050 Filed with the Clerk of the Division of Administrative Hearings this 9th day of December 1988. APPENDIX (DOAH Case Number 88-3765 BID) Rulings on Petitioner's Proposed Findings of Fact: Adopted, in part, in Finding of Fact 1, but Rejected in Finding of Fact 10, and otherwise as not based on competent substantial evidence in the record. Adopted in Finding of Fact 5. 3-5. Adopted in Finding of Fact 4, but Rejected in 7. 6-7. Rejected in Finding of Fact 8. Rejected in Finding of Fact 10, and otherwise as not based on competent substantial evidence in the record. Rejected in Findings of Fact 9 and 10, and otherwise as not based on competent substantial evidence. Rulings on the Respondent's Proposed Findings of Fact: Adopted in part in Finding of Fact 1, but otherwise rejected as not based on competent substantial evidence. Adopted in Finding of Fact 4. 3-4. Adopted in part in Findings of Fact 5 and 6, but otherwise rejected as not based on competent substantial evidence in the record of this case. Adopted In Findings of Fact 5, 7-10. Adopted in Finding of Fact 5. Adopted in Finding of Fact 7. Adopted in Finding of Fact 8. Rejected as irrelevant and unnecessary since the point difference in this subcategory is insignificant. Adopted in Finding of Fact 9. 11-12. Adopted in Finding of fact 10. COPIES FURNISHED: Michael V. Giordano, Esquire 7821 North Dale Mabry Suite 100 Tampa, Florida 33614 Jack Farley, Esquire W. T. Edwards Facility 4000 West Buffalo Fifth Floor, Room 520 Tampa, Florida 33614 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made. On October 11, 1991, DOT's District Four office let out for bid district contracts E4551 and E4554. Contract E4551 calls for the mechanical sweeping of Interstate 95 in Broward County. Contract E4554 calls for the mechanical sweeping of Interstate 95 in Palm Beach County. At a mandatory pre-bid conference, the bidders for the Contracts were provided with a packet which included a Notice to Contractors and Standard Specifications. The Notice to Contractors is a four page document which is specific to each contract. The Standard Specifications are the same for all district contracts. Both the Notice to Contractors and the Standard Specifications to the bidders required bidders to submit proof of the ability to acquire a performance and payment bond in an amount equal to the contract bid price. Bidders could satisfy this requirement by submitting a bid guarantee of 5% of the bid, submitting a notarized letter of intent from a bonding company or by providing a Certificate of Qualification issued by Respondent. The Notice to Contractors for both Contracts provided as follows: Failure to provide the following with each bid proposal will result in rejection of the contractor's bid.... District contracts of $150,000 or less require the following as proof of ability to acquire a performance and payment bond: A notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a performance and payment bond in the amount of your bid, should your firm be awarded the project; in lieu of a notarized letter the following may be substituted: (1) a bid guarantee of five percent (5%); or (2) a copy of the Contractor's Certificate of Qualification issued by the Department. (No emphasis added) Similarly, the first Standard Specification provides: 1.1 Bidders (contractors) A contractor shall be eligible to bid on this contract if:... (2) Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the District Contract Administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of your bid, should your firm be awarded the project.... The requirement to submit proof of the ability to acquire a performance and payment bond has been imposed on the Districts by DOT Directive 375-00-001-a (hereinafter the "Directive".) This Directive was in place at all times material to this proceeding. Section 3.2.2 of the Directive provides: A contractor shall be eligible to bid if: ...Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the minicontract administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of the bid, should the firm be awarded the project. A bid guaranty as specified above may substitute as proof of ability to obtain a performance and payment bond. This applies to bids amount over or under $150,000. A copy of the Contractor's Certificate of Qualification issued by the Department may be substituted in lieu of a notarized letter for those contracts not requiring a bid bond. The bids for the Contracts were opened on October 11, 1991 in Fort Lauderdale, Florida. Bids were received from four bidders: CPM, SCA, Florida Sweeping, Inc. and P. F. Gomez Construction Co., Inc. In its bid proposals, SCA included executed bid bonds in an amount sufficient to cover the amount of each bid proposal. Each bid bond cost $55.00. CPM did not submit executed bid bonds with its proposals. Instead, CPM submitted letters from Mark A. Latini dated September 25, 1991. Those letters were provided on the stationery of Bonina-McCutchen-Bradshaw, Insurance and indicate that Mr. Latini is the "bond manager." The letters provide as follows: Amwest Surety Insurance Company is the surety for the above-referenced contractor and stands ready to provide the necessary performance and payment bond for the referenced bid should Certified Property Maintenance, Inc., be low and awarded the referenced contract. All bonds are subject to normal underwriting requirements at the time of the bond request.... The letters submitted by CPM with its bid proposals were not notarized and were not binding obligations to issue bonds since they were conditioned upon meeting certain unspecified underwriting requirements at the time of the bond requests. The submitted bids were reviewed by the District Four Contractual Services Office. The bids submitted by CPM were the lowest for each contract. Its bid for Contract No. E4551 was $109,343.97. Its bid for Contract No. E4554 was $30,312.63. SCA's bids for the Contracts were $139,442.14 and $44,100.00, respectively. During the initial review of the bid proposals, the Contractual Services Office rejected CPM's bids for failure to have its bonding company "letters of intent" notarized. In addition, the bid proposals submitted by Florida Sweeping, Inc. were rejected for failure to note a required addendum and the bids submitted by P. F. Gomez Construction Co., Inc. were rejected because the "proposal bond was not of proper character". On October 18, 1991, DOT posted its Notice of Intent to Award the Contracts to SCA, the only bidder for the Contracts whose proposals had not been rejected. CPM timely filed protests of the proposed awards to SCA on October 22, 1991. The protests filed by CPM argued that its bids should not have been invalidated simply because the bonding company's letters did not include notary seals. At this point, the sole basis for the disqualification of CPM's bids was the failure to have the bonding company letters notarized. Respondent contends that, except for the absence of the notary seal, the letters submitted by CPM met the requirements of the Notice to Contractor and the Standard Specifications cited above. However, those letters are equivocal and do not evidence a binding commitment to issue a bond upon award of the contract. The DOT officials admit that they do not know what "normal underwriting requirements" would or could be required by CPM's bonding company. This conditional language makes it uncertain whether CPM could obtain the necessary bond. Therefore, it is concluded that those letters do not meet the requirements of the Notice to Contractors, the Standard Specifications or the Directive. A hearing on CPM's protest was not held. CPM's president, Raymond Hanousek, who prepared CPM's bid and attended the pre-bid meeting, called DOT's District office the day the bids were opened and was informed that his company's bid was low, but was rejected because its bond commitment letter was not notarized. Mr. Hanousek spoke with Joseph Yesbeck, the District's Director of Planning and Programs. After their conversation, Mr. Yesbeck reviewed the file and met with Teresa Martin, the District's contract administrator for construction and maintenance contracts, and other members of the contracting staff. Ms. Martin explained why CPM's bid had been disqualified, and the matter was thereafter discussed with the District and Department attorneys. After reviewing the situation, Mr. Yesbeck determined that the failure to submit notarized letters should be considered a non-material deviation and the bids submitted by CPM should be accepted and considered the low responsive bids. Mr. Yesbeck concluded that the absence of the notary seal did not give any competitive advantage to CPM and that defects of this nature are routinely allowed to be cured. Therefore, he reversed the contract administrator's decision to disqualify CPM on both Contracts. The District secretary concurred in the decision reached by Mr. Yesbeck to repost the award of the Contracts. Mr. Yesbeck prepared a joint letter of reposting which removed CPM's disqualification and declared CPM to be the low bidder for both Contracts. At the time Mr. Yesbeck made his decision, he had not reviewed the Directive from the Assistant Secretary's office stating that there must be a notarized letter showing proof of ability to obtain a performance and payment bond. Mr. Yesbeck did not review the Directive until his deposition was taken one week prior to the hearing in this case. According to Ms. Martin, the option to provide a notarized letter from a bonding company as an alternative to the posting of a 5% bid guarantee or obtaining prequalification was designed to promote participation in state contracting by small business and minority business enterprise applicants. While DOT was apparently trying to make it easier and cheaper for companies to bid by not requiring a bond to be posted, the DOT Directive and the bid documents still clearly required unconditional proof that a bid bond would be issued if the contract was awarded to the bidder. CPM was not prequalified nor did it post a bond. Thus, in order to meet the requirements of the Notice to Contractors and the Standard Specifications, CPM's only option was to submit a notarized letter showing proof of ability to obtain a performance and payment bond. DOT was never provided with any proof that CPM had been prequalified by the bonding company for a bond and/or that a bond would unconditionally be issued if CPM was awarded the Contracts. Because the letters stated they were "subject to normal underwriting requirements at the time of the bond request", there was some possibility CPM would not be able to obtain a bond. Such a condition was not permissible under the bid doucments. The decision to accept CPM's bid was contrary to the DOT Directive, the Notice to Contractors and the bid specifications which require that a bidder demonstrate proof of ability to obtain a performance and payment bond. Consequently, it is concluded that DOT's decision to accept the conditional, unnotarized letters submitted by CPM was arbitrary and capricious. There is some indication that other DOT Districts have, on occasion, waived the notarization requirement for the bond letter. However, it is not clear whether the language in the bid documents was the same or similar in those cases and/or whether the bond letters were conditional. In the past, whenever District Four has gotten a bid without a notarized bond letter, the bid was rejected. Apparently, there has never been a protest based on such a denial in District Four. Under Section 337.18, DOT does not need to require notarized, unconditional bond letters on contracts under $150,000. Indeed, there was a suggestion that some DOT Districts have dropped the requirement for certain contracts under $150,000. However, the bid documents in this case clearly required some proof that the bidder could acquire a performance and payment bond upon award of the Contracts. It was incumbent for all bidders to meet this requirement. It was arbitrary to delete this requirement after the bids were submitted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding the bids submitted by CPM to be non-responsive and rejecting those bids. Petitioner should enter into negotiations with SCA regarding the award of the contract. In the absence of a favorable negotiation, Petitioner should enter a Final Order rejecting all bids and opening the Contracts up for new bids. DONE and ENTERED this 24th day of March, 1992, at Tallahassee, Florida. J. STEPHEN MENTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of March, 1992.
Findings Of Fact This case concerns what is called a "turnkey lease." The program was developed by the State of Florida in 1971. It encompasses a situation whereby agencies seeking space for their operation may, after a specific need is determined that cannot be filled by existing adequate space, solicit competitive bids from developers for the provision of land and the construction of a building there sufficient to meet the agency's needs, for lease specifically to the agency requesting it. The Bureau of Property Management within DGS was given the initial responsibility to develop the guidelines, promulgate the rules, and seek statutory authority for such a program. The Bureau's current role is to work with agencies requesting this program. The agency certifies the need to the Bureau, in addition to the fact that there is no available existing space present. The Bureau then determines agency needs and gives the agency the authority to solicit the bids for the turnkey project. Once the bids have been solicited and the preproposal conferences have been held, the bids are then received, evaluated, and a recommendation for an award is forwarded by the agency to the Department of General Services. DGS reviews the supporting documents required by the provisions of the Florida Administrative Code and either concurs or does not concur in the recommendation. If DGS concurs, the submitting agency is notified and is permitted to then secure the lease. Once the lease has been entered into, it is then sent back to DGS for review and approval, as to the conditions, and thereafter the plans and specifications for the building are also referred to DGS for review and approval as to the quality and adequacy of the plans and specifications and code compliance. Section 255.249 and Section 255.25, Florida Statutes, sets forth the requirement for soliciting and awarding bids for lease space in an amount in excess of 2500 square feet. This provision requires that an award of this nature be made to the lowest and best bidder, and DGS subscribes to that standard in evaluating and determining whether or not it will concur with an agency's recommendation. In the instant case, DHRS advertised for bids for the construction of office space in Palatka, Florida for its District III facilities. Before seeking to solicit bids, District III staff conducted a search for other possible existing space within a five mile radius of the downtown area and located no adequate facilities. Thereafter, a certification of need was processed for a solicitation of proposals and approval was granted by DGS to follow through with the solicitation. A preproposal conference was advertised and held on October 14, 1983 and after review by those present at the conference, bid opening date was set for November 22, 1983. Thirty-two bid packages were distributed and twelve bidders submitted proposals. The public bid opening was held as scheduled at 2:00 P.M. on November 22, 1983, in Palatka, Florida by Robert E. Litza, Facilities Service Coordinator for DHRS District III. Of the bids submitted by the twelve bidders, the lowest bid was rejected because of the failure of the bidder to comply with the requirements of the bid package. Of the remaining eleven bids, the four lowest were evaluated with the understanding that additional high bids would be evaluated if the four lowest were found to be unacceptable. Among the four bids considered were bids of Chuck Bundschu, Inc.; Kenneth McGunn, the Intervenor (Mr. McGunn submitted five price schedules for his bid and of these only one was considered); Elizabethan Development, Inc.; and TSU. A recommendation by the evaluation committee which met at DHRS District III that Intervenor's bid be selected was forwarded to DGS in Tallahassee through the Director of DHRS's General Services in Tallahassee on December 22, 1983. The terms of the successful bid and the reasons for its being considered lowest and best are discussed below. The successful bid for the lease in question, lease number 590:8030, was, upon completion of the committee's evaluation, also evaluated by Mrs. Goodman in the Bureau of Property Management of DGS. She also considered the McGunn bid as the lowest and best of the eleven non-disqualified bids. In that regard, not only Mr. McGunn's bid but all of the twelve bids received were considered and reviewed not only at the local level but at DHRS and DGS Headquarters as well. In her evaluation of the proposal and the bids, Mrs. Goodman considered the documentation submitted by DHRS. This included a letter of recommendation supported by a synopsis of all proposals, the advertisements for bids, and any information pertinent to the site selection process. The letter from DHRS dated December 22, 1983, which recommended award of the lease to Mr. McGunn, included Mr. Litza's December 21, 1983 analysis and recommendation letter which, itself, was attached to McGunn's primary bid documents. Her analysis did not include a prior award recommendation and analysis from Mr. Litza, dated December 8, 1983. It also did not include the site plan, the floor plan for the proposed building, or a survey of the site, but these areas are considered to be within the discretion of the leasing agency. Their absence is not considered to be particularly significant. In her analysis, Mrs. Goodman found that Petitioner's bid was also responsive. However, comparing it with Mr. McGunn's bid, she and her staff found that the latter was the lowest bid submitted. The determing factor in her decision was cost. In determining that McGunn's bid was the lowest as to cost of all bids, Mrs. Goodman compared the average rate per square foot per year for each. This did not take into consideration proration of costs per year, but strictly the average over the fifteen years of the term of the lease (10 year basic plus 5 year option) . According to Mrs. Goodman, this same method of calculating cost has been used in every lease involving a turnkey situation and in fact in every lease since 1958 - as long as she has been with DGS. This particular method, admittedly, is not set forth in any rule promulgated by DGS. However, the agencies are instructed by DGS to advertise and bidders to bid on an average square foot basis, the basis utilized by Mrs. Goodman and her staff in analyzing the bids submitted. In that regard, the request for proposals does not, itself, indicate how the calculation of lowest cost would be made by DHRS and DGS but it does tell prospective bidders what information to submit. This procedure has been followed exclusively in situations like this for many years and many of the bidders have bid before using this same system. While Mrs. Goodman is not certain whether TSU has ever bid before, using this system, she does not consider it to be unfair because all bidders are considered on the same footing in an evaluation. They are notified of what information to submit and if they do so, their information will be considered along with all other bidders. Further, anyone who inquires as to the basis for evaluation will be given a straight and complete answer as to the method to be used. In the instant case, DHRS followed procedure for solicitation and evaluation utilized in the past and DGS followed its own policy in evaluating the submissions. In short, the primary consideration for DGS is the price factor and all other factors are considered to be within the expertise of the requesting agency. In Mrs. Goodman's opinion, based on the fact that she worked with the Florida Legislature on the development of the controlling statute, and helped develop the existing rule within DGS, that was the intent of the Legislature. Consequently since the statute requires award to the lowest and best bidder, it can be said that in this case the term "lowest" falls within the purview of both DHRS and DGS but "best" is solely within the purview of DHRS. Therefore, utilizing the lowest and best criteria and accepting the fact that the lowest bid may not be the best bid, the determination of "non-best" should be based on the reasonable "end objective" of the agency and need not be based on a criterion which is set forth in the bid proposal. In other words, it is not necessary for the agency to set forth the manner of evaluation it will use or the factors it will consider, according to Mrs. Goodman. With regard to the bid and evaluation committee process, Mr. Litza, the facilities manager for DHRS in Gainesville, was involved in putting together the bid package along with Mr. George Smith from Tallahassee, Litza's predecessor in the job in Gainesville. He worked with Mr. Smith in order to take advantage of Smith's experience in evaluating bids for leases. So far as he knew, the bid package contained minimum standards for all parts of the bid, and the package was, in fact, approved by officials in Tallahassee before being released. While no particular factors were identified to prospective bidders as being significant, Mr. Litza did conduct a bid conference for them prior to the date the bid was due and was available to answer any questions that prospective bidders might have. He did not receive any questions regarding the significance of any particular factor from any bidder. The bids were advertised and when received, were opened and read properly in accordance with the terms of the solicitation. When the bids were received and opened, it was seen that Mr. McGunn had submitted five different bids for the same project. Litza had not been confronted with this situation before and asked Mr. Smith what to do about it. Mr. Smith's reply was to put all five McGunn bids in with the rest and extract the lowest five of all bids. When this was done, Mr. McGunn was shown to have submitted two of the lowest five bids. In determining which were the lowest five bids, Mr. Litza utilized the average cost per square foot formula utilizing therein the entire 15,772 square feet authorized for the project. Once the five lowest bids were determined, Mr. Litza selected an evaluation committee made up of local Palatka DHRS supervisors except for the fiscal member, Mr. Foust, Mrs. Shinholster, Litza's secretary and Litza himself. He gave each of the members a score sheet with point values for each area. Each member filled out the form independently. Though he gave very little briefing to the evaluation committee, he admits that he did, in advance, tell each member that Mr. McGunn was the lowest bidder and should be awarded the highest points for criteria number 1, which related to cost. There were several irregularities in Mr. Litza's processing of the evaluation committee's results. For example, on the evaluation of the file conducted by member Sheryl Dollar, regarding criteria number 2, which relates to the conformity of space offered to the specific requirements contained in the invitation to bid (with a weight of 25 points), Mr. Litza admitted he lowered Mrs. Dollar's point award in that area from 35 to 25 without first checking with her to insure that his action would meet with her approval. While this is irregular, it is of little or no consequence since - the maximum number of points that could be given for that particular item was 25 and Mr. Litza's actions did not reduce that member's award to less than the maximum allowable. He contends that his action was based on what he considered to be a mistake on her part. In another apparent irregularity, Mr. Litza prepared a recommendation letter based on his and the other committee members' evaluation of the files to DHRS Headquarters in Tallahassee on December 8, 1983. In that letter, be indicated that McGunn would provide gas heat for the proposed building for free. Though McGunn had not specifically stated this, he implied it from the energy features paragraph in the Intervenor's bid. On the other hand, the bid by TSU contained an express comment offering to pay the utility charges. This specific provision was overlooked and omitted from the evaluation and report to Tallahassee by Litza, who contends that this omission was merely an oversight. There are other discrepancies as well. In his testimony, Mr. Litza indicated Mr. McGunn proposed to build one building but his letter of December 8th and that of December 21, 1984, both reflect two buildings. Here again, Mr. Litza explains this as the result of his being confused. Nonetheless, this erroneous information was referred to Mrs. Goodman at DGS. This is significant in that at the evaluation committee meeting, when the forms were given out, several of the members expressed a preference for a two-building complex. After the award, Mr. Litza secured agreement from McGunn to build two buildings. Mr. Litza admits that much of this was done in an attempt to insure that McGunn, as the low bidder, got the award. Mr. Litza equated the lowest bid with the best and had Petitioner been the low bidder, he contends he would have done the same thing. In most areas, he would not, however, have given Petitioner's four-building concept a high score because of the increased heat and air requirements of four buildings. Mr. Litza also downgraded Petitioner on that bid criteria which relates to the proximity of offered space to the clients to be served because Petitioner's site, he contends, was too close to the clients to be served. In this case, a housing project for low income families which make up much of the clientele to be served by DHRS, was located across the street from the proposed site offered by the Petitioner. Mr. Litza contends that he was thinking of the potential damage to the building because of increased activity by virtue of the facility being so close. There were other questionable areas in Mr. Litza's testimony. For example, he testified that though Petitioner provided 15 more parking spaces than Intervenor, this would result in mud being tracked in from the adjacent dirt road 200 feet away in greater quantities than in Intervenor's proposal. He also considered positively that the Intervenor's proposed site was closer to a restaurant than that of the Petitioner. Though it was recommended by DHRS Headquarters in Tallahassee that only two of the committee members be from the Palatka office, Mr. Litza disregarded that advice because, he contends, there was a morale factor in that office and the people assigned there wanted to have a part in this decision. Because of this, he allowed Ms. Stouffenberg to put five extra members of her staff on the committee. Nonetheless, the evaluation committee serves only in an advisory capacity. Its recommendation is no more than an advisory opinion. The ultimate decision as to which of the bidders should be awarded the contract is made at DHRS Headquarters in Tallahassee. Ms. Shinholster, a Clerk IV in the DHRS Gainesville office, who works as a secretary to Mr. Litza and several others, was advised she would be on the committee for the evaluation at the same time she was given the bid file. She did not get an opportunity to meet with other committee members to talk about the standards to be used, nor was she given any standards by which to evaluate the files. All she was told by Mr. Litza was that McGunn was the lowest bidder. She cannot explain how she accorded points on her evaluation sheets except that she gave the low bidder the highest number of points. Mr. George Smith, a Senior Analyst with DHRS in Tallahassee, relied on Mr. Litza's input when he made his recommendation to his superiors that the award should be made to McGunn. He also formulated his own opinion, based on his own analysis of the bids. He resolved any dispute regarding cost in favor of Mr. McGunn on the basis of the average rental, and regarding space, in favor of McGunn on the basis of the number of buildings. Dr. Perry, an economist with the University of North Florida, testified to the Federal Government's policy regarding the desirability of using the present value of money methodology and the determination of an acceptable discount rate or index in calculating the actual cost of the bids. Both experts, Dr. Perry and Dr. Scott, who testified for DGS, agree that the present value methodology is valid and presents a more accurate analysis of cost than the average rental cost methodology which does not utilize this theory. The major difference between the two was primarily in the percentage to be utilized in applying the discount rate. Whereas Dr. Perry adopted the Federal policy and suggested a 10 percent discount rate, Dr. Scott testified that a more viable percentage rate in November, 1983, at the time the award was to be made, would have been 3.3 percent. If the 10 percent rate were used, then the Petitioner's bid would be the lowest of all submitted. On the other hand, if the 3.3 percent rate were used, Intervenor's bid would be the lowest. If a different discount rate, that of 5.7 percent were to he used, the bid of Elizabethan Development Corporation would be low. It is at about the 6 percent point and above that Petitioner's bid becomes the lowest. Nonetheless, the State has not adopted the present value of money theory and the policy followed by the State is not to consider that methodology in analyzing costs. State policy is to use only the average rental methodology. There are no written instructions (rules) on evaluating bids for leases of this nature. Oral instructions given by DGS to each agency are that the average rate per square foot is to be computed using, if the square footage is constant, for each year of the lease, the basic square footage requested, multiplied by the rental rate proposed for each year of the basic lease, divided by the number of years. If the square footage is not constant in every year of the lease, evaluators are directed to apply the rate per square foot proposed in each year to the square footage to be utilized in that year, total up the annual rentals, total up the square footage involved, and divide to arrive at the average rate per square foot per year. Utilizing one or the other of those two methods in evaluating both the McGunn and the TSU bids, it becomes clear that the McGunn bid results in an average of $8.86 cost per square foot per year and the TSU bid an average of $9.58 per square foot per year. Recalculation of DHRS' evaluation by DGS showed the DHRS' figures as stated above were correctly arrived at. This procedure is followed on all turnkey and non-turnkey leases in the State of Florida. The reason the State uses this process instead of the present value of money process is because it is easy. DGS statistics indicate that most landlords in the approximately $32,000,000 worth of leases presently existing with the State are "Mom and Pop" landlords. These people are not normally trained lease evaluators. By using the straight average rental rate method, there are no arbitrary variables. It has always worked because people can understand it and all agencies which lease property in the State of Florida follow this procedure. Also, this procedure does not require computer-based calculations, and it does not require economists to work with it. Both latter reasons are amplifications of the first. In Mrs. Goodman's estimation, if the present value of money system were to be adopted, her division would have to hire at least two $30,000 per year economists and buy an in-house computer to operate the system. This additional cost, she believes, would far outweigh the paper savings to be realized by utilizing the present value of money system. As of the hearing date, considering all the factors, in Mrs. Goodman's opinion, DGS would nonetheless still recommend Mr. McGunn's bid as the lowest and best bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore RECOMMENDED that DHRS lease Number 590:8030 be awarded to Kenneth R. McGunn. RECOMMENDED this 5th day of September, 1984, in Tallahassee, Leon County, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of September, 1984. COPIES FURNISHED: Donald E. Holmes, Esquire William E. Townsend, Jr., Esquire Post Office Drawer D Palatka, Florida 32078-0019 James A. Sawyer, Jr., Esquire District III Legal Counsel Department of Health and Rehabilitative Services 1000 Northeast 16th Avenue Gainesville, Florida 32609 Stephen J. Kubik, Esquire Department of General Services Room 452, Larson Building Tallahassee, Florida 32301 H. Allen Poll, Esquire 112 South Main Street Gainesville, Florida 32601 Linda C. McGurn, Esquire 1717 Northeast 9th Avenue Gainesville, Florida 32301 David H. Pingree, Secretary Department of Health and Rehabilitative Services 1321 Winewood Boulevard Tallahassee, Florida 32301 Ronald W. Thomas, Executive Director Department of General Services 115 Larson Building Tallahassee, Florida 32301
The Issue The issue is whether Respondent is guilty of obtaining his license by fraud, misrepresentation, or concealment, in violation of Section 475.25(1)(m), Florida Statutes.
Findings Of Fact At all material times, Respondent has been a licensed real estate broker, holding license number 0500228. Respondent’s licensing cycle ends on March 31 every two years. He duly renewed his broker’s license prior to its expiration on March 31, 1994. During the ensuing two-year licensing term, Respondent executed on January 1, 1996, a Request for License or Change of Status and submitted the form to Petitioner. The purpose of submitting the form was to notify Petitioner that Respondent had adopted a corporate form of doing business as a real estate broker. Section A of the form contains a series of options. Respondent selected “other” and wrote in “change to corp.” Section B contains identifying information, and Respondent completed this section. Section C is irrelevant to the change that Respondent was making, and he did not fill in this section. The instructions for Section A direct the person filing the form as follows: “If this is a renewal of your license, it must be accompanied by the required fee and sign this: I hereby affirm that I have met all statutory and rule requirements regarding education for license renewal.” Respondent signed this statement even though he was not seeking a renewal of his license. The instructions for Section B told the person filing the form how to complete Section B. But these instructions required no representations. The next form generated in this case was another renewal notice, as Respondent’s license neared the end of its term, which expired March 31, 1996. This form states: “By submitting the appropriate renewal fees to the Department . . ., a licensee acknowledges compliance with all requirements for renewal.” By check dated December 30, 1995, Respondent timely submitted his license renewal fee of $95 in response to the renewal notice. He was unaware at the time that he had not met the continuing education requirement for relicensing, which called for 14 hours of education. In reliance on the implied representation that Respondent had completed the required continuing education, Petitioner renewed Respondent’s license. Later, during a random audit, Petitioner discovered that Respondent had not completed the necessary courses and commenced this proceeding. Respondent was cooperative during the audit. Upon discovering that he had not complied with the continuing education requirement, he promptly undertook the necessary coursework, which he completed by August 6, 1996.
Recommendation It is RECOMMENDED that the Florida Real Estate Commission enter a final order dismissing the administrative complaint against Respondent. ENTERED in Tallahassee, Florida, on June 4, 1997. ROBERT E. MEALE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings on June 4, 1997. COPIES FURNISHED: Attorney Andrea D. Perkins Department of Business and Professional Regulation Division of Real Estate Legal Section 400 West Robinson Street Suite N-308A Orlando, Florida 32801 Frederick H. Wilsen Frederick H. Wilsen & Associates, P.A. Law Office of Gillis & Wilsen 1415 East Robinson Street Suite B Orlando, Florida 32801 Lynda L. Goodgame General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Henry M. Solares Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900
The Issue Petitioner and Lyell Hintz protest the Department's intent to award the bid for Lease No. 550-0209 to Southeastern Investment Properties, Inc. Issues derived from the pleadings, the joint prehearing stipulation and the evidence and argument at hearing are: Whether Petitioner has standing to protest the bid award; Whether Petitioner and Lyell Hintz have waived the right to contest evaluation criteria; If not, whether those criteria are valid; Whether the Respondent has properly applied the criteria to the bid proposals; Whether Southeastern's bid was nonresponsive; Whether Southeastern changed its bid after opening; Whether Petitioner's bid was defective for failure to include a waiver of existing lease; Whether the bid should be awarded to Lyell Hintz or Petitioner; and Whether all bids should be rejected and the lease re-bid.
Findings Of Fact The Bid Solicitation On or about January 31, 1991, the Florida Department of Transportation (DOT) advertised its request for proposals (RFP) for a full service lease for its District Five, Operations and Planning Office, Public Transportation Office and Construction Office. The RFP is identified as lease #550:0209. Specifications include net square footage of 13,640 + 3% (13,231 - 14,049), divided into 90% office and 10% storage space, to be available by July 1, 1991, or within 30 days of notice of bid award, whichever occurs last. The space is to be available in a northern section of Orange County designated on a map attached to the RFP, in the Winter Park/Maitland/Orlando area surrounding the intersection of Lee Road and I-4. The following evaluation criteria (award factors) are included in the RFP: The successful bid will be that one determined to be the lowest and best. All bids will be evaluated based on the award factors enumerated below: Rental, using total present value methodology for basic term of lease... (weighting: 15) Conformance of and susceptibility of the design of the space offered to efficient layout and good utilization and to the specific requirements contained in the Invitation to Bid (not to exceed a weight of 10 award factors). (weighting: 10) Provision of the aggregate square footage on a single floor. Proposals will be considered, but fewer points given, which offer the aggregate square footage in not more than two floors. (weighting: 25) 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 operation planned for the requested space. (not to exceed a weight of 10 award factors) (weighting: 10) Offers providing 100 s.f. of street-level secured storage. (weighting: 10) * * * [deleted criteria given 0 weight and not relevant] Option period rental rate proposed is within projected budgetary restraints of the department. (weighting: 15) Accessibility to an I-4 Interchange. (weighting: 15) total award factors = 100 (Joint Exhibit #1, p. 7 of 10) Paragraph D.1., General Provisions, includes a notice that failure to file a protest within the time prescribed in Section 120.53(5), F.S., constitutes a waiver of proceedings under Chapter 120, F.S. The notice references an attachment which includes the text of Chapter 90-224, Laws of Florida, requiring posting of a bond at the time of formal written protest. Paragraph D.6.A., General Provisions states: Each proposal shall be signed by the owner(s), corporate officers, or legal representatives(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. If the agent is to execute the lease, the authority must be supported by a properly executed Power of Attorney. If the Bid Submittal is offered by anyone other than the owner or owner's agent, proof of the bidder's authority to offer the facility, i.e., copy of bidder's Option to Purchase, must accompany the proposal. This option must be valid through the validity date established for bids. If a corporation foreign to the State of Florida is the owner of record, written evidence of authority to conduct business in Florida must accompany the Bid Submittal. If there is an existing lease extending beyond the required availability date for all or any portion of the premises being offered to the agency a release of the applicable lease must accompany the Bid Submittal. (Joint Exhibit #1, p. 8 of 10) Paragraph D.8., General Provisions, provides the Department reserves the right to reject any and all bid proposals, waive any minor informality or technicality in bids, to accept that bid deemed to be the lowest and in the best interest of the state, and if necessary, to reinstate procedures for soliciting competitive proposals. Paragraphs D.12 and 13, General Provisions, establish a March 4, 1991 bid opening and a February 11, 1991 preproposal conference, respectively. On the RFP/Bid Proposal Submittal form, below the bidder's signature space, there is a list of required attachments and notice that failure to include such, if applicable, "...shall render the proposal nonresponsive and such proposal shall be rejected". (Joint Exhibit #1, p. 10 of 10) The relevant attachments include a map with location of the facility, photograph, floor plan, authorization as agent for bidder, and release of existing leases. The RFP/Bid Proposal Submittal Form was furnished to the DOT by the Department of General Services (DGS). As permitted, DOT made some modifications to the criteria to meet the specific needs of the agency. No protests of the bid solicitation were filed by any party. The Bid Responses Four proposals were timely received at the bid opening deadline, March 4, 1991: Clayton's Realty (Petitioner) submitted two proposals, Lyell Hintz submitted one proposal, and Southeastern Investment Properties, Inc., submitted one proposal. Clayton's bid for its building at 611 Wymore Road, Winter Park ("Clayton Bldg.") offers 13,984 square feet for $1,136,200.00 for the five-year rental period and $1,398,400.00 for the option years. Some of DOT's offices are already in this building. Clayton's bid for its building at 5600 Diplomat Circle, Orlando, ("Promenade Building") offers 14,049 square feet at $965,868.75 for the 5-year rental term, and $1,229,287.50 for the option period. Both of Clayton's buildings offer space on two floors. Lyell Hintz offers 14,049 square feet at 1241 S. Orlando Avenue, Maitland. The five year rental cost is $895,623.75, and the option period rental is $1,123,920.00. All of the space is offered on a single first floor. Southeastern Investment Properties, Inc., offers 14,049 square feet in the Adlee Building at 5151 Adamson Street, Orlando, for $1,009,139.67 for the 5- year rental term and $1,288,012.32 for the option period. Southeastern contends that it is offering 100 square feet of storage space on the first floor and the remainder of space on the second floor. Committee Analysis of the Bids An evaluation committee comprised of four DOT employees met on March 6, and March 12, 1991, to evaluate the bids. Their evaluation included a visit to each site with pre-established questions. The four employees were Nancy Houston, District Five District Director for Planning and Public Transportation; Donna Sovern, Ms. Houston's Administrative Assistant; Jim Hamelin, Resident Engineer in charge of construction in District Five; and Steven J. Nunnery, Office Manager for District Five Construction. The committee had prior experience in the leasing process on only one occasion. In November 1990, this same lease #550:0209 was bid. Lyell Hintz and Southeastern were the bidders. All bids were rejected after it was discovered that Southeastern's bids included typewritten language added by the bidder and in conflict with standard requirements. No protest was filed from that agency decision. In the November bid the committee simply utilized the criteria provided in the DGS packet. Later the Committee learned that criteria could be modified by the individual agency. With this understanding, the Committee changed the criteria for the March 1991 bids to provide that space be offered on no more than two floors, rather than two buildings; that points would be awarded for offers of 100 square feet of street level storage space, rather than all space on the street level; and that accessibility to an I-4 Interchange would be an additional evaluation factor. The committee felt these criteria appropriately addressed agency need to collocate programs and share facilities, to have ground floor storage for heavy samples and equipment, and to provide easy access by field staff and others using I-4 regularly. The committee devised a methodology for awarding points to each bidder in each category described in paragraph 3, above. The methodology is stated in the minutes of the evaluation committee meeting dated March 6, 1991. For item no. 1, the committee awarded 15 points (the highest) to the lowest bid. The percentage of difference between each bid and the lowest bid was multiplied by 15 to determine the point value. Hintz received 15 points; Clayton (Promenade Building) received 14 points; Southeastern received 13 points; and Clayton (Clayton Building) received 12 points. For item no 2, the committee stated it would take into account the design and other factors in the description of this item, including the parking requirement addressed in the invitation to bid. Southeastern received the maximum, 10 points; Hintz received 8 points; and the two Clayton buildings received 6 points each. As part of the November bid process, when the agency initially intended to make the award to Southeastern, Nancy Houston's husband, an architect in private practice, prepared without charge a layout of Southeastern's building to see if Southeastern could meet DOT's needs. At Clayton's and Southeastern's requests, that layout was provided to the bidders, except for Hintz. Since Hintz' building is basically a shell, and he assured DOT he would make the renovations they needed, Ms. Houston did not feel that he needed the floor plan. After the bids were rejected in November, the layout became a public record, available to anyone upon request. However, Ms. Houston opined at hearing that they could not get a good layout that would work for the Hintz building. This contradicts Mr. Hintz' testimony that the suggested floor plan attached to the RFP could easily fit in his building. The floor plan attached to the RFP is not the same floor plan prepared by Ms. Houston's husband for the Southeastern building and the fact that Hintz' building is a shell capable of a vast variety of layouts impeaches Ms. Houston's opinion. Item no. 3 requests aggregate square footage on a single floor, with fewer points for space on two floors. The committee methodology was to give 25 points for space on one floor and "reduction given accordingly" for two floors. (Joint Exhibit #6, attachment A, page 1) Hintz and Southeastern were each granted 25 (maximum) points. Although various committee members testified that two floors should have warranted 1/2 the points, or 13, Clayton's buildings were awarded 16 points each. Southeastern is not proposing to provide all space on one floor, as it is offering storage on the first floor and office space on the second floor. The committee considered this worthy of full points, as all of the office space is on one floor. Item no. 4 is related to environmental factors such as aesthetics of the building and surrounding areas. The committee methodology states that aesthetics of the building and area would be considered along with "...the economical factor relating to the conduct of our everyday activities from and in each space proposed." (Joint Exhibit #6, Attachment A) Southeastern was awarded 10 points (maximum); Clayton's Clayton Building and Promenade Building were awarded 6 and 8 points respectively; and Hintz was awarded 3 points. Item no. 5 relates to provision of 100 square feet of storage on the street level. The committee methodology provides that full ten points will be awarded if this is met; if not, the score would be "adjusted accordingly". Each bid was awarded the full 10 points. The committee members learned that Southeastern was willing to provide street level storage when they made their site visit and inquired. The space was not described in Southeastern's written proposal. Item no. 11 relates to rental cost for the option period. The methodology adopted by the committee for this item is the same as for item no. Hintz, the lowest bidder for the option term, received 15 points; Clayton's Promenade Building received 14 points; Southeastern received 13 points; and the Clayton Building received 12 points. Item no. 12, accessibility to an I-4 Interchange, is worth 15 points maximum. For its methodology the committee devised a formula of granting the closest building a full 15 points. The I-4/Lee Road interchange was selected as the reference hub. The Clayton Building, .2 miles from the interchange, was given 15 points. Southeastern's building .6 miles away, three times as far, was given 1/3 value, 5 points; the Promenade Building, .4 miles away, or twice as far, was given 1/2 full value, or 7.5, rounded to 8 points; and Hintz' building, 2 miles away, or 10 times as far, was given 1.5 points, rounded to 2. The total values thus awarded by the committee were: 86 points to Southeastern; 78 points to Hintz; 77 points to Clayton (Clayton Bldg.); and 76 points to Clayton (Promenade Bldg.). The committee, after meeting on March 6th and making its awards, decided to meet again on March 12th, after obtaining more information on phone service, zoning regulations, crime, and bidder's previous experience in renovations. Although some additional information was obtained and the committee did meet again, it determined that the additional information (not clearly related to any of the seven criteria above) did not warrant changing any of the scores. The committee recommended award of the lease to Southeastern. Southeastern's Bid Allegedly Defective Southeastern's bid is signed by Gilmore E. Daniel, Vice President of Southeastern Investment Properties, Inc., as agent for the owner, Cynwyd Investments, a partnership which operates under about 150 different partnerships. The building in issue is owned by an entity designated "Adlee Building, Cynwyd Investments General Partnership". Attached to Southeastern's bid is a letter on Cynwyd Investments letterhead, dated February 7, 1991, addressed to Mr. Gil Daniel, re: Adlee Building, 5151 Adamson Street, Orlando, Florida, stating: As leasing and managing agent for the above captioned property, you are hereby authorized to negotiate on our behalf with the State of Florida in order to procure the Department of Transportation as a tenant in our building. (Joint Exhibit #5) The letter is signed by Stephen Cravitz, CSM. Although the language of the letter is inartful (the agent was not "negotiating" a lease), the intent is plain on its face that the agent procure a lease. This is sufficient to convey authority for Gil Daniel to act on behalf of the owner. The requirement of the RFP, paragraph 6.A. is met. (see paragraph 5, above) There are several tenants currently occupying space proposed to be leased to DOT under lease no. 550:0209. There are three "agreements" attached to Southeastern's bid proposal for three tenants. Each agreement provides the tenant will move by April 15, 1991 "...contingent upon the landlord being the successful bidder for the State of Florida Department of Transportation lease no. 550:0209, and having an executed lease with the State." (Joint Exhibit #5) The tenants have not moved, but neither has the contingency been satisfied; and when or if it is, the tenants will move. These agreements are sufficient "release" to meet the requirements of RFP paragraph 6.A. The remaining tenant does not have a lease. Clayton's Bid Allegedly Defective Clayton's bids did not include any releases from tenants. There is a tenant currently in part of the space offered in the Clayton Building. There is also a lease agreement dated August 28, 1989, between the Claytons and Canam Steel Corporation describing a lease term of three years and termination date of September 14, 1992. Edward Fielding, Jr. is Director of Operations in the Leasing Department for Charles and Malcolm Clayton. He is well aware of the requirements for state leasing as he and the Claytons have been involved for several years in leasing space to state agencies. Canam Steel Corporation provided a letter in April 26, 1990, stating that it is closing its Orlando operation and requesting that its lease be terminated. It still occupies the space, but Edward Fielding is assured that it wishes to leave, and will do so immediately upon approval by Clayton. The lease and release was not included with the bid packet, as Fielding properly determined that it was no longer binding on the landlord. The Clayton Building bid does not violate the requirement of RFP, Paragraph 6.A. F. Alleged Bias of the Committee in Favor of Southeastern and Improper Award of Points Hintz and Clayton contend that the bid process was thoroughly tainted with a bias in favor of an award to Southeastern. Clayton did not respond to the November bid; Hintz did, and did not protest the earlier process, although he apparently brought to DOT's attention the language added to Southeastern's bid response that led to the rejection of all bids and reinitiation of the process. The committee changed its evaluation criteria when it learned that DGS's form criteria are not binding on the agency. The committee's alterations and addition of the I-4 accessibility requirement were intended to better meet the specific needs of the programs that would be using the space. The changes did not specifically benefit Southeastern; it was neither the closest nor next closest building to the I-4 interchange. For those criteria which could be objectively quantified, such as rental rate and proximity to I-4, the committee attempted in good faith to devise formulae. That the point spread for the I-4 criteria was substantially wider than for rental rates does not invalidate those formulae. For those criteria requiring a subjective analysis, the conformance/design and environmental factors, Petitioner and Hintz failed to prove the committee's point awards were patently wrong or fraudulent. One committee member, James Hamelin, admitted that Clayton should have received 13, rather than 16 points for providing space on more than one floor, but that error, if it indeed was an error, inured to the benefit of Petitioner and made no impact on Hintz, the next highest scorer. None of the floor plans presented by the bidders with their proposals are attached to the exhibits received in evidence, and those floor plans are not part of the record in this proceeding. One committee member, Donna Sovern, admitted that all of the square footage proposed by Southeastern was initially on the second floor. When the site visit was made and the committee discussed the space, Southeastern offered 100 square feet of storage on the first floor. (Transcript, pp 200-201) Because of this, Southeastern was awarded the full 10 points for Item No. 5, requiring 100 square feet of street-level secured storage. Allowing Southeastern to change its bid thus provided an advantage of 10 additional points. Assuming that the change was appropriate, Southeastern should not have also received the full 25 points for Item No. 3, provision of aggregate square footage on a single floor, since the remainder of its space is on the second floor. The award of points in these two items by the committee is inconsistent and erroneous. Page 4 of 10 of the RFP describes the space to be included in the 13,640 square feet to be leased. The description includes storage areas. (Joint Exhibit #1) The bidders were on notice that "aggregate" square footage includes storage space. The total number of points awarded to Southeastern must be reduced by either 10 (the after-the-fact storage space on the first floor) or 9 (the difference between the full 25 points and 16, the points awarded to Clayton for space on two floors). This results in a total of either 76 or 77 points for Southeastern. In either case, Hintz becomes the highest scorer, and Clayton and Southeastern are tied.
Recommendation Based on the foregoing, it is hereby, RECOMMENDED: That the agency enter its Final Order awarding lease no. 550:0209 to Lyell Hintz. DONE AND RECOMMENDED this 12th day of June, 1991, in Tallahassee, Leon County, Florida. MARY CLARK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of June, 1991. APPENDIX TO RECOMMENDED ORDER The following constitute specific rulings on the findings of fact proposed by the parties: Petitioner's Proposed Findings Adopted in paragraphs 1 and 7. - 5. Adopted in paragraph 11. Adopted in paragraph 20. Adopted in paragraph 31. Adopted in summary in paragraph 18. Rejected as immaterial. and 11. Adopted in part in paragraph 5, otherwise rejected as immaterial. Southeastern's name is typewritten. Rejected as immaterial. Adopted in part in paragraph 31, otherwise rejected as immaterial. and 15. Adopted in part in paragraph 33, otherwise rejected as immaterial. Adopted in paragraphs 17 and 18. Rejected as immaterial and irrelevant. Adopted in paragraph 19. Rejected as immaterial. Adopted in part in paragraphs 20 and 27, otherwise rejected as unnecessary. Rejected as unnecessary. Adopted in substance in paragraphs 21, 26 and 27. Rejected as unnecessary. Adopted in paragraph 37. Adopted in part in paragraph 29, otherwise rejected as irrelevant as points were not awarded or subtracted for the additional factors. Rejected as irrelevant. Lyell Hintz' Proposed Findings Adopted in paragraphs 1 and 2. Adopted in paragraph 11. Adopted in paragraphs 13, 15, 16 and 21. Adopted in paragraph 3. Adopted in paragraphs 17 and 18. Adopted in paragraph 5. Adopted in paragraph 8. Rejected as unnecessary. Adopted in paragraphs 31 and 32. - 11. Rejected as immaterial and contrary to the weight of evidence. The letter attached to the bid was sufficient authority. 12. Rejected as contrary to the weight of evidence. 13. and 14. 15. Adopted Adopted in in paragraph 25. paragraphs 3 and 25. 16. Adopted in paragraph 38. 17. - 21. Adopted in paragraphs 3 and 22. 22. Rejected as argument rather than finding of fact. 23. Rejected as immaterial and unsupported by the evidence. 24. Adopted in paragraph 3. 25. - 34. Adopted in summary in paragraphs 23, 14 and 16. 35. and 36. Adopted in paragraph 38. Adopted in paragraphs 3 and 24. - 50. Rejected as immaterial. According to the evidence these factors did not change the committee's evaluation. 51. - 53. Rejected as immaterial and, as to the DGS requirement, unsupported by the record. Respondent and Southeastern's Proposed Findings Adopted in paragraph 1. Adopted in paragraph 9. Adopted in paragraph 11. Adopted in paragraph 10. Adopted in paragraph 17. Adopted in paragraphs 18 and 19. Adopted in paragraph 3. Adopted in part in paragraph 3, otherwise unnecessary. Adopted in paragraph 23. Rejected as unnecessary. Adopted in paragraph 25. Adopted in paragraph 19. Adopted in paragraph 27. Adopted in paragraph 3. Adopted in paragraph 28. Adopted in paragraph 24. Rejected as contrary to the evidence, specifically the RFP which unambiguously included all storage and office space in the "aggregate." - 19. Rejected as irrelevant or unsupported by the record. Adopted in paragraph 31. Adopted in paragraph 33. Adopted in part in paragraph 34, but the letter requesting its lease be terminated is sufficient release. Adopted in part in paragraph 12. Rejected as unnecessary. COPIES FURNISHED: Marvin L. Beaman, Jr., Esquire 605 North Wymore Road Winter Park, FL 32789 Wings L. Benton, Esquire P. O. Box 5676 Tallahassee, FL 32314-5676 Susan P. Stephens, Esquire Dept. of Transportation 605 Suwannee Street Tallahassee, FL 32399-0450 Kenneth M. Meer, Esquire 423 Country Club Drive Winter Park, FL 32789 Ben G. Watts, Secretary Attn: Eleanor F. Turner, M.S. #58 Dept. of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0458 Thornton J. Williams, General Counsel Dept. of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0458
Findings Of Fact On or about December 29, 1981, the College solicited sealed bids for construction of alterations and additions to the Technical and Gymnasium Buildings located on its campus in Madison, Florida. In response, seven general contractors submitted bids. (P-1, P-2, P-3.) Bids were publicly opened on February 9, 1982. Griffin Construction, with a bid of $536,575, was the apparent low bidder; the second lowest bidder was Long Contractors, with a bid of $539,512. (Testimony of Griffin, Sims, Rutherford; P-3, P-4, P-5.) After the low bid was identified, Tom McClanahan, representing Long Contractors, asked that the subcontractor list accompanying the low bid be opened. Griffin Construction's subcontractor list was then opened. McClanahan asked if the license and charter numbers of the subcontractors were listed. 2/ Upon learning that these numbers were not included on Griffin Construction's subcontractor list, McClanahan protested. (Testimony of Sims, Rutherford, Griffin.) At its February 15, 1982, meeting, the College District Board of Trustees ("Board") rejected the low bid of Griffin Construction on the sole ground that the omission of subcontractor license and charter numbers constituted a failure to comply with the conditions of the bid documents. 3/ The Board then voted to award the contract to Long Contractors, the second lowest bidder, on the ground that it was the lowest bid conforming to the bid documents. In so doing, the Board followed the College president's recommendation--a recommendation based on his belief that the non-complying bid must be rejected, that it did not involve a matter of Board discretion. (Testimony of Sims, Rutherford, Griffin; Stipulation of Parties; P-41.) The bid specifications contain instructions to bidders requiring "each Bidder . . . [to] submit with his proposal a list of the subcontractors who will perform the work . . . as indicated by the `List of Subcontractors' form." (P-1, P-2.) The instructions further provide: The applicable subcontractor license registration or certification number must be noted on the bid opposite his name, and in the event that the subcontractor is a corporation, his State Corporate Charter number shall also be noted. If the subcontractor is an out of state firm, their Charter number with the Secretary of State to do business in the State of Florida should also be noted. The "Listing of Subcontractors" form provided with the specifications contains column headings for the names and addresses of the subcontractors but does not contain a separate heading for the requested license or corporate charter numbers. 4/ The form states that the subcontractor list "is an integral part of the bid." (P-1, P-2.) The bid instructions further require bidders to evaluate and determine the qualifications of their listed subcontractors. The bidder shall have determined to his own complete satisfaction that a listed subcontractor has been successfully engaged in this particular type of business for a reasonable length of time, has successfully completed installations comparable to that which is required by this agreement and is qualified both technically and financially to perform that pertinent phase of the work for which he is listed. (P-1, P-2.) The bid documents expressly reserve to the College the right "to reject any or all bids, and to waive informalities." (P-1 P-2.) No bidder correctly listed the required license and corporate charter numbers on its "Listing of Subcontractors" form. Griffin Construction. Griffin failed to include any license or corporate charter numbers. However, by subsequent letters dated February 9 and February 18, 1982, and at hearing, it supplied the required subcontractor license and charter numbers. Long Contractors. Long listed for its roofing subcontractor a sheet metal registration number, not the required roofing license number. [A sheet metal registration does not qualify a contractor for roofing work. See, 489.105, 489.113, Fla. Stat. (1981).] For its electrical subcontractor, Long omitted the prefix, "ER" from the listed number. For its plumbing subcontractor, Long listed a mechanical registration number instead of the required plumbing certification or registration number. [A mechanical registration does not qualify a contractor to perform plumbing work. See, 489.105, 489.113, supra.] Of the four areas requiring state licenses--roofing, heating and air conditioning, electrical, and plumbing--Long listed correctly only the registration number for its heating and air conditioning subcontractor. Long incorrectly listed No. FO6962 as the corporate number of Gandy Enterprises, its painting subcontractor. This is the number of a related corporation, Industrial Coatings, Inc. Remaining Bidders. Of the five other general contractors submitting bids, two-- Richard Walker Construction Company and GRC Contracting, Inc.--omitted all subcontractor license and charter numbers. The other three bidders failed to completely list all the required numbers. (Testimony of Rutherford; P-11, P-12, P-13, P-14, P-15, P-16, P-17, P-34, P-37, R-1, R-5.) The project architect testified that the submittal of incorrect or incomplete subcontractor license and charter numbers was a deficiency which a bidder should be allowed to cure after bid opening. But the failure to submit any required "number" was a deficiency which, in his opinion, could not be similarly corrected. He failed, however, to supply a reasonable basis for drawing such a distinction. Therefore, his opinion on this question is given little weight. 5/ (Testimony of Rutherford.) Subcontractor license and charter numbers are readily obtainable and can be verified by contacting the pertinent state agency--the Florida Department of Professional Regulation, Construction Industry Licensing Board, or the Florida Department of State. (Testimony of Griffin, Rutherford; P-32, P-33, P- 34, P-35, P-36, P-37.) The project architect, William Rutherford, routinely requires the listing of subcontractor license and charter numbers on bids for public construction projects. The main purpose it serves is that it would enable him to identify the listed contractor, since sometimes subcontractors have similar business names. Although if he was uncertain about the qualifications of a subcontractor, he would ordinarily question the general contractor. (Testimony of Rutherford.) Although Mr. Rutherford has customarily required the listing of subcontractor "numbers" on public projects, he has never made any use of those numbers in the past. (Testimony of Rutherford.) The general contractor who is awarded the contract is responsible to Mr. Rutherford and the College for construction of the project in accordance with the bid specifications. If, after bid opening, a listed subcontractor is unable to perform, Mr. Rutherford would ordinarily arrange for substitution of a new subcontractor acceptable to the general contractor and owner. (Testimony of Rutherford.) Griffin Construction's failure to list the license and charter numbers of its listed subcontractors, and its subsequent curing of that failure, did not affect the amount of its bid 6/ by giving it an advantage or benefit not enjoyed by other bidders. The bid omission did not allow Griffin Construction the opportunity to change any material element of its bid after bid opening. The inclusion or exclusion of subcontractor "numbers" at bid opening does not affect the ability of a contractors to obtain the required bond, the quality of bidding general contractors, the quality of listed subcontractors, the quality of work performed, or any material feature of the competitive bidding process. (Testimony of Griffin, Rutherford.)
Recommendation Based on the foregoing, it is RECOMMENDED: That the construction contract in question be awarded to Vick Griffin Construction Company, the lowest responsible bidder. DONE AND RECOMMENDED this 29th day of April, 1982, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of April, 1982.
The Issue Whether Respondent's rejection of all bids for Lease No. 540:0920 was improper.
Findings Of Fact The Respondent published an invitation to bid seeking to lease approximately 9,907 net square feet of office space in Broward County (the Lease). There was no evidence of any irregularities in the preparation or the issuance of the invitation. The Petitioner, whose responsive bid was rejected by Respondent, timely and properly brought its protest and has standing to protest the Respondent's rejection of all bids for the Lease. Lynn Mobley was the statewide lease manager of the Respondent and had the responsibility to generally oversee the preparation of the bid package and the bid opening procedures. Barbara Lollie was a staff member under the supervision of Ms. Mobley and was in charge of the preparation of the request for bid proposals. Ms. Mobley's supervisor was a Ms. Barron. Five bids in response to the invitation to bid were duly received by Respondent. An evaluation committee chaired by Don Walker, Respondent's area administrator, was appointed to inspect the proposed properties and to evaluate the bids. The evaluation committee ranked the bids in the following order of preference: 1/ 1. In-Rel ($499,141.80) 2. Taft ($519,090.30) 3. Donlon ($541,119.90) 4. Procacci ($618,373.30) 5. Stirlingwood ($761,906.30) Thereafter the responses to the invitation were forwarded to Ms. Mobley's office for evaluation. Ms. Mobley's staff determined that the top two bids, those of In-Rel and Taft, were non-responsive. 2/ Ms. Mobley, who did not actively participate in the evaluation of the proposals, then advised Mr. Walker of that determination and advised him of two alternatives: to award the bid to the lowest responsive bidder or to reject all bids and re-advertise. The evaluation committee chaired by Mr. Walker had wanted to lease the property to either In-Rel or Taft. Mr. Walker told Ms. Mobley that he wanted to reject all bids and to re-advertise. Pursuant to the request for bids promulgated by the Respondent and Rule 13M-1.015, Florida Administrative Code, the Respondent reserved the right to reject any and all bid proposals for the Lease. The request for proposal of bids specifically stated: The Department reserves the right to reject any and all bid proposals for reasons which shall include but not be limited to the agency's budgetary constraints; waive any minor informality or technicality in bids, to accept that bid deemed to be the lowest and in the best interest of the State, and if necessary, to reinstate procedures for soliciting competitive proposals. Following the telephone conversation between Mr. Walker and Ms. Mobley, Ms. Mobley sent a letter dated March 23, 1992, to all bidders which notified each bidder that all bids had been rejected. That letter did not state the reasons for the rejection of all bids. Mr. Walker sent a memo on March 20, 1992, to Ms. Lollie recommending the rejection of all bids. Although this memo predated the rejection letter and was subsequently made available to Ms. Mobley, the memo was received by Ms. Mobley's office after the rejection letter had been sent. The memo gave no explication of Mr. Walker's reasons for wanting to reject all bids. The Department of General Services (DGS) published lease rate guidelines for Broward County to inform the Respondent of maximum acceptable lease rates. The purpose of these DGS guidelines was to advise the Respondent that proposed lease rates above the guidelines would be summarily rejected. At the time of obtaining bid proposals, the DGS lease rate guidelines were the only established guidelines which could be consulted by the Respondent. At no time did the Respondent calculate a pre-bid estimate of what the Respondent felt was an acceptable range of lease rates in order to be used in determining whether lease rates were too high. The Petitioner's bid, along with the other responsive bidders, were within the DGS lease rate guidelines. Mr. Walker made the request for re-bid after he learned that the bids of Taft and In-Rel were non-responsive. Mr. Walker's decision to recommend the rejection of all bids was based only on the information that the two top choices of the evaluation committee had been found to be non-responsive and on his desire to reopen the bid process in the hope of attracting more bidders. 3/ Mr. Walker wanted to modify the specifications of the invitation to bid in two regards. First, he wanted to amend the specifications to permit the leased premises to be in more than one building. Second, he wanted the geographical boundaries in which the leased premises could be located to be expanded to hopefully attract additional bidders. Mr. Walker believed that a re-bid would provide a wider range of buildings at comparable prices from which to choose and would give him an opportunity to make changes to the bid specifications. His decision to recommend the rejection of all bids was not based on a lease bid analysis or on lease rate guidelines. The recommendation was not dictated by budgetary considerations, but by his desire to shop the bid. It was Mr. Walker's understanding that at the end of his telephone conversation with Ms. Mobley that the decision to reject all bids had been made and that all bids would be rejected. Ms. Mobley made the decision to reject all bids pursuant to the recommendation of Mr. Walker after obtaining input from Ms. Lollie and Ms. Barron. Although Ms. Mobley had Ms. Lollie's analysis of the five bids, that analysis made no comparison of the rates contained in the bids with existing lease rates or the DGS guidelines. Ms. Mobley did not consult the DGS lease rate guidelines, although she was generally familiar with those guidelines, and she was unaware of any budgetary constraints that would dictate the rejection of all bids. When Ms. Mobley decided to reject all bids, she did not compare the bid proposals to the existing lease rates paid by the Respondent for leased office space in Broward County. The decision to reject all bids was not made on the advice of an attorney. Although Ms. Mobley testified that all bids on the Lease were rejected solely for price considerations, the evidence presented established that the decision to reject all bids was not based on price, price guidelines, or the Respondent's budgeting constraints. The greater weight of the evidence establishes that Ms. Mobley rejected all bids because that was the action recommended by Mr. Walker. Respondent's invitation to bid did not contain any lease rate guidelines that would notify prospective bidders of a lease rate ceiling. There was no significant difference in the lease rates between the Taft and In-Rel bids that were favored but non-responsive and the third lowest bidder, the Donlon bid, which was responsive but rejected. Mr. Walker conceded that the Donlon bid was not rejected because of price considerations. Mr. Walker was of the opinion that the Donlon bid was at an acceptable price. He did not testify that the Petitioner's bid was at an unacceptable price and he did not testify as to what, other than the DGS guidelines, would be the maximum acceptable price. The DGS Lease Guidelines applicable to the bid for the Lease were as follows: A full service Lease (including electricity) -- $17.84 a square foot. 4/ Lease without electricity -- $15.18 a square foot. The present rate for the existing lease which was to be replaced by the Lease was $16.60 a square foot; this rate did not include electricity. If electricity was factored in at $2.50 a square foot, which was a factor regularly used by DGS, the present lease rate would be approximately $18.00 a square foot. The three responsive bids to the invitation were lower than the present lease after factoring in electricity. Ms. Goodman was of the opinion that Respondent's budget with respect to the Lease would be based on lease rates already in existence and consequently, that the responsive bids received and rejected were within the budget guidelines. Respondent offered no evidence to controvert that opinion. There was no evidence that the decision to reject all bids was based on economic considerations. All lease rates submitted by the rejected bidders were under the ceiling set by the DGS lease guidelines of $17.84. The Respondent acted arbitrarily when it rejected all bids.
Recommendation Based upon the foregoing findings of fact and conclusion of law, it is hereby recommended that the Respondent accept and evaluate the responsive bids submitted for the Lease and determine the proper recipient for an award of the Lease. RECOMMENDED this 29th day of June, 1992, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of June, 1992.
Findings Of Fact Prior to April 1987, the Department of Corrections (DOC) determined that it needed 2,300 square feet of office space for its parole and probation office in Santa Rosa County, Milton, Florida. Since the desired square footage of the office was more than 2,000 square feet, DOC was required to seek competitive bids for the proposed office. Towards that end, Wendell Beall, Region I Budget Manager for the Department, prepared a Request for Proposal and Bid Proposal Submittal Form package on lease number 700:0378. This package contained various specifications for the type building DOC wished to lease, as well as weighted, bid evaluation criteria and the numerical points given to each of those criteria. The desired initial term of the lease was five years with an option to renew the lease at the end of the primary term for three years. On April 2, 1987, DOC held a pre-proposal conference for lease number 700:0378 in the Probation and Parole Office in Milton, Florida. The purpose of the meeting was to hand out the Request for Proposal and Bid Proposal Submittal Form package and to answer any questions interested parties may have regarding the bid and bid package. Both Petitioner and Jay Mortgage Co. (the ultimate successful bidder) were present through their representatives. At the pre-proposal conference, the area within which the leased premises must be located was questioned. Specification A.3 defined the area for the leased premises by referring to a map of Santa Rosa County. Normally, such a map would have the acceptable area delineated by a circle or a boundary line drawn on the map. No such delineation was on the Santa Rosa map. Therefore, a more precise definition of the mandatory acceptable area was sought by the potential bidders. Mr. Beall explained that the meaning to be attributed to specification A.3 was that any building within five to ten minutes of the courthouse would be acceptable, i.e., responsive. At this time, no mention of the relative points to be given a location closer to the Courthouse vis. a location farther away was discussed. The enumerated bid evaluation criteria allowed ten points for "location as to clients served" and zero points for "location as to other Department activities." Also at the preproposal conference Mr. Beall reminded those present of the importance of complying with the handicapped requirements. Handicap compliance was stressed because the present landlord could not meet those requirements. He also cautioned all bidders to initial all applicable spaces on the bid submittal form. He further explained that the weighted evaluation criteria in the bid submittal form were the means of ranking the proposals on a point system for purposes of comparison of the respective bids to be submitted. Mr. Beall described the ranking system he preferred as an example of how the individual bid committee members might evaluate the bids. That system was to take the total number of points for a given evaluation criteria, divide by the number of proposals submitted to yield the deduction to be given a building of lesser quality under that criteria. The bids submitted were to be reviewed and graded by a lease committee. The lease committee was not bound by Mr. Beall's preference in awarding or deducting points under a given bid criteria. The individual members could develop their own ranking system based on their best judgment. On April 16, 1987, three bids were received by DOC. The bids were opened at the Probation and Parole Office in Milton, Florida. At that time, Mr. Beall checked the last page of each of the three bids timely submitted, read the first year rental rate per square foot, checked for the bidder's signature and the required attachments on each. The bids were submitted by Jay Mortgage Co., the apparent low bidder, Northrup Building Partnership, the apparent second lowest bidder, and D & C Partners, the apparent third lowest bidder. Mr. Beall accepted the three bids and stated that they appeared to be in order and that he would present them to the lease committee who would then make the final award. On May 14, 1987, the Region I lease committee met. The committee consisted of T. H. Young, Dura Williams, and W. E. Beall. Prior to said meeting, Wendell Beall reviewed all of the bids and transferred appropriate information to a Bid Synopsis sheet. On the synopsis sheet he proposed preliminary point assignments for the three bids under the evaluation criteria set forth in the bid package. Further, Mr. Beall reflected on the synopsis sheet that Petitioner had failed to initial Specification A.12(a), acknowledging the requirement that the leased premises comply wish the State's requirements for Handicapped Facilities. At the lease committee meeting, each of the bid packages were reviewed. The committee decided that the Petitioner's bid and the D & C Partners bid were non-responsive because of the bidders failure to acknowledge (initial) certain bid specifications. Beyond a rudimentary discussion of the rejected bids they were not considered further by the lease committee. The point awards proposed by Mr. Beall were not utilized. Only the Jay Mortgage bid was determined responsive by the committee. Jay Mortgage, therefore, was deemed to be the lowest and best responsive bid by default and was awarded the lease. Petitioner's bid was found to be nonresponsive because Petitioner had inadvertently failed to initial Item A.12(a). The committee felt that Petitioner's failure to initial Specification A.12(a) was material and could not be waived as a non-material item even though some of the committee members were aware that Petitioner's proposed building already had handicap facilities in place at the time the members inspected Petitioner's property. The evidence demonstrated that it was the lack of the initials and not the actual compliance with the specification that the committee found material. The committee felt it could not look to outside evidence or promises of compliance from Petitioner. However, the committee did accept such promises from Petitioner regarding the floor to ceiling walls which did not exist at the time of inspection, but were promised by Petitioner. It is difficult to see how the committee may look behind the bid proposal in one instance and refuse to look behind the bid proposal in another instance. Such inconsistency can be nothing but arbitrary on the part of DOC. This is especially true since the lack of initials was an oversight on Petitioner's part, and the absent floors and ceilings were promised but not present and the handicap facilities were a concrete reality. Moreover, petitioner had initialed in no less than two other places in the bid package specifications requiring compliance with all federal and state requirements and any space requirements of DOC. 1/ The redundancy of the bid package in this regard renders the lack of initials on specification A.12(a) immaterial. In essence, the department was assured at least twice that continuing compliance with the State's handicap requirements would occur. To refuse to waive such a minor deficiency on these facts is arbitrary and capricious. Such an immaterial item should have been waived by DOC and the Petitioner's bid should have been considered and compared to the Jay Mortgage bid. Since the bids submitted by Petitioner and Jay Mortgage, Co., were not compared by the lease committee, but were challenged as to who submitted the lowest and best bid, that comparison is now ripe for decision in this de novo review of DOC's action. The first relevant bid evaluation criterion deals with the comparative rental value for the initial term of the lease on the two bidders' properties, reduced to present value. Seventy points were awardable for this criteria. In this case, Petitioner was the lowest bidder on the initial lease term by 78 cents per square foot. The victory in the primary term was only achieved by Petitioner in the first three years of that term. In the last two years of the primary term, Jay Mortgage Co. was lower, but not by enough to offset Petitioner's lead. Petitioner was, therefore, lower by at least a minimal amount and to that extent would be the better bid. The difference, however, should only be reflected in a minimum deduction of two points from Jay Mortgage Co. /2 The awarded points should, therefore, be seventy points for Petitioner and 68 points for Jay. The second relevant criterion was the conformance of the building space to efficient utilization and layout. Two points were awarded for this criterion. Both bidders adequately met this criterion. Therefore, the maximum of two points should be awarded to each bidder. The third relevant criterion was for street level parking space. Ten points were awardable under this criterion. In this instance, a minimum of fifteen off-street parking spaces were required by DOC. Both bidders met this minimum requirement. However, the evidence demonstrated that Petitioner offered considerably more parking space at its location. The evidence further demonstrated that DOC experienced periods when it conducted an unusual amount of business with its clients, requiring more parking than usual. In that respect, Petitioner offered the better property. However, the probation offices unusual requirements occurred about once a month for only two or three days. Therefore, a minimum difference of one point should be deducted from Jay Mortgage. The awarded points should, therefore, be ten points for Petitioner and nine points for Jay. The fourth relevant criterion was the proximity of the lease site to the clients served by the parole and probation office. In this regard, the evidence clearly demonstrated that Petitioner had the better location for the county-wide area serviced by Petitioner. Respondent's main business was the supervision of probationers and community controllees. Most of this "service" is conducted by DOC at its office or county-wide in the field. Petitioner clearly has easier and better access to its location than the downtown location offered by Jay Mortgage, Co. Therefore, Petitioner's location would be far more proximate and convenient to the probation offices clients than would the downtown location offered by Jay Mortgage. At the hearing, DOC felt that the preferential location under the fourth criterion was the location closest to the courthouse because some of the probation officer's work must be done at the courthouse and an officer may be summoned to the courthouse at any time by a judge. Therefore, a building within walking distance of the courthouse such as Jay Mortgage's building was more convenient for the probation office's personnel as compared to one which requires driving to the courthouse, such as Petitioner's building. The reasons given by DOC for their selection of Jay Mortgage under the fourth criterion at the hearing do not fall within a reasonable interpretation of "proximity to clients served by the Department." DOC's reasons would fall under another separate evaluation criterion. The criterion which would approximately cover DOC's reasons deal with the proximity of the offered space to the other activities of the Department. These "other" activities would include attendance at court for probation revocation hearings or for sentencing of offenders. "Convenience for the personnel" is relevant under these other activities and there is no question that "convenience for the office personnel" is a valid reason for distinguishing between bidders. However, the evaluation criterion which covers these reasons was assigned zero points. DOC cannot go outside its bid criteria. Therefore, no distinction can be made between the bids based on the above grounds. The only points awardable are the ten points assigned under the fourth relevant criterion outlined in paragraph 14 above. DOC's reasons do not fall within the fourth criterion. No other evidence was presented by Respondent to support a preference for Jay Mortgage Co. over Petitioner under the fourth criterion proximity to clients. Petitioner presented evidence which clearly demonstrated that it was the better bid under the fourth criterion. The difference between the bids is significant since client service is the DOC's main business. The only formula available for rating the value of the difference is Mr. Beall's. Therefore, utilizing Mr. Beall's methodology, the points awardable for the fourth relevant criterion should be ten points for Petitioner and seven points for Jay. The fifth relevant criterion was for moving costs. No evidence was submitted by Petitioner or Respondent as to this criterion. Therefore, no conclusions can be drawn about the effect of such costs. No points should be awarded under this criteria. The sixth relevant criterion dealt with the option period rental rate. Six points were awarded for this criterion. Jay Mortgage Co. was the lower of the two bids. The actual difference between the two bids was approximately 25 cents a square foot. That difference appears in the last year of the option term. 3/ In the first two years of the option term the bidders reflect the same rental rate. Since 25 cents is a minimal difference only a minimum deduction of one point should be made. 4/ Therefore, the points awardable for the sixth relevant criterion should be six points for Jay and five points for Petitioner. The overall result would be as follows: CRITERIA PETITIONER JAY MORTGAGE CO. 1. Basement 70 68 2. Space 2 2 3. Parking 10 9 4. Clients 10 7 5. Moving Costs 0 0 6. Option Rent 5 6 TOTAL 97 92 As can be seen from the above table, Petitioner submitted the lowest and best responsive bid under a consideration of all the weighted evaluation criteria established by DOC. Petitioner should, therefore, be awarded the bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That Petitioner be awarded the lease contract as the lowest and best responsive bid. DONE and ORDERED this 21st day of December 1988, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of December 1988.
The Issue The issue in this cause is whether costs and attorney's fees are due Petitioner, hereinafter PROCTOR, from Respondent, hereinafter HRS, pursuant to Section 57.111, Florida Statutes, as a result of Division of Administrative Hearings Case Number 91-5963-BID, and, if so, the amount of costs and fees.
Findings Of Fact The petition for fees and costs herein is brought exclusively under Section 57.111, Florida Statutes, and relates back to a bid protest wherein PROCTOR and TCC #3 LTD., INC., hereafter TCC, were the only bidders on HRS lease 590.236. PROCTOR was the protestant/Petitioner and TCC was the apparent successful bidder/Intervenor in Derick Proctor v. Department of Health and Rehabilitative Services, DOAH Case No. 91-5963BID. HRS' Invitation to Bid (ITB) for lease 590:236 required bidders to submit evidence of control of the property being offered, including the parking areas. Evidence of control could take the form of a deed for the property, an option to purchase the property, or a lease or option to lease showing a right to sublease. TCC did not submit a document labelled "deed," "option to purchase," "lease," or "option to lease" with its bid. TCC submitted as its evidence of control a contract for sale and purchase of the property with Hernando Plaza, Ltd., executed by Edward M. Strawgate and Harold Brown representing themselves to be general partners of the limited partnership. At all times material, the actual record title of the property submitted by TCC for the bid was in the Victor and Lillian Brown Foundation. At the times of the bid opening, evaluation, and August 27, 1991 notice of intended award, HRS had no reliable information as to what entity actually owned the property offered by TCC, and TCC had not disclosed to HRS that its contract to purchase the property was with an entity other than the record owner. Up to then, at least, Hernando Plaza, Ltd. had represented itself to TCC as being the owner of the property. The ITB did not require an abstract of title to be submitted with the bid. HRS normally does not require an abstract from successful bidders, although the ITB contained provisions for future disclosures from successful bidders. Absent some reason to "go behind" facial evidence of control, HRS' ITB attempted at the time to protect HRS by requiring successful bidders to post an irrevocable letter of credit to be forfeited in the event a successful bidder could not perform and for future disclosures concerning the chain of title. (See the recommended order in the underlying case). HRS accepted the contract to purchase the property from Hernando Plaza, Ltd. as TCC's required evidence of control, believing it to constitute an option to purchase. (See Findings of Fact 15-17 infra, this final order). On August 27, 1991, PROCTOR received from HRS a notice of intent to award the bid to TCC. This notice constituted the "window" for protests, if any, to be filed. PROCTOR then timely filed a notice of intent to protest and a formal written protest of the award to TCC. The filing of this protest resulted in an automatic suspension of the bid solicitation and contract award process and referral of the matter to the Division of Administrative Hearings, pursuant to Section 120.53(5)(c), Florida Statutes. This protest formed the basis of the underlying bid case, DOAH Case No. 91-5963BID. No later than the time of the Prehearing Order of September 23, 1991 in Case No. 91-5963BID, the law firm of Gibbs and Rudzik had made known to the hearing officer and counsel for both PROCTOR and HRS its retention as counsel for TCC. TCC moved for leave to intervene in a motion filed September 30, 1991, which was granted in an order of October 4, 1991. In a letter of October 10, 1991, counsel for PROCTOR made counsel for HRS aware of a question of whether TCC could obtain good title to the property. Counsel for PROCTOR proposed in a letter of October 14, 1991 to counsel for HRS that HRS reject both PROCTOR's and TCC's bids and rebid the lease, but this letter was primarily devoted to determining if HRS wished to interpose a new defense that PROCTOR's bid was unresponsive. In the instant fees and costs case, PROCTOR relies on its October 14, 1991 letter as the point from which HRS should have acted to avoid incurring attorney's fees and costs. After the receipt of the two letters, HRS did not reject both bids and rebid the contract but proceeded to formal hearing on October 30, 1991. PROCTOR and HRS share the mutual impression that had HRS accepted PROCTOR's proposal to reject both bids, HRS would have to have allowed TCC an opportunity to protest that decision. At the final hearing in Case No. 91-5963BID, evidence was offered that Hernando Plaza, Ltd. had a conditional option to purchase the property from the record title owner, the Brown Foundation. However, it was not established at the hearing that the conditions of the option had been fulfilled or that TCC or Hernando Plaza, Ltd. could otherwise gain good title to the property through a valid option. It was concluded as a matter of law in Case No. 91-5963BID, that on its face, the ITB stated that control could be evidenced merely by attachment of an "option to purchase," that the ITB stated no further requirements concerning the internal provisions of the option to purchase, and that TCC's conditional contract for purchase constituted a conditional option to purchase. The conditions of the option to purchase and the chain of title, among myriad other matters were subjects of proof at the formal hearing. The conditions of the option to purchase and various complicated real property concepts arising from recorded and unrecorded parts of the chain of title constituted the thrust of the recommended order's assessment that TCC's "control" was speculative only. It is here noted that the totality of the "chain" of title might have been unavailable even by "abstract" due to the lack of recordation of some documents. The lengthy formal hearing adduced evidence concerning the factual issue of whether or not the conditional option to purchase was between TCC and an entity which had such a sufficiently unequivocal interest in the proposed property that it could convey title to TCC in time for TCC to fulfill its obligations under its proposed lease to HRS. There is no evidence that HRS knew of these problems on August 27, 1991, when it gave notice of its intent to award the bid to TCC. Hernando Plaza, Ltd. was the entity with which TCC had contracted. At formal hearing, TCC relied on the legal concept that all interests in the property had merged in the non-title holder, Hernando Plaza, Ltd. This concept, together with recorded and unrecorded elements in the chain of title which were presented at formal hearing, were determined in the recommended order to be too "speculative" on the issue of TCC's control. However, it was also found, upon evidence submitted at formal hearing, that TCC's bid contained no other material deviations from the requirements of the ITB, that the signator of TCC's bid had sufficient status to submit the bid for the TCC corporation, and that TCC's signator could not submit the bid as an agent of the owners of the real property. TCC and its bid signator had never purported to have submitted the bid on behalf of the owners of the real property. (See the recommended order of the underlying bid case.) These issues were raised by PROCTOR and they addressed more than just the facial compliance of TCC's original bid documents which was all HRS had to consider when it made its initial decision in favor of TCC and against PROCTOR. However, the recommended order found HRS to have materially deviated in a number of ways from the bid process in its initial evaluation of PROCTOR's bid, not the least of which was determining that PROCTOR had complied with the ITB requirements for demonstrating control. All such evaluation flaws had been committed by HRS in favor of PROCTOR. Both TCC's and PROCTOR's bids were ultimately found to be unresponsive in the recommended order entered on December 20, 1991. The recommended order also found both had standing to be involved in the bid protest and formal hearing. The recommended order recommended rejecting both bids and readvertising the ITB. The Final Order of HRS entered on January 20, 1992 dismissed PROCTOR's protest on the basis that he lacked standing to protest, as his bid was unresponsive, and awarded the bid to TCC. HRS did not give PROCTOR notice that his bid was not responsive until it issued its Final Order. The Final Order of HRS was appealed to the First District Court of Appeals by PROCTOR. The First District Court of Appeals entered an order on June 22, 1992 finding PROCTOR had standing and remanding the case back to HRS for the purpose of a decision of the issue of whether TCC's bid was also unresponsive. On July 27, 1992, HRS entered its Amended Final Order determining both bids to be unresponsive and that the lease should be relet for bids. The First District Court of Appeals affirmed the Amended Final Order of HRS in a per curiam opinion without discussion on October 13, 1992. HRS did not reject both bids and rebid the contract until after this per curiam opinion. No motion for rehearing was filed with respect to either of the First District Court of Appeals' orders entered June 22 or October 13, 1992, nor was any notice to invoke the discretionary jurisdiction of the Supreme Court filed. PROCTOR did file a motion for rehearing solely on the court's denial of PROCTOR's motion for appellate fees. Mandate was issued by the Clerk of the First District Court of Appeals on December 3, 1992. HRS entered an Order Directing Release of Bid Protest Cost Bond on December 18, 1992, in which HRS stated: Petitioner, Derick Proctor, has prevailed in the above styled bid protest. Petitioner's domicile and principal place of business is Vero Beach, Florida. Petitioner has one employee. Petitioner is a sole proprietorship. Petitioner's net worth does not exceed $2,000,000.00. HRS was not a nominal party in the underlying bid case. HRS did not initially challenge PROCTOR's "small business party" status in this instant fees and costs proceeding. Therefore, that allegation of the fees and costs petition is not at issue. Also, Petitioner's "small business party" status is now stipulated to exist. The parties have stipulated that the maximum statutory fee is $15,000.00 and that $15,000.00 is a reasonable fee if an award of attorney's fees is due. HRS has not protested or objected to the amount of costs claimed, $411.25, if costs are due.
