Findings Of Fact Respondent, through its Invitation to Bid (ITB) No. 123-395-98-C Rebid, seeks to award a 12-month contract for, the purchase of electronic data processing cards. Bids were opened on November 10, 1981, at which time Petitioner was the apparent low bidder. However, Respondent disqualified Petitioner's bid because Data Specialties Mart did not have a corporate charter number and had no manufacturing capability on the bid opening date. S. F. Holdings, Inc., is a Florida corporation, Charter No. 637983. Data Specialties Mart is a division of this corporation and has been assigned Vendor No. 00417 by Respondent. Confusion over Petitioner's identity arose from the section on Respondent's ITB where the vendor name is to be entered. Petitioner placed the name "Data Specialties Mart, Inc.," (non-existent as a corporation) in this block. Petitioner did, however, enter the S. F. Holdings, Inc., charter number and the Data Specialties Mart vendor number in adjacent blocks. A letter attached to the bid describes Data Specialties Mart as a marketing division of S. F. Holdings, Inc. Although this letter did not have as its purpose correction of the above error, it did provide the clarification Respondent should have sought. Furthermore, this relatively minor discrepancy could have been resolved through contact with the Petitioner. Petitioner stated by letter dated November 9, 1981, (attached to its bid) that "The cards will be produced through our Lakeland, Florida manufacturing facilities (formally [sic] known as National Electronics Computing Supplies, Inc.)." Respondent investigated the claimed ownership and determined that Petitioner did not possess the manufacturing facility on the bid opening date, November 10, 1981, as represented. Petitioner's president, who signed the letter, believed he would acquire the facility at a November 16, 1981, bankruptcy proceeding and thus claimed the facility for bid purposes. Although Petitioner did acquire the factory as anticipated, it possessed no manufacturing capability on the bid opening date.
Recommendation From the foregoing, it is RECOMMENDED that Respondent enter a final order dismissing the petition. DONE and ENTERED this 11th day of February, 1982, in Tallahassee, Leon County, Florida. R. T. CARPENTER, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 11th day of February, 1982. COPIES FURNISHED: Dean Bunch, Esquire Ervin, Varn, Jacobs, Odom and Kitchen Post Office Box 1170 Tallahassee, Florida 32302 William P. Beck, Esquire Department of General Services 457 Larson Building Tallahassee, Florida 32301 Thomas R. Brown, Executive Director Department of General Services Room 115, Larson Building Tallahassee, Florida 32301
The Issue Whether the Respondent, School Board of Broward County, Florida (Respondent or Board), may reject all bids as proposed for Bid No. 2002-02-FC, Group A1, or whether such action is illegal, arbitrary, dishonest, or fraudulent.
Findings Of Fact The Respondent is the entity charged with the responsibility of governing the public schools within the Broward County School District. As such, the acquisition of school properties and attendant improvements fall within the Board's legal authority. These cases involve the procurement of relocatable buildings suitable for classroom purposes. Pursuant to its authority, on or about December 27, 2002, the Respondent issued a bid that is the subject matter of the instant challenge. The bid, identified in this record as Bid 2002-02-FC, sought proposals for the procurement of district-wide relocatable buildings. In a prior time these buildings were known as "portable classrooms" or "portables." In the post-Hurricane Andrew world, these structures are now pre-engineered and constructed of concrete or steel (or a hybrid of both) and must be, by design, capable of being relocated to various sites. The Petitioners, Royal and Padula jointly, and the Intervenor, James B. Pirtle Construction Company, Inc. (Pirtle or Intervenor), design, construct, and install such structures. In these cases the bid sought several distinct proposals. First, the project sought vendors who would provide and deliver concrete relocatable buildings (Group A1). Group A2 (not at issue in this proceeding) sought steel relocatable buildings. Group B (also not at issue in the instant case) sought site adaptation prices for landscaping, lighted covered walkways, steps, ramps, and other engineering incidental to the installation of the buildings. The advertisement for the bid carried the same generic information as to all groups. The bid documents also contained many terms that were applicable to all groups. Pertinent to the issues of these cases are the following excerpts from the bid document (Joint Exhibit 2). The order of the excerpts should not suggest any significance. The excerpts are listed in this manner solely for convenience sake: BASIS OF AWARD In order to meet the needs of the school system . . . each Award will be . . . up to three responsive and responsible bidders meeting specifications, terms and conditions. Individual projects will be issued . . . based upon lowest cost among one or more bidders per project as determined by the project manager. Therefore, it is necessary to bid on every item in the group, and all items in the group must meet specifications in order to have the bid considered for award. Unit prices must be stated in the space provided on Document 00410 Bid Form. SBBC [the Respondent] reserves the right to procure goods from the second and third lowest bidders if: a) the lowest bidder cannot comply with delivery requirements or specifications; b) the lowest bidder is not in compliance with delivery requirements or specifications on current or previous orders; c) in cases of emergency; d) work may be issued to multiple contractors if in the opinion of The School Board of Broward County, Florida or its staff the work cannot be completed by a single contractor in the specified time such as a Summer, Winter or Spring Break or if it is in the best interest of SBBC to do so regardless of reason. ARTICLE 4 BIDDING PROCEDURES 4.01 FORM AND STYLE OF BIDS A. Bids shall be submitted on forms identical to Document 00410, Bid Form, and other standard forms included with the Bidding Documents. The following documents are required to be submitted with the Bid: * * * SIGNED SEALED ARCHITECTURAL AND ENGINEERING DESIGN DRAWINGS OF THE STRUCTURES TO BE PROVIDED (FOR RELOCATABLE BUILDINGS BID ONLY) 5.03 REJECTION OF BIDS AND IRREGULAR PROPOSALS * * * The Owner shall have the right to reject any or all Bids, reject a Bid not accompanied by a required bid security, good faith deposit, or by other data required by the Bid Documents, or reject a Bid which is in any way incomplete, irregular or otherwise not Responsive. The Owner may waive any formality in the bid requirements and award or not award the contract in the best interests of The School Board of Broward County, Florida. (Emphasis in original not shown) In addition to the foregoing, the bid documents contained detailed and specific design criteria that set forth information such as the slope of roofs, the roof spans, the mechanical systems, ventilation, plumbing, windows, and stoops. These design criteria covered hundreds of topics and encompassed virtually every facet of the structures. To review each bid proposal as to whether each design specification was met would require countless man-hours. The issue of how to review the bid proposals was not adequately anticipated by the Respondent. From the outset the bid document evolved from unusual circumstances. Whether the bid document was intended to be a request for proposals (RFP) or an invitation to bid (ITB) was a primary confusion among the Board's staff. If the proposals were to be deemed responsive or not and then ranked solely on price (thus making the bid process more like an ITB) how could staff effectively determine the threshold question of responsiveness? If the proposals were to be ranked based upon a point or qualitative approach (more like an RFP) where were the criteria by which to score the proposals? In fact, there were no objective criteria disclosed in the bid document by which a proposal could be evaluated. More curious is that no bidder brought this lack of evaluation criteria to the Board's attention during the mandatory bidder's conference. Moreover, no one challenged the bid specifications. Presumably, the bidders believed it was an "all or nothing" award. That is, if they were the lowest responsive bidder, they would receive the award. The question of who would be responsive and how that decision would be resolved did not come to light until after the bids had been opened. At the mandatory bidders' conference conducted on January 14, 2003, the bidders posed questions in the form of requests for information. In response, the Respondent issued six addenda intended to cover the questions posed. None of the responses addressed how the bid proposals would be evaluated. If anything, Addendum No. 3 added to confusion related to what documents must be submitted with the bid proposal. More specifically, Addendum No. 3 provided, in pertinent part: [Addendum 3, question and response to inquiry] 9. Can schematics be submitted with the bid instead of the signed and sealed architectural and engineering design drawings of the structures that are requested in Document Article 4.01.A.6? Response: Signed and Sealed Architectural/Structural Drawings are required to be submitted with the Bid. The Requirement for Mechanical and Electrical signed and sealed drawing is waived, however all engineering associated with the Relocatable Buildings will require engineer of record signed and sealed drawings and calculations prior to issuance of building permit DRC review. Nevertheless, when the bid proposals were opened on March 4, 2003, the Petitioners and the Intervenor were found to be the three lowest bidders. If responsive, the Intervenor would be considered the lowest bidder with the Petitioners being considered alternate vendors for the procurement. Unsatisfied with the preliminary determination that the Intervenor was the lowest bidder, the Petitioners timely challenged the bid award. The Petitioners maintained that the Intervenor had not timely provided sealed design drawings as required by the bid document. Petitioners argued that the Intervenor had attempted to impermissibly amend their proposal by late-filing a set of structural drawings for the bid. Thus the initial bid protest sought to determine what design drawings were required by the bid and whether the Intervenor had timely supplied such drawings. The Petitioners contended that the Intervenor's submittal should be rejected as non-responsive to the bid. Whether they had complied with the full dictates of the bid requirements was potentially at issue as well. While the initial bid protest was referred to the Division of Administrative Hearings and scheduled for formal hearing, the parties continued to attempt to resolve the issues. It was apparent that the bidders had not submitted identical proposals. How the proposed products had been compared and evaluated was difficult to determine. From the Respondent's committee members came the disclosure that the decision of determining whether the bidders had complied with the bid ultimately came from three fashioned questions. If the structure proposed was pre- engineered, relocatable to various sites, and suitable for educational purposes, the entry was deemed responsive. Based upon this assessment the Petitioners and the Intervenor were deemed responsive and their bids ranked based upon price. This approach did nothing to discern if the designs were comparable in quality, if they met the bid design criteria, or if the drawings were even sufficient to comply with the dictates of the bid. The first posting of the bid award for Group A1 was entered March 18, 2003. On March 21, 2003, the Petitioners timely filed their notices of intent to protest the award of Group A1 to the Intervenor. Thereafter they timely filed the petitions to protest the award and the initial protest was forwarded to the Division of Administrative Hearings. The protests did not encompass Group A2 or Group B. No bidder protested the proposed awards for Group A2 or Group B. In fact, the Respondent went forward on those procurements and awarded contracts for those groups on April 1, 2003. The Respondent did not award the contract award for the Group at issue in this proceeding. It must be noted that the instant procurement is not the Board's first experience with the procurement of concrete relocatable classrooms. In fact, the Board has purchased similar structures through a procurement contract that the Palm Beach County School Board holds with its vendors. One of the Respondent's concerns when the instant bids were reviewed was why the cost per unit for the bids in this case was higher than the Palm Beach County amount. As it turned out, the installation economy of multiple units at one site directly impacts the cost of the relocatable structures. Royal confirmed this information after the bids had been opened. When the Respondent's staff met with its counsel in preparation for the initial bid dispute (before the Board elected to reject all bids) the cost of the bid, the lack of full evaluation of the bidders' proposals, and the issues of the first protest were openly discussed. By that time any irregularities with the bid documents could not be repaired as to the contracts already awarded, but as to the instant matter the Respondent could revisit the circumstances and determine its best course. As a result of that reassessment, the Respondent elected to reject all bids regarding this group and attempt to re-bid the procurement with more certain terms. To that end on May 9, 2003, the Respondent issued a revised bid decision that provided in pertinent part: The Facilities and Construction Management Division intends to recommend that The School Board of Broward County, Florida, at the School Board meeting on June 3, 2003, reject all bids received for Group A1 and authorize revising the bidding documents and re-bidding. The rejection of all bids received for Group A1 is made due to serious flaws and ambiguities contained in Document 00200 4.01.A-6 as modified by Addendum No. 3. The Division intends to revise the bidding documents to delete the requirements that bidders submit plans with the bids; include ranges of unit quantities within the bid form; include one or more additional types of construction of the classroom buildings including a composite concrete/steel structure; and incorporate within the new Invitation to Bid all revised terms and conditions that were released through addenda in this procurement. The Petitioners timely filed protests regarding this new decision by the Board and the instant action ensued. By issuing the revised decision to reject all bids the Respondent intended to resolve all issues and to cure the perceived problem with the lack of consistent evaluation of the bidders' proposals. More specifically, the Respondent would be able to assure that the project design could comport with the specifications sought; specify whether architectural or engineering drawings were required and when (it was hoped that the confusion over "architect" vs. "engineer" could be eliminated); and obtain a substantial discount based upon economies from multi-unit purchases for a single site. None of the objectives sought were pre-textual or contrived. Additionally, by avoiding any process that would require a detailed reviewed of the bidders' proposals, countless man- hours could be saved.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the School Board of Broward County enter a Final Order affirming the decision to reject all bids in this matter. DONE AND ENTERED this 20th day of November 2003 in Tallahassee, Leon County, Florida. S ___________________________________ D. PARRISH Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 20th day of November 2003. COPIES FURNISHED: Dr. Franklin L. Till, Jr. Superintendent Broward County School Board 600 Southeast Third Avenue Fort Lauderdale, Florida 33301-3125 Daniel J. Woodring, General Counsel Department of Education 325 West Gaines Street 1244 Turlington Building Tallahassee, Florida 32399-0400 Usher Larry Brown, Esquire Brown, Salzman, Weiss & Garganese, P.A. 225 East Robinson Street, Suite 660 Orlando, Florida 32801 Steven L. Schwarzberg, Esquire Schwarzberg & Associates Esperante, Suite 210 222 Lakeview Avenue West Palm Beach, Florida 33401 Thomas R. Shahady, Esquire Adorno & Yoss, P.A. 350 East Las Olas Boulevard, Suite 1700 Fort Lauderdale, Florida 33301 Robert Paul Vignola, Esquire Broward County School Board C. Wright Administrative Building 600 Southeast Third Avenue, 11th Floor Fort Lauderdale, Florida 33301
The Issue Whether the Department of Health and Services acted fraudulently, arbitrarily, capriciously, illegally or dishonestly in issuing an award of bid or HRS Lease No. 590:2069 to Harpaul S. Ohri.
Findings Of Fact Sometime before March, 1989, the Department of Health and Rehabilitative Services (HRS) requested and received approval from the Department of General Services (DGS) for additional office space to provide social services in the western portion of Orlando, Orange County, Florida, including a food stamp distribution office. HRS was authorized to procure, through competitive bidding, a lease for 17,250 net rentable square feet of existing office space, plus or minus 3 percent. The said lease was to provide for a full service period of seven years and two options to renew for three years each at specified rates, with occupancy no later than December 1, 1989 or 175 days after the bid award is finalized. The geographic area designated in the bid package for the office space was limited to the following area of Orange County, Florida: Beginning at the intersection of Colonial Drive and Kirkman Road to the intersection of L.B. McLeod Road, then east on L.B. McLeod Road to the, intersection of Rio Grande Avenue then north on Rio Grande Avenue to the, intersection of Colombia Street,, then east on Colombia Street to Interstate 4, then north on Interstate 4 to the intersection of Colonial Drive, then west on Colonial Drive to the point of Beginning. Public notice that HRS was seeking competitive bids was given and HRS prepared a document entitled Invitation to Bid for Existing Office Space (ITB), which set forth in detail all of HRS requirements. The purpose of the ITB was to inform all potential bidders of the minimum requirements for submitting a responsive bid, and the specific criteria by which the bids would be evaluated. Specific areas of importance to Respondent as reflected in the ITB and addressed by the evidence herein were as follows: 17,250 net rentable square feet (plus or minus 3 percent) of existing office space. General office use for use, as a client service center. Seven year term with two options to renew of three years each. 120 off-street, on-site, full size parking spots designated exclusively for use of Department employees and clients, suitably paved and lined, with a minimum of two for the handicapped. Availability of public transportation within reasonable proximity. Availability to adequate dining facilities within two miles. Photographs of the exterior front of the facility, along with documentation of present facility configuration and parking areas including access and egress to public roadways. Availability of elevator for multi-story use. i). Space requirement criteria: Minimum telephone requirements. Back-up interior emergency lighting. Three separate sets of rest rooms, male and female, one meeting the needs of the handicapped General security requirements. Specific security requirements for food stamp distribution center. Window covering over exterior widows to allow both sunlight and energy control; if bidded space without existing windows, then all rooms comprising the exterior of the building would require windows measuring approximately 24 x 36, all secured and inoperable. Full Service including all utilities and janitorial. The evaluation factors and their relative weights were stated in the ITB as follows: Evaluation Criteria The successful bid will be that one determined to be the lowest and best. All bids will be evaluated on the award factors enumerated below: Associated Fiscal Costs Rental rates for basic term of lease Evaluated using present value methodology by application of the present value discount rate of 8.69 percent. (Weighting: 25) Rental rates for optional renewal of terms of lease. Rates proposed are within projected budgeting restraints of the department. (Weighting: 10) Associated moving costs, i.e., furniture, equipment, telephone systems, etc,. (Weighting: 5) Location Proximity of offered space in central or preferred area of map boundaries. (Weighting: 10) Frequency and availability of satisfactory public transportation within proximity of the offered space. (Weighting: 10) The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on the efficient and economical conduct of the departmental operations planned for the requested space. (Weighting: 10) Facility Susceptibility of design of the space offered to efficient layout and good utilization. (Weighting 15) Provision of the aggregate square footage in a single building. Proposals will be con- sidered, but fewer points given, which offer the aggregate square footage in not more than two locations provided the facilities are immediately adjacent to or within 100 yards of each other. (Weighting: 10) TOTAL POSSIBLE 100 percent The bid package contained various bid specifications, bid evaluation criteria and the numerical weight assigned to each of those criteria. Sealed bids were submitted by three bidders, Petitioner, Harpaul S. Ohri and Kensington Gardens Builders Corp. The bids were opened on April 25, 1989, and Ernie Wilson, HRS District 7 Facilities Services Manager, determined that all three bids were responsive, and within the mandatory geographical area designated in the bid package. The District Administrator appointed a bid evaluation committee to review and grade, the responsive bids under the criteria established in the bid package, and to recommend to him the committees choice of the lowest and best bid. Four individuals who were familiar with the type of work to be done in the proposed space and familiar with the bid process were appointed to the Committee. On or about May 1, 1990 the bid evaluation committee determined that the bid of Harpaul S. Ohri was the "lowest and best bid" and submitted its determination, in writing, to the District Administrator who, subsequently approved the selection. On or about June 26, 1989, on behalf of the Department, Ernie Wilson, Facilities Services Manager, notified the bidders of the Departments intent to award the bid to Harpaul S. Ohri, as being in the best interest of the Department. The bid evaluation committee consisted of four representatives of the Department who visited two of the three bidders sites and questioned the bidders representatives. The members of the committee were familiar with the Petitioners site from previous experience. They choose not to make an on-site visit prior to completing the bid evaluation sheet, although instructed to do so on the Evaluation Committee Duties and Responsibilities/Real Property, Leasing instruction sheet. Each committee member completed an evaluation sheet and gave a higher total score to Mr. Ohri. The three major bid evaluation criteria were Fiscal Cost, Location and Facility. Under the Fiscal Cost criterion were three sub-categories: Rental Rates, Renewal Rates, and Moving Costs. For Rental Rates, Petitioner received an average of 22.7 points out of 30 possible,, while Ohri received 21.7, and Kensington Gardens received 23.7 points. The points were individually assessed by the evaluation committee, after the rental rates were compared by Ernie Wilson based on the present value analysis of bidders proposed rates. For Renewal Rates, each of the bidders, including Petitioner, received 5 points out of 10 possible. The present value analysis was not applied, as was noted in the ITB. However, even a cursory examination of the renewal rates submitted by the bidders shows that there is a 15 percent to 33 percent yearly differential in the rates, with the Petitioners rates as the lowest and Kensington Gardens as the highest. Although the committee assigned all three bidders an equal rating, the renewal rates submitted by the bidders were not equal should the Department wish to exercise its options, the rates submitted by Petitioner were substantially lower than the other two bidders and would result in a cost savings to the Department of several hundred thousand of dollars. The award factor points should not have been awarded equally. For Moving Costs, Petitioner received 5 points on each of the committee members sheets, while Ohri received 4 points and Kensington Gardens received, an average of 3.7 points. The maximum points possible was 5 points. Petitioner was awarded the maximum points because HRS is presently in the same building and no moving costs would be experienced. The other two bidders were awarded 4 points each by committee members. That determination was based on each members personal experiences. No cost or time lost data was provided or requested. The LOCATION criterion also had three sub-categories: Proximity to other governmental agencies - 10 points - with all three bidders receiving the same rating; Public Transportation -10 points - with all three ,bidders, receiving the same rating; and Environmental Factors - 10 points - out of which Petitioner received an average of 5.7 points; Ohri - 9.7 points and Kensington Gardens - 6.5 points. In considering the proximity to other governmental agencies of each of the facilities being considered, the committee relied on their own knowledge of the area. They determined that since each was within the geographical area designated in the ITB, each was equally distant from the most frequently visited government agencies in the vicinity. However, Petitioners facility is the most centrally located of the three facilities offered, while the two other facilities were considerably distant from other government agencies. The award factor points should not have been awarded equally. For Public Transportation, the committee determined that local bus service went near each of the three facilities. They were neither provided, nor did they request, route maps, schedules or passenger capacity for buses servicing each facility. Petitioners facility is centralized in the area served within the bid district, and serviced by, numerous bus lines which pass near the facility ten times per hour. The bus service to the other two facilities are limited to four buses per hour, with buses having a smaller capacity. In addition, most clients would be required to travel to the central bus terminal and transfer to a different route in order, to reach the Ohri or Kensington Gardens facilities, making bus transportation a very time-consuming process. No other form of transportation is available, except for taxi service. In addition, in order for a client to walk from the nearest bus stop to the Ohri facility, a person would cross two heavily traveled six lane streets and then walk across an open shopping center parking lot. This would require approximately a fifteen minute walk. In order to reach Petitioners facility, a client would require approximately a five minute walk utilizing public sidewalks. The committee did not consider these facts in its evaluation. The award factor points should not have been awarded equally. (c)(1). For Environmental Factors, the committee considered each buildings physical characteristics and the surrounding area. The committee, in their letter to the District Administrator, dated May 1, 1989, identified this category as "a very critical area for the new lease." The letter also stated: "The committee took the following into account when evaluating this section: Cleanliness of the building aid surrounding areas. Lack of traffic congestion by motorized vehicles close to the facility. Easiness of getting to and from the facility by vehicle. Safety for clients and staff walking to and from the facility. Upkeep of the surrounding buildings or other sections of the bidders building." The following was also taken into account when evaluating this section, but was not so stated in the letter. At least one committee member believed the lack of window space in Petitioners facility was disabling to his bid, and that the willingness of the Ohri representative to install windows on exterior walls was a significant factor in her determination of award. At least one committee member indicated that future expansion was a substantial factor in her favoring the Ohri bid, and that there was janitorial and security problems at Petitioners facility. The committee received no other information other than the committee members opinion regarding the same. The committee as a whole erroneously believed that the extra square footage visible at the Ohri facility at the time of their inspection would necessarily be available to HRS if and when it might expand its offices. Future expansion was specifically removed from the ITB at the pre-bid conference and it was clearly erroneous for them to have included this factor in their bid evaluation. The ITB specifically calls for the installation of exterior windows by the winning bid prior to occupancy. However, none of the committee members reviewed the ITB or the actual bids submitted. They relied primarily on the synopsis of the bids prepared by Ernie Wilson. The ITB states substantial general and specific security requirements in detail; however, the evaluation criteria forms do not provide a category for evaluating security other than generally under the sub-category of environmental factors. The ITB, under General Specifications and Requirements, called for the availability of adequate dining facilities within two miles of the proposed facility. The evaluation criteria did not provide a category for the committee to rate dining facility availability. In consideration of the environmental factors, the committee overlooked or failed to consider a hazardous unfenced high voltage transmission station adjacent to the Ohri facility. In addition, the photographs submitted by Ohri as the front of the building (as required by the ITB) are in fact the rear of the building which was not offered as part of the proposed leased facility. Of the three sub-categories under FACILITY, out of 15 possible points, Petitioner received an average rating of 9.5, Ohri received an average of 13.7 and Kensington Gardens received 11.2 for Layout/Utilization. Ohri received the most points because his building configuration was a, shell and was more flexible and could be reconfigured for more efficient layout to suit the Departments needs. All three bidders submitted proposals wherein the total square footage of rentable space was to be contained in a Single Building. Therefore, all three bidders received the maximum 10 points. A maximum 5 points was provided for facilities with Street-level space. All three bidders were awarded the maximum 5 points. However, a portion of Petitioners space was offered on the second floor, a fact which the committee overlooked. The Petitioner should not have received the full 5 points for having street-level space. The unanimous recommendation of the evaluation was to award the lease to Ohri. In reaching that conclusion, the committee did not properly utilize the weighted bid criteria and, in addition, included improper bid considerations in their evaluation of the three facilities. Some of the reasons given by the committee for distinguishing and preferring one bid over another were rational and reasonable considerations and were covered by the bid evaluation criteria. However, others were erroneous and improper.
Recommendation Based on the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that the Secretary of the Department of Health and Rehabilitative Services enter a Final Order rejecting all bids for lease number 590:2069 and issue a new invitation to bid. DONE AND ENTERED this 12th day of February, 1990, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of February, 1990. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Proposed Findings of Fact submitted by the Petitioner: Accepted: paragraphs 1, 2, 3, 5, 6, 7, 9 (in substance, except for subparagraphs f, g, j and k which are not relevant), 10 (in substance), 12(a), (b), (f-in substance), (g-in substance), (h-in substance), (j), (k-in substance), (l-in substance), (p-in substance). Rejected: Not relevant: paragraphs 4, 12(c), (d), (e), (m), (n), (o), (p- the proposed future location of the Greyhound Station; insure wooded area nearby), (q), (r). Argument: paragraphs 11 and 13. Procedural matters, covered in the preliminary statement: paragraphs 8 and 14. Respondent did not submit proposed findings of fact. COPIES FURNISHED: Terrence W. Ackert, Esquire 201 East Pine Street Suite 1402 Orlando, Florida James Sawyer, Jr., Esquire District 7 Legal Counsel Department of Health and Rehabilitative Services 400 West Robinson Street Orlando, Florida Sam Power Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John Miller General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
Findings Of Fact On March 16, 1989, Respondent sent invitations to bid to actuaries who had been listed by the State of Florida, Department of General Services and with whom Respondent had some familiarity. These invitations pertained to two projects. The first project was one in which Respondent sought the services of qualified actuaries for the rendering of expert services in the area of rating requirements and procedures and the review of rate filings for health maintenance organizations and long term care insurance, Bid 119. The second invitation to bid was associated with the attempt to gain services from qualified actuaries pertaining to the review of health insurance filings, Bid 120. Respondent also gave public notice of the invitations to bid in the two projects that have been described. This notice was given in the Florida Administrative Weekly in its publication of March 17, 1989. On March 17, 1989, Petitioner obtained a copy of the bid materials in Bid 119. On March 20, 1989, he obtained a copy of the bid materials associated with Bid 120. In both Bid 119 and Bid 120 there are set out general conditions which are the same for both invitations. Within the general conditions is found paragraph 5 which states: INTERPRETATIONS/DISPUTES: Any questions concerning conditions and specifications shall be directed in writing to this office for receipt no later than ten (10) days prior to the bid opening. Inquiries must reference the date of bid opening and bid number. No interpretation shall be considered binding unless provided in writing by the State of Florida in response to requests in full compliance with this provision. Any actual or prospective bidder who disputes the reasonableness, necessity or competitiveness of the terms and conditions of the Invitation to Bid, bid selection or contract award recommendation shall file such protest in form of a petition in compliance with Rule 13A-1.006, Florida Administrative Code. Failure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. In furtherance of the opportunity to ask questions concerning the conditions and specifications set forth in the two bid instruments Petitioner, by correspondence received by Respondent on March 20, 1989, submitted a separate list of questions for the two projects, Bid 119 and Bid 120. On March 21, 1989, Respondent offered its answers to the Petitioner. Copies of these questions and answers may be found as Petitioner's composite Exhibit No. 5, pertaining to Bid 120 and Petitioner's composite Exhibit No. 6, pertaining to Bid 119, admitted into evidence. No one took advantage of the opportunity set out in paragraph 5 to the general conditions in each invitation to bid, to dispute the reasonableness, necessity or competitiveness of the terms and conditions of the invitations to bid within the prescribed time frame which is set out in Section 120.53(5), Florida Statutes. That time requirement is to make known objections within 72 hours of becoming apprised of the terms and conditions in the invitation to bid. It was only at the point in time at which Petitioner had been found unresponsive in the two bid circumstances and offered his formal written protest on April 11, 1989, that he attempted to advance claims associated with the reasonableness, necessity or competitiveness of the terms and conditions of the invitation to bid. He made further attempts to criticize those terms within the invitation to bid through presentation at hearing and in the course of the proposed recommended orders. All these efforts were untimely. The significance of Petitioner's failure to timely challenge the terms within the invitations to bid, that is the conditions and specifications, means that the facts in dispute are considered on the basis of whether the Petitioner and others who offered their responses to the invitations to bid have complied with those conditions and specifications as written, not as Petitioner would have them be. Bid 119 was responded to by the Petitioner and Touche Ross & Company. Petitioner's response was timely. By committee review of the responses to the invitation to bid performed by the Respondent and approved by the Assistant Director of Administration, Department of Insurance and Treasurer, one Bruce Brown, a decision was reached to reject all bids. Petitioner and Touche Ross were made aware of this rejection. Petitioner made a timely challenge to the rejection of his bid in accordance with Section 120.53(5), Florida Statutes, leading to the present hearing. Touche Ross did not challenge that decision and did not seek to participate in this hearing, although it was noticed of the pendency of these proceedings. Petitioner and Wakely timely responded to the invitation in Bid 120. The review committee with the concurrence of Mr. Brown found Wakely to be responsive and Petitioner to be unresponsive to the terms of the invitation. Petitioner made a timely request to be heard on this decision by the agency leading to the present hearing. Wakely was noticed of the pendency of this hearing as well as the agency's choice to change from a position of accepting the Wakely bid to one of rejecting all bids and has not participated in the process. The reason why the Respondent has chosen to reject the Wakely bid is based upon its belief that to do so would expedite the process of gaining the actuarial services which it seeks under Bid 120 and based upon some concern that if it sought to contract with Wakely, whom it believes to be the only responsive bidder in Bid 120, it would be met with disapproval by the State of Florida, Department of General Services. This resistance by the sister agency is premised upon the opinion that to contract with Wakely would constitute the use of a sole source contract in a setting in which there are numerous choices of actuaries who might be able to perform the work, and General Services who controls sole source purchases would not allow this. Within Bid 119 are various special conditions. Among those is the stated purpose found in paragraph 1.0 and it says: The Division of Insurance Rating (hereinafter "Division") within the State of Florida's Department of Insurance (hereinafter "Department") is seeking one qualified actuary for the rendering of expert services in the area of rating requirements and procedures and review of the rate filings for Health Maintenance Organizations (hereinafter "HMO") and Long Term Care Insurance (hereinafter "LTC"). It is anticipated that the contract will be effective from April 1, 1989 to September 30, 1989, although the precise dates will be dependent upon the date the contract is signed and the schedules of department personnel. By this Invitation to Bid (hereinafter "ITB"), the Division is requesting interested actuaries (hereinafter "respondent") to review the general and specific criteria outlined in this ITB and to present a bid. Other instructions in Bid 119 at paragraph 3.0 state: Emphasis on each bid must be completeness and clarity of content. In order to expedite the evaluation of proposals, it is essential that bidders follow the instructions contained herein. * * * Bidder shall complete the attached Bid Sheet in its entirety. By affixing manual signature on this bid sheet the bidder states that he/she read all bid specifications and conditions and agree to all terms, conditions, provisions, and specifications. Respondent's Credentials and Capabilities Proposals must include substantial evidence of the ability of the respondent to undertake the work required within the parameters and time frames referenced in this ITB. The respondent must be a member of both the American Academy of Actuaries and the Society of Actuaries. Furthermore, the respondent must convincingly demonstrate his or her expertise in both the HMO and LTC areas. Such demonstration must include at least the following: HMO Significant consulting assignment or other work responsibility involving HMO ratemaking in 1988 or 1989. Particulars must be provided, including the specific work product requested, hours spent on the job, the results of the job, and the respondent's precise role. Convincing evidence of familiarity with the Health Maintenance Organization Amendments of 1988 to the Federal Health Maintenance Organization Act. Such evidence might include a completed or ongoing consulting assignment in which knowledge of the new legislation was critical, an article published on the new legislation, or a speech to a professional organization. Public demonstrations of the respondent's expertise in the HMO area, such as speeches, published articles, positions held in HMO professional organizations, or prior full-time employment by an HMO. Assistance in the preparation of HMO rate filings for review by the Department. Assistance in the preparation of rates for federally qualified HMOs. LTC Significant consulting assignments or other work responsibility involving LTC ratemaking in 1988 or 1989. Particulars must be provided, including the specific work product requested, hours spent on the job, the results of the job, and the respondent's precise role. Public demonstrations of the respondent's expertise, such as speeches, published articles, or positions held in professional organizations relative to LTC (i.e., committee assignments) OTHER The respondent should also include a description of prior work assignments involving consulting or other services to state insurance departments. This prior work need not be restricted to HMO or LTC. Note: Evidence of the respondent's expertise must be verifiable. Referenced consulting assignments must include the name, address, and telephone number of an employee of the client who can verify the nature of the assignment. Copies of published articles must be provided, along with the name and date of the periodical in which it was published. Also, copies of speeches must be provided, along with the name of the organization to which the speech was given, a contract person, and the date of the speech. * * * (f) Respondent's Bid In preparing a bid, the respondent should make sure that he or she has submitted at least the following information: A demonstration that all requirements in the "Respondent's Credentials and Capabilities" section are met; An explicit statement as to the proposed hourly rate; A clear statement that the respondent is able to perform the required tasks in the prescribed time frames, as described in "Specific Work Product Required". Such information must be provided together with the bid sheet provided in Section 11. A suggested format is shown in Section 10. In both bid invitations, at paragraph 4.0 of the special conditions, bidders are reminded that bids which do not meet the mandatory technical requirements set out in 3.0 and its sub-parts will not be considered for selection and that the bids that are deemed responsive will be evaluated on the basis of cost and the award made to the lowest responsive bidder at an hourly rate of charges. Both invitations at Paragraph 4.1 indicate that the state has reserved its opportunities to reject all bids if that is felt to be in its best interest. Paragraph 5.2 of the invitation is a further reminder to bidders that any bidder desiring to file a protest arising out of the invitation to bid shall do so in a setting in which Section 120.53(5), Florida Statutes controls. Another specification found in both invitations at paragraph 10.0 entitled, "Respondent's (referring to the bid respondents) Credentials and Capabilities." Under that category it is stated that it is recommended that the format found on that page in the bid specifications be used in supplying the information needed to respond to paragraph 3.0 of the bid specifications for both invitations. Under that paragraph 10.0 there is a place for the respondent's name, the name of his employer, membership year in the AAA, membership designation in the 50A: FSA and ASA and year the 50A designation was awarded. In Bid 119, beyond paragraph 10.0 are found paragraphs 10.1, 10.2 and 10.3, these paragraphs recapitulate those items and the various sub-parts to paragraph 3.0 and provide space for answers to be given to those inquires concerning the Petitioner's credentials and capabilities. There is a paragraph 11.0 in both invitations entitled "Bid Sheet." It has lines related to the hourly rate, vendor name, name of actuary to render services, mailing address, city, state and zip code, authorized signature both manual and typed, telephone number, and the date of submission. This particular paragraph reminds the bidder that by affixing the signature, this is a verification that all bid specifications and conditions have been read and that the terms and conditions, provisions and specifications are agreed to and that certification is made that the services will be provided at the hourly rates stated. Otherwise the basic format for Bid 120 in terms of special conditions is the same as described for the pertinent paragraphs in Bid 119 that have been set out before with the exception of Paragraphs 1.0, and 3.0 (c). They state the following: 1.0 PURPOSE: The Division of Insurance Rating (hereinafter "Division") within the State of Florida's Department of Insurance (hereinafter "Department") is seeking one qualified actuary for the rendering of expert services pertaining to review of Health Insurance rate filings. It is anticipated that the contract will be effective from April 1, 1989 to September 30, 1989, although the precise dates will be dependent upon the date the contract is signed and the schedules of department personnel. * * * 3.0 (c) RESPONDENTS CREDENTIALS AND CAPABILITIES. Proposals must include substantial evidence of the ability of the respondent to undertake the work required within the parameters and time frames referenced in this ITB. The respondent must be a member of both the American Academy of Actuaries and the Society of Actuaries. Furthermore, the respondent must convincingly demonstrate his or her expertise in rating the filing with the Department the following products: Individual Major Medical Medicare Supplement Long Term care Other types of coverage depending upon the needs of the Department and skills of the respondent. Such demonstration must include at least the following: A high degree of familiarity with Chapter 4-58 of the Regulations of the Florida Department of Insurance. Such familiarity should be demonstrated by the respondent providing evidence that he or she submitted at least twenty- five Health Insurance rate filings to the Department which were approved between January 1, 1988 and February 28, 1989. The consultant should demonstrate familiarity with Individual Major Medical, Medicare Supplement, and Long Term Care policies. Such familiarity should be demonstrated by the consultant providing evidence that he or she submitted at least three filings to the Department in each of those areas which were approved between January 1, 1988 and February 28, 1989. NOTE: Only those filings actually certified by the actuary, as provided in 4-58, may be counted in meeting the above requirements. Bid 120 has paragraph 10.1 that refers back to sub-parts within paragraph 3.0(c) and provides space for answering the request for information concerning credentials and capabilities. In both bids Respondent is critical of the Petitioner for not using the format suggested in the various portions of paragraph 10, in essence filling out the specification sheet in the space provided for the answers which the petitioner would give. Having reviewed these materials associated with each bid invitation, the format idea is not a mandatory requirement, it is a suggested requirement. What is incumbent upon the Petitioner is to comply in substance with the requirements set out in the invitations to bid. In that respect the Petitioner is deficient in a material manner. A copy of the requirements Bid 119 may be found in Respondent's exhibit No. 1 admitted into evidence. Petitioner's response to the invitation to bid in Bid 119 is found within Respondent's No. 4 admitted into evidence. In his statement of credentials and capabilities, Petitioner has not utilized the spaces provided in paragraphs 10.1 through 10.3. Instead he has enclosed a letter that includes a statement of work history and professional experience. Under the category of health maintenance organization, the special conditions of paragraph 3.0(c), there is no statement of a consulting assignment or other work responsibility that would involve HMO rate making in the years 1988 or 1989. Furthermore, there is no convincing evidence of familiarity with the health maintenance organization amendments of 1988 to the Federal Health Maintenance Organization Act. There is no reference to public demonstrations of the Petitioner's expertise in the HMO area to include speeches, published articles, positions held in an HMO professional organization or prior full-time employment by an HMO. While there is an indication of experience in rate review from the regulatory point of view in Florida and Massachusetts, there is no indication as required by the specifications and conditions of the preparation of rate filings to be reviewed by a regulator. Finally, under the category of HMO there is no indication of assistance in the preparation of rates for federally qualified HMOs. In the long term care component of the credentials and capabilities portion of Bid 119, Petitioner has offered no explanation of his background. Under the category "other" Respondent has included a description of prior work assignments involving consulting or other services to state insurance departments. On the other hand he has failed to evidence in more specific terms as the note to paragraph 3.0(c) requires, names, addresses and telephone numbers. A copy of the requirements of Bid 120 may be found in Respondent's Exhibit No. 2 admitted into evidence. A copy of Respondent's reply to the invitation to bid may be found in Respondent's Exhibit No. 5 admitted into evidence. As with the previous Bid 119, in Bid 120 Petitioner did not utilize the space available in writing his answers in paragraph 10.1 which relates back to the requirements for credentials and capabilities as announced in paragraph 3.0(c). Instead Petitioner attached a letter in which he attempts to state his compliance with the requirements of the bid. He sets out comments about his work history and professional experience which do not pertain to rating and filing with the Respondent the products of individual major medical, Medicare Supplement, long term care and other types of coverage depending upon needs of the Respondent and skills of the Petitioner. Within Bid 120 in the requirement for familiarity with Chapter 4-58 Florida Administrative Code Petitioner has indicated some involvement with that regulation. However, he has not shown where he had submitted at least twenty- five health insurance rate filings to the Respondent which were approved between the January 1, 1988 and February 28, 1989. In Bid 120 on the topic of demonstration of familiarity with individual major medical, Medicare Supplement and long-term care policies, Petitioner did not demonstrate that he had submitted at least three filings with the Department in each of those areas which were approved between January 1, 1988, and February 28, 1989. By contrast the Wakely response to the invitation to bid, a copy of which is found in Respondent's Exhibit No. 9 admitted into evidence, has adequately responded to the requirements of the Bid 120 in the areas where the Petitioner has been deficient, as well as other areas. As alluded to before Petitioner has failed to make timely challenge to the conditions and specifications associated with the two invitations to bid. Moreover, while allegations in the formal written protest of April 11, 1989 and further remarks of April 20, 1989 addressed to the Insurance Commissioner, together with the proposed recommended order suggest problems with the conditions and specifications associated with the two invitations to bid, proof at hearing submitted by Petitioner did not confirm these allegations. Except in those areas preferred to in the factual discussion above Petitioner's bid responses are adequate to meet the terms of the invitations to bid.
Findings Of Fact Respondent HRS published ITB 590:2306 for existing rental space in the central area of Brooksville, Florida. The bid solicitation specified a bid opening time and date of 2:00 p.m. July 17, 1991. Petitioner and Intervenor timely submitted sealed bids. They were the only two bidders. Neither they nor anyone else timely filed any protest of the bid specifications, and therefore the specifications are not subject to attack in this proceeding. Petitioner received a notice of intent to award the bid for lease 590:2306 to Intervenor by letter from Respondent dated August 27, 1991 and timely filed its notice of intent to protest and formal bid protest. Petitioner accordingly has standing to bring this proceeding. Intervenor is the intended awardee and as such has standing to intervene. Petitioner submitted the property located at 7348 Broad Street, Brooksville, Florida, and showed in his bid submittal form that his proposed property contained 22,500 net square feet, with future expansion of 2,100 square feet available. When Petitioner submitted his bid, it included a floor plan, site plan, and a PUR 7068 form. A PUR 7068 form is a "Public Entity Crime Certification Statement," a sworn statement under Section 287.133(a) F.S. The ITB included two separate requirements for bidders to establish that they have control over the property that they submit to HRS. HRS' purposes in requiring bidders to demonstrate control are to prevent bids based on total speculation, to establish a reasonable expectation that the bidder can meet his obligations if awarded the bid, and to establish a reasonable expectation that the property can be occupied on time. Item 1 on page 3 provides as follows: Control of property - This pertains to both the structure(s) and proposed parking areas. To submit a responsive bid, a prospective lessor must meet one of the following qualifications: a.) Be the owner of record of the facility and parking areas (submit copy of deed). b.) Be the lessee of space being proposed and present with bid, a copy of lease with documen- tation of authorization to sublease the facility and parking areas through the base lease term and all renewal option periods. c.) Submit documentation of an option to purchase the facility and/or parking areas. d.) Submit documentation of an option to lease the facility with authorization to in turn, sublease. Any lease must encompass the entire time period of the basic lease and any renewal option periods as required the state. e.) Submit form PUR. 7068 Sworn Statement of Public Entity Crimes (Attachment H). Page 12 provides, in part, as follows: In order for a bid proposal to be accepted the items 1 through 6 must be included in the bid proposal. Items 7 through 11 must be included, if applicable. [Items 11 and 13 state:] 11. Documentation showing bidder as controller of property. 13. Public Enemy [sic] Crime Certification Statement A pre-bid conference attended by Petitioner made clear that evidence of control and the PUR 7068 form were two different items. Petitioner testified that he attached the PUR 7068 form as his sole basis for evidencing control of the building and parking spaces he submitted for lease, and acknowledged that, in fact, the form did not provide any information with regard to his control of the buildings or parking spaces offered for lease. Petitioner's assertion that his name on some of his site plans, etc. constitutes evidence of control is not persuasive. Such assertion is not in line with the ITB requirements or even common sense. Petitioner Proctor owned the buildings he offered HRS in his bid submittal. Petitioner offered multiple buildings separated by parking areas and driveways. The property offered by Petitioner was to have built an awning- covered walkway between buildings but the walkway would have to be placed through the driveway area of the property. The expansion area for Petitioner's property designated in its bid submittal was composed of approximately 10 gated warehouse units which would be converted to office space. Petitioner had leased a portion of the same premises to HRS for 15 years, and HRS was still leasing that portion at the time of the bid opening. At the time of the bid opening, another portion of the property Petitioner proposed to be leased to HRS was also already rented to other tenants, including a lease to the Florida Department of Labor which was not scheduled to expire until December 31, 1991, one day prior to HRS' proposed first day of occupancy under the ITB. The space leased to the Department of Labor would require some renovation for HRS' use, at least to connect it on the interior with the rest of the building. The remainder of the second, adjacent, building to be rented under Petitioner's bid would require more extensive renovation to create office spaces to meet HRS' needs. In addition to the Department of Labor, Petitioner was also renting space in the second building to a beauty salon, a book store, an office supply store, a clothing store, and a barber at the time of bid submittal and opening and at the time of the formal hearing. These latter tenants were on month-to-month leases. In order to ensure that there would be time for necessary renovations before January 1, 1992 and further to ensure that the property would be available for occupancy on January 1, 1992, the ITB required in the following unequivocal language that all bidders file tenant acknowledgments of the bid/proposed lease with their bid submittal: Existing Tenants: If the offered space or any portion thereof (including parking areas) is at present occupied or will be covered by an active lease(s) at the stated availability date, written documentation by the tenant indicating acknowledgment of the bid and ability to vacate premises by the proposed date must be included with the bid submittal. [Emphasis added] Petitioner submitted no tenant acknowledgments from any of his tenants with his bid to HRS. Even though Petitioner failed to submit evidence of control in the form of a deed and further failed to submit the required acknowledgments from tenants occupying the premises on the bid date, HRS did not immediately disqualify Petitioner's bid as nonresponsive. Instead, HRS evaluated Petitioner's bid simultaneously with Intervenor TCC's bid. HRS relied on old leases in its files and actual knowledge that monthly rent was paid to Petitioner for its own currently leased space, and HRS ignored the absence of tenant acknowledgments with Petitioner's bid. HRS followed this course of action despite the requirement of the ITB on page 7, item 1 under EVALUATION OF BIDS which unequivocally provides: Bids received are first evaluated to determine technical responsiveness. This includes submittal on bid submittal forms, inclusion of required information, data, attachments, signatures and notarization, etc. Non responsive [sic] bids will be withdrawn from further consideration. The portion of the ITB designated, Documents Required To Be Submitted With Bid Submittal For Existing Buildings on page 12, item 4. required bidders to submit "Scale Floor Plans showing present configurations with dimensions." Page 3 of 22, Item 9.(b) further required that, as a part of the bid submittal, bidders were to provide "A scaled (1/16" or 1/8" or 1/4" = 1'0") floor plan showing present configuration with measurements." Contrary to the ITB requirement, Petitioner submitted a floor plan scaled at 1/20" = 1', which also failed to reflect the present configurations with all measurements. Petitioner's scaled floor plan submitted with his bid was prepared prior to the present addition to one building and contained a hand- drawn configuration without accurate measurements for the northwest corner of one building. The term of the lease as shown on the ITB and Bid Submittal Form was 9 and one-half years with an option to renew for 2-5 year renewal periods. At the time of the bid opening on July 17, 1991, the bid submitted by Petitioner failed to have any proposed rental rates shown for "Renewal Options: Option II years 1 through 5." HRS permitted Petitioner to correct or supplement its bid after the bid opening (same date and place) to cover this material omission. Page 6, item 4 of the ITB provided for the property owner or other bidding entity to sign the bid submission. The pertinent part states: 4. Each bid submitted shall be signed by the owner(s) corporate officers, or legal representative(s). The corporate, trade, or partnership title must be either stamped or typewritten beside the actual signature(s). If the Bid Submittal is signed by an Agent, written evidence from the owner of record of his/her authority must accompany the proposal. ALL BID SUBMITTAL SIGNATURES MUST BE WITNESSED BY TWO PERSONS. [Emphasis appears in ITB] Petitioner Proctor signed his bid submittal in proper person. TCC's bid submittal was signed by Sharon K. Lane, "Executive Director," of TCC Number 3 Ltd. Inc., Intervenor herein. At all times material, TCC Number 3 Ltd. Inc. has been a Florida corporation. At the time of the bid opening, Ms. Lane was TCC's sole shareholder and "all officers." At the time of formal hearing, Ms. Lane remained the sole shareholder, but others had assumed some of the corporate offices. Her status at the time of the bid submittal was sufficient for her to bid on behalf of the TCC corporation and to execute the PUR 7068 form on that corporation's behalf. Intervenor TCC submitted the required PUR 7068 form, but TCC submitted as sole evidence of control an undated, unrecorded "Contract for Sale and Purchase" by and between Hernando Plaza Ltd. as Seller and Intervenor TCC as Buyer, for the property which Intervenor was offering for lease to HRS. The best date assignable to this document is April 29, 1991. It was executed on behalf of Hernando Plaza Ltd. by Edward M. Strawgate and Harold Brown representing themselves as general partners of the limited partnership. TCC's obligation to proceed to closing under the foregoing contract was contingent upon TCC's securing an anchor tenant. However, the contract requires TCC to take steps to secure an anchor tenant. By its terms, TCC may purchase the property with or without an anchor tenant, but the contract requires TCC, in seeking an anchor tenant, to set time limits for the lease arrangement with the proposed anchor tenant which do not necessarily accord with the timing of HRS' bid process. HRS accepted TCC's contract to purchase from Hernando Plaza Ltd., as evidence of TCC's control of the premises offered by TCC for lease, believing it to constitute an option to purchase and the necessary evidence of control as required by the ITB. (See, Finding of Fact 6, supra.) At the time of the bid opening, 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 a legal entity other than the record title owner of the property, which record title owner was and is the Victor and Lillian Brown Foundation (Brown Foundation). See, infra. Up to that date, at least, Hernando Plaza Ltd. had represented itself to TCC as the owner of the property. The ITB did not require that an abstract of title be submitted with the bid, and HRS normally does not require an abstract from successful bidders, although the ITB contains provisions for future disclosure from successful bidders. (See, ITB item 5 under Requirements for Bidders to Submit Bids.) Absent some reason to "go behind" facial evidence of control, HRS attempts to protect itself by requiring successful bidders to put up an irrevocable letter of credit for one-half of one percent of the proposed lease rental obligation over the basic lease term as a penalty in the event a successful bidder cannot perform. (See, ITB page 4, item 10.) Hernando Plaza Ltd.'s certificate from the Florida Secretary of State expired December 31, 1981. That fact was advertised and the certificate cancelled July 16, 1982. At that time, Edward M. Strawgate was listed as a general partner and Harold Brown was listed as a limited partner of Hernando Plaza Ltd. Hernando Plaza Ltd. had been administratively dissolved for failure to file its annual report. Subsequent to the time that Intervenor submitted its bid proposal, but prior to formal hearing, Hernando Plaza Ltd. was reinstated by the Florida Secretary of State. Once reinstated, the limited partnership's ability to act related back and validated its prior actions. At all times material, the record title of the property offered by Intervenor TCC for lease to HRS was owned by "Harold Brown, Lillian Brown and Muriel Kahr as Trustees of the Victor and Lillian Brown Foundation." This title is derived from a recorded June 30, 1967 warranty deed from Hernando Plaza Ltd., which deed was admitted in evidence at formal hearing. The warranty deed was not attached to TCC's bid submittal. Neither TCC, the corporation, nor Sharon K. Lane, individually, held any authority as agent to submit a bid to HRS on behalf of the record title owner, the Brown Foundation. There is also in evidence a recorded December 18, 1985 Amendment to Lease between the Brown Foundation and City National Bank. That Amendment to Lease also was not attached to TCC's bid submittal to evidence control of the premises TCC was offering to lease to HRS. That Amendment to Lease also recites that Hernando Plaza Ltd. leased back the subject property from the Brown Foundation by a lease dated June 30, 1967. The June 30, 1967 lease was not recorded, was not part of TCC's bid submittal, and is not in evidence. The December 18, 1985 Amendment to Lease goes on to recite that Hernando Plaza Ltd. has assigned its lessee interest under the June 30, 1967 lease to City National Bank by a March 14, 1978 assignment. There is also in evidence a recorded March 14, 1978 "Assignment of Lessee's Interest in Lease from Hernando Plaza Ltd. to City National Bank." This assignment was not part of TCC's bid submittal. The December 18, 1985 Amendment to Lease goes on to further recite that the Brown Foundation has "agreed to give and grant to [Hernando Plaza Ltd.] an option to purchase the property." The remainder of the December 18, 1985 Amendment to Lease details the terms or conditions of the option to purchase granted by the Brown Foundation to Hernando Plaza. For instance, in order to exercise that option to purchase the subject property from the Brown Foundation, Hernando Plaza Ltd., among other requirements, would have to demonstrate that all the terms of the unrecorded June 30, 1967 lease are "in good standing." One may reasonably infer that "in good standing" would at a bare minimum mean that the rents under the lease are paid current at the time the option is exercised, but what the other terms of the lease might be are subject to pure conjecture. TCC's bid submittal did not include documentation that the June 30, 1967 lease was "in good standing." There is also in evidence a recorded June 7, 1989 Trustee's Deed (quitclaim deed of the trustee's interest) from City National Bank's successor bank/trustee to Hernando Plaza Ltd. The Trustee's Deed also was not attached to TCC's bid submittal. On the date of bid submittal/opening neither TCC, the corporation, nor Sharon K. Lane, individually, held any authority as agent to submit a bid on behalf of Hernando Plaza Ltd. or City National Bank's successor. At formal hearing, TCC submitted an October 24, 1991 written hearsay statement by Harold Brown as Trustee of the Brown Foundation to the effect that Hernando Plaza Ltd.'s December 18, 1985 option to purchase the property from the Brown Foundation was "in full force and effect" and that the June 30, 1967 lease back from the Brown Foundation to Hernando Plaza Ltd. was "in full force and effect and that the lessee is in good standing thereunder." Assuming these items may be considered in this proceeding pursuant to Section 120.58 (1) F.S. as supplementing or explaining direct evidence, they still do not clarify in any way what all the terms of the unrecorded 1967 lease are or that those terms will remain in good standing on the date in the future that Hernando Plaza Ltd. elects to exercise its option, if it elects to exercise its option to purchase the property from the Brown Foundation so that Hernando Plaza Ltd. may, in turn, convey the property to TCC, pursuant to Hernando Plaza Ltd. and TCC's April 29, 1991 contract for sale and purchase. Oddly enough, there is further explanatory hearsay that on October 24, 1991, Harold Brown was a trustee of the Brown Foundation and that he also was the sole limited partner of Hernando Plaza Ltd., although TCC's contract with Hernando Plaza for sale and purchase previously indicated Harold Brown was one of two general partners. Hernando Plaza Ltd.'s option to purchase the property from the Brown Foundation must be exercised by Hernando Plaza Ltd. before Hernando Plaza Ltd. can honor its contract to purchase/sell to TCC. Since there is no record evidence that the June 30, 1967 lease from the Brown Foundation as lessor to Hernando Plaza Ltd. as lessee will be in good standing on whatever future date Hernando Plaza Ltd. attempts to exercise its option with the Brown Foundation, one may only speculate both as to when and if TCC will be able to purchase the property from Hernando Plaza Ltd. TCC has only an option to become owner of the subject property at some unspecified date conditioned upon Hernando Plaza Ltd.'s first successfully exercising its option from the Brown Foundation and further conditioned upon all the terms of TCC's contract with Hernando Plaza Ltd. Apparently, TCC's only recourse to enforce its contract with Hernando Plaza Ltd. is a Circuit Court action for specific performance. TCC also submitted a site plan and floor plan with its bid submittal. The ITB required that offices on outside walls must provide windows. TCC's plans did not reflect windows in two sides of the building, but given HRS' retaining the right to partially design and locate its own halls and offices during the building's renovation, TCC's failure to show windows in the two outside walls is not, in and of itself, a material, disqualifying deviation from the ITB so as to unilaterally render TCC's bid nonresponsive. HRS staff member Donald J. Cerlanek prepared a bid synopsis of each bid. This involved completing a form from the HRS leasing manual which illustrates the characteristics of each of the bids. The bid requirements included evaluation criteria and a maximum amount of points which could be awarded for each criteria item. Five HRS bid evaluation committee members executed no conflict of interest forms. These were: Thomas C. Little Jr., David Thomley, Sylvia Smoot, Harvey Whitesides, and Mary Hawks. All committee members were given copies of the bid synopsis form to use in evaluating the properties submitted by Petitioner and Intervenor. Some of the committee members did not obtain or review the actual bid submissions of each of the bidders, but all of them had access to the bid submissions and read the bid synopsis forms for both Petitioner's and Intervenor's bid submittals. The bid evaluation committee members, except for Mary Hawks, made site visits to the properties submitted by Petitioner and Intervenor. Ms. Hawks essentially acted only as a facilitator or conduit for the evaluations of the other four evaluators as set out infra. The four site evaluators took notes regarding each location. The four site evaluators each assigned numerical weights to each item of evaluation criteria except for the rent and renewal rent portions of the evaluation criteria. Although on their site visits some committee members visiting TCC's site may have seen a color version of an artist's rendering of what TCC's project could look like after renovation was complete, a black and white version of the same artist's rendering was attached to TCC's bid submittal to which all committee members had access, and it is found that this situation in and of itself presented no false or misleading information nor constituted any prejudice to a fair bid process/evaluation. Likewise, although some evaluators discussed expansion prospects with TCC's and/or Proctor's on-site representatives, the evidence is credible and persuasive that each evaluator who visited the sites assessed the projects' respective expansion prospects substantially upon what they saw on each site and had experienced in Proctor's existing facility. The points awarded and reasons for the recommendations of each evaluator who visited the sites were reasonably based on specific needs of HRS. These specific needs of HRS were reasonably articulated by the two evaluators who made on-site inspections and who also testified at formal hearing and were reasonably set out in writing in the written notes of the two other evaluators who did not testify. Thomas C. Little, Jr., testified that he found the Intervenor's property superior as a result of the security problems at Petitioner's locations, the closer proximity of the courthouse, hospital, and health department to Intervenor's property and the superiority of a single building offered by Intervenor versus multiple buildings offered by Petitioner. Additionally, he found the esthetics of Petitioner's buildings lacking and expansion offered by Petitioner limited and was concerned that HRS would outgrow the space due to the fact that their service area is one of the most rapidly growing in Florida. His contemporaneous notes were to the same effect. Sylvia Smoot, also a member of the evaluation committee, testified that she found Intervenor's facility superior based on its proximity to the courthouse, hospitals, and other key locations, and its flexibility of design and concentration of space in one building. She further found Petitioner's location lacking as a result of the three separate buildings, its limited expansion room, and the necessity for redirecting clients between buildings, and the difficulty for elderly and handicapped clients accessing Petitioner's building. Her contemporaneous notes were to the same effect. Evaluators Whitesides and Thomley made substantially similar contemporaneous notes justifying their scoring of the two bidders. Three of the four site evaluators met as a group following the site visits and discussed the properties submitted by Petitioner and Intervenor. All four of the site evaluators made recommendations to accept the property for lease proposed by Intervenor, but they did not all confer and jointly develop a single recommendation to the facilities manager. The points assigned by each of the four site evaluators for the properties proposed by Petitioner and Intervenor were as follows: Evaluation Committee TCC Number Member's Names Proctor's Points 3's Points Thomley 75 98 Little 78 93 Whitesides 74 95 Smoot 80 91 307 377 The rent portion of the evaluation criteria was ascertained by applying present value methodology as set forth in the HRS leasing manual to the annual rents offered by the bidders. The discount factor was 8.32 percent. The present value of Proctor's bid was $1,934,038 and the present value of TCC's bid was $2,028,316. The leasing manual is considered advisory only. It advises present values be made, a determination of the difference in amounts be calculated and a comparison of the difference be made to determine a percentage. Thereafter, the percentage is applied to the maximum amount of points allocated for rent in the evaluation criteria. The lowest present value receives the maximum number of points allocated, and, thus, Proctor was awarded 35 points. TCC received 33 points, based upon the fact that its present value of rent was close to the present value submitted by Proctor. No penalty is imposed to a bidder whose rental amounts is higher than the lowest bidder. No benefit is conferred upon the lowest cost bidder over the next lowest bidder. Mary Hawks, Manager for Administrative Services, Department of Health and Rehabilitative Services, received each of the individual evaluation recommendations from Thomley, Little, Whitesides and Smoot. As a result of travel restrictions placed on the HRS, the four site evaluators and Ms. Hawks, who was also a fifth committee member, did not meet as a group following the site visits although three of the four site evaluators did meet collectively following the site visits. (See Finding of Fact 43-44, supra.) The committee members could have met by telephone conference call but Mary Hawks found it unnecessary to do so because there was such a clear evaluation in favor of Intervenor based on the total composite evaluation scores of 377 for Intervenor and only 307 for Petitioner, out of a total of 400 points. She assigned no points herself but approved their recommendations and forwarded a single recommendation in favor of TCC for ultimate approval by HRS management. Mary Hawks had spoken to the evaluation committee members subsequent to the evaluation and no member had expressed any reservation regarding his/her evaluation or a need to meet to discuss anything additional regarding the bid evaluation. The HRS Intent to Award to TCC subsequently issued. The evaluation process and formula for rent evaluation are not among the more commonly used methods but were reasonable and rational and fairly applied to the bids in this case. No conflict of interest in the evaluation committee members was demonstrated by Petitioner in these proceedings.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Health and Rehabilitative Services enter a Final Order finding that: The bid of TCC Number 3 Ltd. is nonresponsive; The bid of Derick Proctor is nonresponsive; Declining to award the bid for Lease No. 590:2306 to either bidder. RECOMMENDED this 20th day of December, 1991, at Tallahassee, Florida. ELLA JANE P. DAVIS, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of December, 1991. APPENDIX TO RECOMMENDED ORDER, CASE NO. 91-5963BID The following constitute specific rulings pursuant to Section 120.59(2) F.S. upon the parties' respective proposed findings of fact (PFOF): Proctor's 74 PFOF: The following PFOF are accepted, except to the extent they are unnecessary, subordinate, or cumulative to the facts as found in the recommended order (RO). Unnecessary, subordinate, or cumulative material has not been utilized: 1-3, sentence 1 of PFOF 4, 5-6, 9, 11-12, sentence 1 of PFOF 13, sentence 1 of PFOF 16, 17-26, sentence 1 of PFOF 29, 30-33, 35-36, sentences 1 and 4 of PFOF 38, 39-41, 44-54, 56-57, 60-61, 63. The following PFOF are rejected because they are not FOF as framed but constitute a proposed conclusion of law (PCOL) or are rejected because they constitute mere legal argument: sentences 2 and 3 of PFOF 4, sentence 2 of PFOF 16, 34, 43. The following PFOF are rejected because, as framed, they constitute mere recitation of isolated, unreconciled testimony or other record evidence or are not supported by the greater weight of the credible record evidence as a whole. However, the subject matter is covered in the RO as proven and supported by the competent, substantial evidence in the record: 10, sentence 2 of PFOF 13, 14- 15, sentence 2 of PFOF 29, sentences 2 and 3 of PFOF 38, 55, 58. PFOF 7-8 are accepted as modified because parts are unnecessary, subordinate, or cumulative to the facts as found and other parts are mere recitations of unreconciled portions of the record and legal argument. The following PFOF are accepted in part but not utilized because parts are unnecessary, subordinate, or cumulative to the facts as found, and other parts are rejected as immaterial to the dispositive issues herein, although correctly quoted from the record: 68-73. The following PFOF are rejected as immaterial or not dispositive: 27-28, 37, 42, 59, 62, 65, 67, 74. The following PFOF are covered in preliminary material: 64, 66. HRS 21 PFOF: The following PFOF are accepted except to the extent they are unnecessary, subordinate, or cumulative to the facts as found in the RO. Material unnecessary, subordinate, or cumulative has not been utilized: 1-4, 6-8, 11-12, 16-19. The following PFOF are rejected because they are not FOF as framed but constitute PCOL or are rejected because they constitute mere legal argument: 5, 9-10, 14-15, 21. The following PFOF are rejected because, as framed, they constitute mere recitation of isolated, unreconciled testimony or other record evidence or are not supported by the greater weight of the credible record evidence as a whole. However, the subject matter is covered in the RO as proven and supported by the competent, substantial evidence in the record: 20. PFOF 13 is accepted as modified to correctly reflect the credible record evidence as a whole. TCC Number 3 75 PFOF: The following PFOF are accepted except to the extent they are unnecessary, subordinate, or cumulative to the facts as found in the RO. Material unnecessary, subordinate, or cumulative has not been utilized: 1-31, 34-38, 42- 45, 47-48, 56, 58-60, 64-69, 71-75. The following PFOF are rejected because they are not FOF as framed but constitute PCOL or are rejected because they constitute mere legal argument: 32. The following PFOF are rejected because, as framed, they constitute mere recitation of isolated, unreconciled testimony or other record evidence or are not supported by the greater weight of the credible record evidence as a whole. However, the subject matter is covered in the RO as proven and supported by the competent, substantial evidence in the record: 33, 40-41, 53-55, 57, 61-63, 70. The following PFOF are rejected as immaterial or as not dispositive: 39, 46, 49, 51-52. PFOF 50 is not a sentence, but the subject matter is covered in the RO as understood. COPIES FURNISHED: Thomas V. Infantino, Esquire Infantino & Berman Post Office Drawer 30 Winter Park, FL 32790 Ralph McMurphy, Esquire HRS District 3 Legal Office 1000 Northeast 16th Avenue Gainesville, FL 32609 B. Gray Gibbs, Esquire Sam Power, Clerk Bette B. Lehmberg, Esquire Department of Health and Suite 800 Rehabilitative Services One 4th Street North 1323 Winewood Boulevard St. Petersburg, FL 33701 Tallahassee, FL 32399-0700
The Issue The issues presented in this proceeding are whether Petitioner submitted the lowest and best bid on CTB 5998 and whether Petitioner is entitled to the bid award.
Findings Of Fact On November 5, 1990, Florida A & M University, acting as the agent of the Board of Regents, issued a Call to Bid (CTB) for the repainting and renovation of Bragg Stadium (repainting project). The total project was estimated to cost $595,000.00. The funds for the project would come from the Public Education Capital Outlay and Debt Service Trust Fund appropriated by the legislature and passed into law in the State's budget. 1/ Specifically, the funds for the repainting project were appropriated by the legislature as a specific line item in the 1990-1991 budget. The line in the budget read, "Fire Code Corrections/Repainting-Bragg Stadium (includes $490,000.00 Reimb. to Aux. Fund), of $682,000.00." The $682,000.00 figure was obtained from several documents submitted by FAMU to the Board of Regents. The Board of Regents then submitted the University's budget requests to the Commissioner of Education who, in turn, submitted an integrated budget to the governor and legislature. See Chapter 216 and 235, Florida Statutes, for the specifics of this budgetary process. The beginning of the budgetary process in relation to the repainting project occurred on October 16, 1989, when Louis A. Murray, the Associate Vice President of Florida A&M sent a document titled "the University's 1990-91/1992- 93 Capital Improvement Fee Project List for Legislative Consideration" to Dr. Carl Blackwell, the Vice Chancellor for Budgets. The document contained two attachments entitled "Capital Improvement Fee Project List, Project Information Sheet" (Project Information Sheet) for the fire code corrections at Bragg Stadium and the repainting of Bragg Stadium. It also included a Project Information Sheet for the remodeling of the Commons Building. The Project Information sheet dealing with the repainting and renovation of Bragg Stadium contained the amount of funding being requested by FAMU for the repainting project and a breakdown of the project's estimated costs. The project cost detail for the repainting of Bragg Stadium states: Construction $495,000.00 (Assumes bid date of 1991) Professional Fees . . . . 43,000.00 Resident Supervision . . . (No entry) Equipment . . . . . 30,000.00 Contingency . . . . . 27,000.00 Total Project Cost: $595,000.00 Importantly, the Project Information Sheet for the repainting of Bragg Stadium contains the basis utilized by FAMU to arrive at the repainting project's estimate. FAMU represented in the Project Information Sheet as follows: The basis for the estimate is the bid experience of a prior advertisement of the project by our own Plant Operations Maintenance Office, which came in at over $400,000. 2/ This estimate was again verified in a letter, dated October 25, 1989, from Dr. Murray to Dr. Blackwell. The letter states, in part, as follows: . . . . Since the opportunity for completing this project is between football seasons, the University wishes to advance dollar requirements from its Auxiliary Trust Fund with expected reimbursement from Capital Improvement Trust Fund after Legislative approval on July 1, 1990. This action will permit us to proceed with the Bid process and construction contract through completion before the 1990 football season. The scope of this project is summarized as follows: This project includes sandblasting, repainting and structural repairs for Bragg Stadium. Sandblasting and repainting is estimated at $415,000, while structural repair, primarily isolated rust spots, will cost approximately $75,000. . . . . The total estimate in Dr. Murray's October 25, 1990, letter was $490,000.00. It was this letter which prompted the parenthetical language in the line item of the General appropriations act for 1990-1991, passed by the legislature and enacted it to law. The Project Information Sheet for the fire code corrections to Bragg Stadium (fire code project) contained a project cost detail as follows: Construction $70,000.00 Professional . . . . . 7,000.00 Resident Supervision . . . (No entry) Equipment . . . . . (No entry) Contingency . . . . . 10,000.00 Total Project Cost: $87,000.00 The contract for the fire code corrections was let for bid prior to the repainting project. The amount of the contract for the fire code project was approximately $107,000.00. This contract amount exceeded the amount of the construction portion of the Project Cost Detail of $70,000.00 shown in the Project Information Sheet for the fire code project. Dr. Murray testified that this action was acceptable because it was within the discretion of Florida A&M to use the $682,000.00 appropriation to perform the fire code project in any amount it deemed appropriate, without regard to the break-outs shown in the Project Information Sheets. However, even assuming the correctness of Dr. Murray's position and deducting the amount of the fire code project's contract and the architectural fees of $7,000.00 listed in the Project Information Sheet, $568,000.00 of the original budgeted amount of $682,000.00 would remain for use on the repainting project. Florida A&M University, also prepared a document titled, "Summary of Capital Improvement Fee Projects for 1990-91/1992-93." The document is a summary of Florida A&M's budget requests for those years. This document also lists the fire code project and the repainting project along with the requested funding for those projects for the years 1990 through 1991. The funds requested for the projects are broken into three categories; Planning, Construction and Equipment. The entries for the repainting project show that the amount of $522,000.00 is for "Construction". The $522,000.00 figure was obtained by taking the $495,000.00 figure for construction contained within the Project Information Sheet for the repainting project, and adding the amount of the contingency cost ($27,000.00) for the project which was also shown on the Project Information Sheet. The combined total for the two projects was $682,000.00, the exact amount appropriated by the legislature for the two projects. Once the legislature had appropriated the money, FAMU, on November 5, 1990, requested that A Capital Outlay Implementation Plan be established with the Capital Outlay Trust Fund. The establishment of such a Plan is similar to creating a special account within the trust fund from which the University can draw. On November 26, 1990, the Plan was established for both projects in the amount of $682,000.00, as had been appropriated by the legislature. 3/ The Capital Outlay Implementation Plan contained a section titled, "estimated budget". The estimated budget contained estimates for the various phases of both projects as follows: Construction. $565,000 Professional Fees. 50,000 Furnishings and Equipment. 30,000 Contingencies. 37,000 .................................$682,000 Significantly, these documents were the only pre-established construction budgets developed by FAMU prior to the opening of the bids in this case. 4/ The specific pre-established construction budget for the repainting project was $522,000.00. Later, after the filing of the bid protest, FAMU would attempt to render a strained interpretation of the phrase "pre-established construction budget" contained in the bid specifications and engage in some inappropriate accounting in order to create several lower budget estimates. The Bid Package for CTB 5998 provided in the "Instructions to Bidders", Item D-21, Rejection of Bids, as follows: The owner reserves the right to reject any and all bids when in the opinion of the owner such rejection is in the best interest of the owner. The Bid Package further provided in the "Instructions to Bidders" at B-23, Contract Award, page 16 of 106, in relevant part: The contract will be awarded by the Florida Board of Regents for projects $500,000 or more, and by the President of the University, on behalf of the Florida Board of Regents, for projects of less than $500,000.00, to the lowest qualified and responsible bidder provided the bid is reasonable and it is in the best interest of the owner to accept it. . . . The contract award will be made to the responsible bidder submitting the lowest responsible aggregate bid within the pre-established construction budget. The aggregate bid shall consist of the base bid plus accepted active alternate bids, or less accepted deductive alternate bids, applied in the numerical order in which they are listed on the bid form. If the base bid exceeds the amount of the pre-established construction budget, the owner may reject all bids. (Emphasis added) A mandatory pre-bid conference was held on December 6, 1990, and was attended by seventeen contractors, including Petitioner. By the terms of the bid package, the bid opening date was set for December 18, 1990. However, by addendum, the bid opening date was extended to December 21, 1990. Seven bids were submitted in response to the original solicitation. 5/ The bids were opened at 10:00 a.m. on December 21, 1990, at the conference center of Florida A&M University. The bids were opened by Chuks Onwunli on behalf of Florida A&M, and tabulated by William Sabella, a representative of the architectural firm , Barnett, Fronczak Architects, the consulting architects for the repainting project. The opening and tabulation of all the bids was recorded on a document titled "Bid Tabulation". The result of the opening was that Phoenix Coating was the low bidder with a bid of $419,000.00. Feimster-Peterson, Inc., was the second lowest bidder with a bid of $474,320.00, and Monoko, Inc., was the third low bidder with a bid of 487,462.00. The four other bidders listed on the bid tabulation sheet were all over the amount of $490,000.00. 6/ As can be seen from the numbers, the top three bids were well within the pre-established construction budget for the repainting project. On December 21, 1990, Feimster-Peterson sent a Notice of Protest by telecopy and overnight delivery for delivery on Monday, December 24th. The basis of the protest was that the low bidder, Phoenix Coating, was not responsive because it had not attended the mandatory pre-bid conference and had not complied with the minority participation requirements of the specifications. On December 28, 1990, Feimster-Peterson sent its formal protest to Forrest Kelly, the Director of Capital Programs at the Florida Board of Regents by telecopy and by overnight delivery with delivery on December 31, 1990. The formal protest was filed in a timely manner. On or about January 14, 1991, Oscar Martinez, the Purchasing Director for Florida A&M issued a letter regarding Bid No. 5927 for the repainting and renovation of Bragg Stadium. 7/ The letter rejected all seven bids. Phoenix Coating's bid was found to be nonresponsive because it did not meet the 15% minority participation requirements of Bid 5998 and because the company had not attended the December 6, 1990, mandatory pre-bid meeting. Because Phoenix Coating's bid was non-responsive, Petitioner became the lowest responsive bid on CTB 5998. The letter further advised that the other six bids, including Petitioner's bid, were rejected because all six bids allegedly exceeded the pre- existing construction budget estimate for the project. The letter did not contain any language affording Petitioner a clear point of entry as required by Section 120.53, Florida Statutes. The letter did indicate that the University would modify the scope of work. Attached to the same letter was a new invitation to bid. Clearly, at this point in time, FAMU knew or should have known that there was a bid protest filed with it which was unresolved and which required a formal administrative hearing. However, during this time instead of following its statutory duties under Chapter 120, Florida Statutes, FAMU, at its peril, chose to re-let the project for bids. The new bid opening was set for February 28, 1991, and a new mandatory pre-bid meeting was also set for February 28, 1991. The bid deadline was extended to March 21, 1991. The scope of the work was not significantly altered in the re-bid. 8/ On or about January 16, 1991, counsel for Feimster-Peterson sent a letter to the Florida Board of Regents. The letter was prompted by Robert Petersen's, president and stockholder of Petitioner, belief that something was not right about the monetary and funding claims that FAMU was putting forth as its basis for rejecting all the bids. In essence, the numbers Mr. Petersen was aware of, which did not include any of the Project Information Sheet figures referenced above, did not make any sense to him. The letter stated, in part, as follows: Re-bidding the Project is unfair to all bidders now that the results of the first bid have been made public. Each bidder now has a target . . . to shoot at which will override the customary free market environment. Rewriting the Specifications will not eliminate this effect. Be advised that Feimster-Peterson requests the opportunity to either see the estimates or negotiate with the Board to reach a mutually acceptable scope of work. I request that you delay re-bidding until this option can be explored. (Emphasis added). On January 23, 1991, counsel for Feimster-Peterson again wrote to the Office of General Counsel at Florida A&M University and stated in relevant part: This letter is to reiterate our concern for the actions taken by the Florida A&M Purchasing Department and regarding the painting contract for Bragg Stadium. We filed bid protest for the Florida Board of Regents filed on December 28, 1990 pursuant to paragraph B-22 of the bid documents. Neither the Florida Board of Regents or the administration of Florida A&M has acted upon our bid protest. The bid protest remains unresolved and we intend to pursue the administrative remedies provided to us through the bid protest procedure. Moreover, it is our position that the decisions taken by the Florida A&M Purchasing Department subsequent to our filing may be included and adjudicated within the administrative procedures of the original bid protest . . . Mr. Martinez apparently takes the position that a new bid protest filing is necessary to formally dispute his decision [about the University's available budget]. As indicated, we disagree and intend to dispute this action within the existing, unresolved bid protest . . . By indicating the precise amount of the budget, Mr. Martinez has eliminated the basic purpose of competitive bidding, which is to achieve the lowest responsive price. All bidders now have a target price, and a minor modification of the specifications will not eliminate this effect. This serves neither Florida A&M's interest nor the interest of the original responsive bidders. Feimster-Peterson has requested that negotiations be commenced so that a mutually beneficial contract price be determined and the contract work commenced. To date, Mr. Martinez has refused to enter such negotiations and have given several oral, unsatisfactory reasons for this position. The Purchasing Department's refusal to negotiate with Feimster-Peterson, the lowest responsible bidder, should be clearly articulated in writing and sent to us. Feimster-Peterson believes such negotiations may prove successful, and work could commence without further delay or expense to Florida A&M . . . . (Emphasis added). Feimster-Peterson intends to pursue its rights under the bid protest originally filed on December 28, 1990. As low responsive bidder, Feimster-Peterson is entitled to an award of the contract . . This letter was sent by both telecopy and Federal Express to Mr. Holifield at the Office of the General Counsel and added the additional issues of whether FAMU's action in regard to this bid constituted bid shopping and whether Petitioner's bid, in fact, exceeded the estimated construction budget for Bid 5998. 9/ Significantly, the Martinez letter did not mention that Respondent was rejecting Petitioner's bid because the University believed that it could increase the number of contractors participating in a re-bid and could achieve a lower price by re-bidding the project. This issue was raised for the first time at the hearing. In that regard, the evidence clearly indicates that Respondent was attempting to shop its bid in order to obtain a lower price by re-bidding the project. Bid shopping is a process by which the general contractor or, as in this case, the owner of a project attempts to play off one bidder against another bidder in order to obtain a lower price. Bid shopping is done either by establishing a target figure which is represented to bidders to be a number which must be beaten in order to obtain the contract; or by the bid shopper relaying the amount of a competitor's bid to a bidder or group of bidders in order to encourage the bidder or group of bidders to lower its bid to below that of the competitor in order to secure the contract. A basic assumption in bid shopping is that the scope of the work is not significantly altered in order to lower the cost of the project. Bid shopping is considered to be unethical in a public competitive bidding situation and has been disapproved of by the Florida courts. In this case, Respondent established a target price in its letter of January 14, 1991, by communicating the amount of the alleged overage, enabling a bidder to calculate the budget figures to shoot for and, at the same time, keeping the scope of the work substantially the same in the re-bid. Additionally, the amount of the bids, as well as details involving those bids became public once the bids were opened, converting the possibility of unfair advantage accruing to potential bidders on the re-bid to a probability of such unfair advantage in this instance. 10/ Such a reason for rejecting the bids in this case strikes at the very heart of the bid process, which is to ensure that bidders have an equal and fair opportunity to have their bids considered and prevent an agency from picking and choosing among various bidders or potential bidders. There was absolutely no evidence which indicated that the number of contractors participating in Bid 5998 was non-competitive or was in any way fundamentally unfair. 11/ By rejecting all the bids in order to attempt to shop its bid, Respondent acted in an arbitrary and capricious manner and therefore, its rejection of the bids in this case cannot stand. Additionally, Respondent's attempt to reject the bids in order to allegedly increase the number of bidders participating in the re-bid and thereby reduce the price, violated its own specification in the bid documents which states: The contract award will be made to the responsible bidder submitting the lowest responsible aggregate bid within the pre-established construction budget. (emphasis supplied) By going outside the scope of its bid specifications, Respondent has acted in an arbitrary and capricious manner and may not reject Petitioner's bid on this basis. After the protest of Feimster-Peterson raised the issue of the amount of the budget/estimate and after its request to see the budget, Florida A&M began to review documents to determine its response to Feimster-Peterson. The basis underlying the figures cited in Mr. Martinez's letter of January 13, 1991, was arrived at by subtracting amounts spent by Florida A&M from the $682,000.00 appropriated by the legislature for the fire code and repainting projects. The overage of $55,000.00 claimed in Mr. Martinez's letter of January 14, 1991, was calculated by taking the "proposed budget" of $682,000.00 and subtracting the amount of $257,105.00 "in expenses for the stadium", for an "available balance" of $424,895.00. 12/ It was this account balance which was being claimed by FAMU to be the pre-existing construction budget referred to in the bid documents. Such an account balance does not constitute a pre-established construction budget because the balance was not established prior to the submission or opening of the bids. Additionally, an account balance is simply not a budget as that term is normally defined and used in the bid documents. Mr. Martinez did not identify the source of the expenses or the purpose for those expenditures. Mr. Martinez deferred all questions as to verification of the figures or the purpose of the expenditures to "Bob", which referred to Robert Goodwin, Jr. Mr. Goodwin was and still is, the Director of the Facilities Planning Office of Florida A&M and is responsible for the various purchase orders involved in this case. Mr. Goodwin took his instructions on which purchase order numbers to use from Dr. Murray and/or Dr. Humphries, Associate Vice President and President of Florida A&M University, respectively. For reasons outlined later in this Recommended Order, the expenditures claimed for the stadium are highly suspect. On or about February 6, 1991, Mr. Holifield, General Counsel of Florida A&M University, responded to Petitioner by enclosing a statement of budget estimate for Bid No. 5998. 13/ Attached to Mr. Holifield's letter of February 6th was a memorandum addressed "[t]o whom it may concern" dated February 5, 1991, from Robert Goodwin, Jr., the Director of Facilities & Planning for Florida A&M. The memo stated that the "budget estimate" for the Project was $367,351.00. Mr. Holifield's letter noted that Feimster-Peterson's bid "exceeded the budget estimate by $106,969.00." (emphasis added). He further noted that FAMU had chosen to re-bid the repainting project rather than accept the bid of the Petitioner. Mr. Holifield also addressed the pending bid protest by Feimster-Peterson as follows: Florida A&M University feels that it is the best interest of the citizens and taxpayers of the State of Florida to re-bid this Project rather than to award the job to your client. In view of the discrepancy between the bidder and the client and the estimated budget it would seem that now that you have been provided with the budget estimate, that you and your client would be willing to forego the bid protest which you are attempting to pursue. Rather, it would appear to be far more appropriate for you to simply join in the rebidding process. (emphasis added). Again, the basis for the decreasing budget figure was the legislatively appropriated funds available for the project less amounts which were supposedly attributable to the repainting and fire code projects, i.e. the account balance. However, what the evidence clearly showed was that, like the budget figures underlying Mr. Martinez's assertions in his letter of January 14, 1991, the latest budget figure of $367,351.00 was calculated by Florida A&M subtracting sums for expenditures which were made for projects unrelated to the fire code or repainting projects. In fact, several of the expenditures were for improvements to the public address system at Bragg Stadium. Similarly, some of the amounts claimed to have been expended for the repainting and fire code projects were expended for architectural fees on other projects. 14/ FAMU's officials were aware that such accounting was inappropriate. From this evidence, it appears that FAMU is attempting to spend or has spent money specifically appropriated for two certain purposes on projects unrelated to the appropriation and not approved for such use by either the legislature or the Board of Regents. Since these expenditures are all part of other projects separate and distinct from the fire code and repainting projects, they should not have been subtracted from the amount of money available to FAMU for the repainting project. 15/ There is no doubt that this "budget estimate" and the budget underlying the assertions made by Mr. Martinez in his letter of January 14, 1991, were false and were red herrings, developed after the fact, in an attempt by Respondent to throw Petitioner off the track of an otherwise valid bid protest. Moreover, beyond utilizing improper accounting, one of the most significant facts in this proceeding was that FAMU created no less than eight separate figures which it claimed to be the budgets for this project. Which figure FAMU used depended on who FAMU was dealing with at the time and the result FAMU desired to achieve. Such tactics by an agency are totally unacceptable and the use of such false figures to justify rejection of a bidder's bid is nothing short of bad faith on the part of an agency akin to fraud. Since Petitioner submitted the lowest and best responsive bid, Petitioner, at this point in time, was entitled to the award of Bid 5998. Another point not directly raised by FAMU in this proceeding, but suggested by the underlying facts and necessary to the resolution of this bid protest, is the question of whether bids may be rejected by an agency if the funds necessary to complete the project are no longer available, i.e. the agency has run out of money. On the surface, given the constraints of Florida's finance system, an honest lack of funds would appear to be an appropriate basis for an agency to reject all the bids. See Section 235.42, Florida Statutes. However, in this case, the evidence does not support a finding that the University no longer has the necessary funds to pay for the repainting project since the actual money from the trust fund has not been disbursed to FAMU and since FAMU's representations in regards to the status of the repainting project's account balance appear to be based on unlawful accounting and are less than credible. Since the evidence did not establish that FAMU no longer has the funds necessary to complete the project, Petitioner was entitled to the award of Bid 5998. However, because of FAMU's actions regarding Petitioner's bid protest which actions were highly prejudicial to Petitioner, time had moved on and, on February 25, 1991, FAMU discovered that there was lead in some portion of the paint on Bragg Stadium, in the amount of 1.9% by weight. The test was conducted by Professional Services Industries, Inc. on some paint chips from the stadium. The test utilized by Professional Services is known as the TCLP test. This discovery began a review by Florida A&M, in conjunction with Barnett, Fronczak Architects, of what changes, if any, needed to be made to the Specifications and what options were available for carrying out the repainting of the stadium. 16/ On March 19, 1991, the Project was "cancelled" by Addendum number 4 until the fall of 1991. Presently, it appears uncontradicted that the paint which is on Bragg Stadium contains lead. It is probable that the lead is contained in the primer coat, which is the first coat on the steel. In fact, the current specifications for the repainting project call for a red lead and oil primer coat to be placed on the steel structure of the stadium. Of the options which have been proposed by the architect, two of them assume that the lead paint will not be removed from the structure, but will essentially be sealed in by the new coatings. These options will avoid the creation and need for disposal of any hazardous waste containing lead and should result in either the same cost to perform the work or in a reduction in cost to perform the work. The third option is to completely remove all the paint and possibly create material which may be hazardous waste. This option is essentially the same type of sandblasting called for in Bid 5998, but may require more money to perform. Any possible increase in the cost of Bid 5998 would be due to the greater expense of disposing of any hazardous waste, if any such waste is created by the blasting operation, and whether the presence of the lead is an unforeseen condition as defined in the proposed contract which would entitle Petitioner to an increase of the bid price caused by the potential cost of disposal to it. In this case, the evidence did not demonstrate that the presence of the lead was an unforeseen condition. Article 3.15 of the proposed contract when compared to Article 10.1 appears to comtemplate the discovery of potentially hazardous materials. Additionally, as indicated earlier, the current specifications of Bid 5998 call for a lead primer coat. Under all the facts of this case, the presence of lead or lack of lead in the paint on Bragg Stadium would appear to be a circumstance the risk of which is assumed by the bidder in bidding the project; and therefore, would not be a changed or unforeseen condition which would justify rejecting all the bids. Importantly, the scope of the work, i.e. sandblasting and structural repair, would not change. Sandblasting is the same whether the surface being removed contains lead or does not contain lead. The structural repair required by Bid 5998 is not effected by the presence of lead in the paint on Bragg Stadium. The only differences would occur in the type of equipment used and the type of respirators worn by the workers. The equipment for lead removal has vacuums incorporated in its operation and uses a steel grit instead of sand. The steel grit actually reduces the amount of any potential hazardous waste by compacting it into a smaller volume. The respirators differ in the type of filters. Neither of these differences affect the cost of the work required in Bid 5998. Similarly, disposing of the end product of the blast operation would still be required under Bid 5998 whether the debris contains lead or does not contain lead. The only difference would be the ultimate disposal site of the barrels of debris, i.e whether at a regular landfill or at a disposal site for hazardous waste. All of these differences are already required under EPA, OSHA and DER rules regulating lead abatement, toxic chemicals and hazardous waste and are utilized by Petitioner when it encounters lead in its paint removal operations. Moreover, the bid documents contemplate that the bidder is familiar with all federal, state and local laws and regulations which affect the project in any manner. See Section B-3 "Instructions to Bidders." While it is uncontroverted that the paint contains lead, it is also not clear whether the end product created by a blasting operation would be hazardous waste requiring expensive disposal in a hazardous waste landfill and what amount, if any, would need to be placed in a hazardous waste landfill. The TCLP tests performed by Professional Service Industries were run on paint chips and not the abrasive debris that remains after a blasting operation. Therefore, the TCLP test results have no relevance as to what amount of hazardous waste, if any, would need to be removed from the site. In fact, it is impossible to determine whether the debris left over from the blast operation will be hazardous waste until the blast operation has begun and produced debris sufficiently representative of what may be expected during the course of the work and which is capable of being tested. The issue of lead arose long after the rejection of the bids on the basis of Feimster-Peterson's bid being over the budget and would not have become a potential basis had FAMU acted in a responsible manner in the award of this bid. It is understood that the University and its architects are still trying to determine what, if any, action needs to be taken regarding the presence of lead in the paint. The evidence established that at a minimum the architect would have suspended the project to give them time to study the lead and determine what course of action should be taken. At the most, the architect would have cancelled the project. Added to such an analysis is the fact that the Bid specifications appear to require a red lead and oil primer paint to be placed on the structural steel of the stadium and that under the facts of this case, the presence of lead in the paint on the stadium would not be an unforeseen condition. In either event, the discovery of the lead did not undermine the scope of the repainting project as it is comtemplated in the bid documents and may have only resulted in change orders under the terms of the proposed contract. 17/ The General Conditions of the contract provide in Article 3, Administration of the Contract, paragraph 4.3, Claims and Disputes, subparagraph 4.3.6, Claims for Concealed or Unknown Conditions, as follows: If conditions are encountered at the site which are (1) subsurface or otherwise concealed physical conditions which differ materially from those indicated in the contract documents or (2) unknown physical conditions of an unusual nature, which differ materially from those ordinarily found to exist and generally recognized as inherent in construction activities of the character provided for in the Contract Documents, then notice by the observing party shall be given to the other party promptly before conditions are disturbed and in no event later than twenty-one days after the first observance of the conditions. The Architect/Engineer will promptly investigate such conditions and, if they differ materially and cause an increase or decrease in the contractor's cost of, or time required for, performance of any part of the work, will recommend an equitable adjustment in the Contract Sum or Contract Time, or both . . . . Article 7, Changes in the Work, also provides a mechanism by which the Architect/Engineer and the Owner may order changes in the work after execution of the contract. Paragraph 7.3, Construction Change Directives, provides the mechanism by which the amount of a construction change directive is determined. A change order is simply a revision of the scope of the contract, requiring that something be done differently, that more be done, or that less be done, than what is within the original scope of work of the contract. Article 14, Termination or Suspension of the Contract, paragraph 14.3, Suspension by the Owner for Convenience, provides in relevant part: The owner may, without cause, order the contractor in writing to suspend, delay or interrupt the work in whole or in part for such period of time as the owner may determine. An adjustment shall be made for increases in the cost of performance of the contract including profit on the increased cost performance, caused by suspension, delay or interruption . . . . (Emphasis added). It is clear that conditions, such as the lead in this case, are contemplated by both the bid and the contract which is part of that bid. In this case, but for FAMU's actions, Petitioner would have been awarded the contract prior to the discovery of the lead. Had Florida A&M entered into a contract with Feimster-Peterson to perform the repainting project when it should have, it would have been guided by Article 14.3 of the specifications, "Suspension by the Owner for Convenience." The evidence did not demonstrate that the discovery of the lead would sufficiently change the scope of the repainting project to the extent that a new bid would have to be developed and that the contract terms of Bid 5998 were inadequate to handle any changes in the scope of the work for the repainting project. Such a result is especially desirable where, as in this case, the University has acted in such a way so as to undermine the fairness of the competitive bidding process and is attempting to spend appropriated money in a manner not authorized by statute. In essence, FAMU has undermined the competitive bidding process to the extent that it would be unfair to re-bid the project since it is impossible to remove FAMU's past conduct from any rebid on any re-vamped specifications. The only remedy, in this case is to award Bid 5998 to Petitioner as the lowest and best responsible bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that Florida A&M University enter, on behalf of the Board of Regents, a Final Order awarding Bid 5998 to Petitioner as the lowest, responsible bidder on the repainting project. RECOMMENDED this 18th day of September, 1991 in Tallahassee, Leon County, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of September, 1991.
The Issue The issue in this bid protest is whether Respondent acted arbitrarily when it decided to reject all of the bids it had received in response to a solicitation seeking bids on a contract for roof repairs.
Findings Of Fact On January 10, 2008, the Florida Department of Environmental Protection (the "Department" or "DEP") issued an Invitation to Bid (the "ITB"), the purpose of which was to solicit competitive bids from qualified contractors on a project whose scope of work envisioned repairs to the wind-damaged roofs of several buildings located on the grounds of the Hugh Taylor Birch State Park in Fort Lauderdale, Florida. Some of the buildings to be repaired were single-family residences. Work on these structures accordingly needed to conform to the requirements prescribed in the 2007 Manual of Hurricane Mitigation Retrofits for Existing Site-Built Single Family Residential Structures (the "Manual"), which the Florida Building Commission (the "Commission"), following an explicit legislative directive, see Section 553.844(3), Florida Statutes,1 recently had adopted, by incorporative reference, as a rule. See Fla. Admin. Code R. 9B-3.0475 (2007).2 The Rule had taken effect on November 14, 2007, giving the Manual's contents the same status and force as the Florida Building Code. Id. Just before the Department issued the ITB, the Commission had approved, at a meeting on January 8, 2008, a modified version of the Manual, which it called the 2007 Manual of Hurricane Mitigation Retrofits for Existing Site-Built Single Family Residential Structures, Version 2 (the "Revised Manual"). In consequence of the Commission's approval of the Revised Manual, the Florida Department of Community Affairs ("DCA") caused a Notice of Proposed Rule Development to be published on January 25, 2008, in the Florida Administrative Weekly. This official advertisement announced that the Commission intended to amend Rule 9B-3.0475, so that its incorporative reference would mention the Revision Manual instead of the Manual. See 34 Fla. Admin. W. 461-62 (Jan. 25, 2008).3 DCA caused a Notice of Proposed Rule respecting the intended revision of Rule 9B-3.0475 to be published on February 1, 2008, in the Florida Administrative Weekly. See 34 Fla. Admin. W. 605 (Feb. 1, 2008).4 On February 5, 2008, the Department issued Addendum No. 4 to the ITB (the "Addendum"). The Addendum provided in pertinent part as follows: Bidders shall bid the project as specified despite the recent change in Rule 9B-3.0475 relating to hurricane mitigation retrofits. Any additional water barrier will be accomplished by Change Order after award of the contract. (The foregoing provisions of the Addendum will be referred to hereinafter as the "Directive"). On February 12, 2008, the Department opened the bids it had received in response to the ITB. Ten (out of 12) of the bids submitted were deemed responsive. The bid of Petitioner Spinella Enterprises, Inc. ("Spinella") was one of the acceptable bids. On February 19, 2008, DEP posted notice of its intent to award a contract to the lowest bidder, namely Spinella, which had offered to perform the work for $94,150. The second lowest bidder was The Bookhardt Group ("Bookhardt"). Bookhardt timely protested the intended award, raising several objections, only one of which is relevant here. In its formal written protest, dated March 3, 2008, Bookhardt alleged that "[t]he new State of Florida law F.S. 553.844 was not part of the solicitation." On April 4, 2008, Rule 9B-3.0475, as amended to incorporate by reference the Revised Manual, took effect. See Fla. Admin. Code R. 9B-3.0475 (2008). On May 16, 2008, DEP posted notice of its intent to reject all bids received in response to the ITB. (Bookhardt's protest, which remained pending, had never been referred to DOAH for a formal hearing.) Spinella timely protested the Department's decision to reject all bids. In an email sent to Spinella on July 22, 2008, DEP's counsel explained the rationale behind the decision: The reason the Department rejected all bids follows. When the Department posted the notice of intent to award the contract to Spinella Enterprises, Inc., the second low bidder (Bookhardt Roofing) protested the intent to award. The second low bidder's basis for protesting the intended award was that Addendum 4 directed bidders to ignore certain rules of the Construction Industry Licensing Board [sic], which had become effective after the bid opening, which was not in accordance with the law. As a result, this may have caused confusion and the Department had no assurance that bidders were bidding the project correctly. In addition, the statement in Addendum 4 that the Department would add the required moisture barrier afterward by change order set up a situation where bidders had no idea how much the Department would be willing to pay for the change order. Further, the moisture barrier was not the only thing required by the new rules. Potential bidders may not have bid due to these uncertainties. The Department agreed with Bookhardt's assertions and rejected all bids . . . . Notwithstanding Spinella's protest, the Department issued a second invitation to bid on the project in question. As of the final hearing, the bids received in response to this second solicitation were scheduled to be opened on August 12, 2008. Ultimate Factual Determinations The Department's decision to reject all bids is premised, ultimately, on the notion that the Directive told prospective bidders to ignore an applicable rule in preparing their respective bids.5 If this were true, then the Directive could have been a source of potential confusion, as the Department argues, because a prudent bidder might reasonably hesitate to quote a price based on (possibly) legally deficient specifications. The Directive, however, did not instruct bidders to ignore an applicable, existing rule. Rather, under any reasonable interpretation, it instructed bidders to ignore a proposed rule and follow existing law. Such an instruction was neither confusing nor inappropriate. To be sure, the first sentence of the Directive——at least when read literally——misstated a fact. It did so by expressing an underlying assumption, i.e. that Rule 9B-3.0475 recently had been changed, which was incorrect. In fact, as of February 5, 2008, the Rule was exactly the same as it had always been. (It would remain that way for the next two months, until April 6, 2008).6 DEP's misstatement about the Rule might, conceivably, have confused a potential bidder, at least momentarily. But DEP did not factor the potential for such confusion into its decision to reject all bids, and no evidence of any confusion in this regard was offered at hearing.7 More important is that the unambiguous thrust of the Directive was to tell bidders to rely upon the "not recently changed" Rule 9B-3.0475, which could only have meant Florida Administrative Code Rule 9B-3.0475 (2007) as originally adopted, because that was the one and only version of the Rule which, to that point, had ever existed. Thus, even if the Department were operating under the mistaken belief, when it issued the Addendum, that Rule 9B-3.0475 recently had been amended; and even if, as a result, DEP thought it was telling prospective bidders to ignore an applicable, existing rule, DEP nevertheless made clear its intention that prospective bidders follow the original Rule 9B- 3.0475, which was in fact the operative Rule at the time, whether or not DEP knew it. Indeed, as any reasonable potential bidder knew or should have known at the time of the Addendum, (a) the Commission recently had approved the Revised Manual, but the contents thereof would not have the force and effect of law unless and until the Revised Manual were adopted as a rule, which had not yet happened; (b) the Commission had initiated rulemaking to amend Rule 9B-3.0475 so as to adopt the Revised Manual as a rule, but the process was pending, not complete; (c) Rule 9B-3.0475 had not been amended, ever; and, therefore, (d) the Manual still had the force and effect of law. See endnote 6. The Directive obviously could not alter or affect these objective facts. At bottom, then, a reasonable bidder, reviewing the Directive, would (or should) have concluded either (a) that the "recent change" which DEP had in mind was the Commission's approval of the Revised Manual (or the subsequent announcement of the proposed amendment to Rule 9B-3.0475) or (b) that DEP mistakenly believed the Rule had been changed, even though it had not been. Either way, a reasonable bidder would (or should) have known that the Department wanted bidders to prepare their respective bids based not on the Revised Manual, but the Manual. In other words, regardless of what DEP subjectively thought was the existing law, DEP clearly intended (and unambiguously expressed its intent) that bidders follow what was, in fact, existing law. This could not have confused a reasonable bidder because, absent an instruction to exceed the minimum required legal standards (which the Directive was not), a reasonable bidder would have followed existing law in preparing its bid, just as the Directive required. Once it is determined that the Directive did not, in fact, instruct bidders to ignore an applicable, existing law, but rather told them to rely upon the applicable, existing law (notwithstanding that such law might change in the foreseeable future), the logic underlying the Department's decision to reject all bids unravels. Simply put, there is no genuine basis in logic or fact for concluding that the Addendum caused confusion. The other grounds that DEP has put forward do not hold water either. Contrary to the Department's contention, the possibility that a Change Order would be necessary if an "additional water barrier" were required could not possibly have confused potential bidders or caused them to be uncertain about how much money the Department would be willing to pay for such extra work. This is because Article 27 of the Construction Contract prescribes the procedure for entering into a Change Order, and it specifies the method for determining the price of any extra work. See ITB at 102-05. The fact that the proposed amendment to Rule 9B-3.0475, if it were to be adopted and become applicable to the instant project, might require other additional work, besides a water barrier, likewise could not reasonably have caused potential bidders to refrain from bidding, for the same reason: The Construction Contract contains explicit provisions which deal with the contingency of extra work or changes in the work. Id. In sum, DEP's intended decision to reject all bids cannot be justified by any analysis that a reasonable person would use to reach a decision of similar importance. It is, therefore, arbitrary.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order finding that its decision to reject all bids was arbitrary. Because the Department elected not to comply with the statutory directive to abate this procurement pending the outcome of Spinella's protest, with the result that the contract at issue possibly has been awarded already to another bidder; and because the choice of remedies for invalid procurement actions is ultimately within the agency's discretion, the undersigned declines to make a recommendation regarding the means by which DEP should rectify the harm to Spinella, but he urges that other appropriate relief be granted if Spinella cannot be awarded the contact. DONE AND ENTERED this 2nd day of October, 2008, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of October, 2008.
The Issue The ultimate issues to be resolved in this proceeding are whether the Respondent should award a contract in accordance with an invitation to bid to the Petitioner, to some other bidder, or reject all bids and reissue an invitation. Petitioner contends that it was the low bidder in response to the invitation; that its bid was responsive; and to the extent that it was not responsive, any defects were of a minor sort which should be waived. Petitioner contends that the Respondent has previously waived irregularities such as existed in the Petitioner's bid and should therefore waive them in this case. The Respondent contends that the Petitioner's bid was not responsive, that the irregularities in Petitioner's bid are not minor, that any mistakes the Respondent has made in past acquisitions should not be repeated, and that the contract should be awarded to another company.
Findings Of Fact The Respondent issued an invitation to bid for a project known as the "Animal Science/Dairy Science Building" at the University of Florida. The project was given No. BR-108 by the Respondent. Petitioner was the lowest bidder in response to the invitation. The next lowest bidder, Charles R. Perry Construction Company, submitted a bid approximately $37,000 higher than Petitioner's bid. Perry has not filed any formal protest nor intervened in this proceeding. Petitioner is a responsible contractor and has in the past entered into construction contracts with the Respondent. Petitioner's bid was rejected by the Respondent. The Petitioner protested the rejection of its bid in a timely manner. Paragraph "B-15" of the bid specifications provides in pertinent part, as follows: In order that the Owner may be assured that only qualified and competent sub- contractors will be employed on the project, each Bidder shall submit with his Proposal a list of the subcontractors who would perform the work for each Divi- sion of the Specifications as indicated by the "List of Subcontractors" form contained in these Specifications... only one subcontractor shall be listed for each phase of the work. * * * No change shall be made in the list of subcontractors, before or after the award of a contract, unless agreed to in writing by the Owner. Section "B" of the invitation for bid provided space for the bidder to list the name and address of subcontractors for the roofing, masonry, plumbing, mechanical, electrical, meat processing equipment, and controls and instrumentation phases of the project. In Section "B" of its bid, Petitioner listed two subcontractors for the plumbing, mechanical, and controls and instrumentation phases of the project. Listing two subcontractors does not comport with the bid specification requiring that only one subcontractor be listed for each phase. Petitioner listed two subcontractors because one of the subcontractors submitted a proposal to Petitioner only fifteen minutes prior to the time when the bid had to be submitted, and Petitioner was unsure of whether the last-minute proposal included all of the work that the Petitioner anticipated would be required. In addition, Petitioner felt that one of the subcontractors may not have been acceptable to the Respondent. The requirement that bidders list only one subcontractor for each phase of a project helps to discourage "bid shopping." Bid shopping is a practice whereby a contractor who receives a bid from a subcontractor approaches another subcontractor with that bid and encourages the other subcontractor to reduce its price. If the other subcontractor responds, this reduced price can be taken back to the original subcontractor. The original subcontractor is then confronted with the choices of either lowering its bid or losing the project. Bid shopping that occurs after a bid has been accepted by the owner does not benefit the owner. It benefits only the bidder, who is able to reduce its costs and therefore increase its profit. Requiring that one subcontractor be listed for each phase cannot serve to completely eliminate bid shopping. A contractor could still bid shop by listing itself as the subcontractor, then after winning the contract shop between several subcontractors. A contractor could also bid shop by changing subcontractors after the bid award. In either case, however, the contractor would need to secure the approval of the owner. The practice is thus discouraged. If a bidder lists two subcontractors for a phase of the project, that bidder would have an advantage over those who listed only one subcontractor. Listing two subcontractors enables the bidder to make a choice as to the best subcontract bid at a time later than the choice is made by bidders who list only one subcontractor. In addition, listing two subcontractors makes it easier for the bidder to engage in bid shopping, which would be more difficult for bidders who listed only one subcontractor. Paragraph "B-24" of the bid specifications for this project provides in pertinent part: The Contract will be awarded . . . to the lowest qualified bidder pro- vided his bid is reasonable and it is in the best interest of the Owner to accept it. * * * The Owner reserves the right to waive any informality in bids received when such waiver is in the interest of the Owner. The listing of two subcontractors for phases of the project is not a mere informality in the bid. It is directly contrary to Paragraph "B-15" of the bid specifications. It would not be in the interest of the owner to accept a bid in which two subcontractors are listed for phases of the project. The integrity of the acquisition process would be damaged by allowing such a deviation because a bidder who listed two subcontractors would have gained an advantage over bidders who complied with the bid specifications. It is not in the best interest of the Respondent to waive the defect in the Petitioner's bid. On at least two prior occasions, the Respondent awarded contracts to bidders who listed more than one subcontractor per phase of the work. One of these projects was for a gymnasium at Florida Atlantic University (Project No. BR-603). Another was for a window replacement project at Florida State University (Project No. BR-342). In at least three other projects, the Respondent awarded contracts where the bidder failed to list the name of any subcontractor for one or more phases of the work. These were for the cancer center at the University of South Florida (Project No. BR-569), the student housing facility at the University of South Florida (Project No. BR-576), and an expansion project at Florida A & M University (Project No. BR-343). The bid specifications for all of these projects were not offered into evidence; however, the Respondent had utilized the same specifications as required in this project at all pertinent times. Failing to list any subcontractor for a phase of a project constitutes approximately the same defect in a bid response as listing two subcontractors. It provides even greater opportunities for bid shopping and an advantage to the bidder over those who list subcontractors as required by the specifications. In several other projects, it appears that the Respondent has awarded contracts to bidders whose bids contained defects of the same magnitude, but a different sort than the listing of two subcontractors. It does not appear that the Respondent has awarded contracts where bidders have listed more than one subcontractor, no subcontractor, or otherwise violated bid specifications because of any policy or because of any expressed waiver of the defect. Rather, it appears that the Respondent has not adequately policed bids to determine responsiveness to the bid specifications. This is especially true with respect to the listing of subcontractors. It appears that no one on the Respondent's staff took the responsibility to consider whether one subcontractor was listed for each phase of a project as required in the specifications. The only policy that the Respondent established was a policy of being too lax in examining bids. The Petitioner did not list two subcontractors for various phases of this project because of any reliance on past conduct of the Respondent. Petitioner's agent overlooked the bid requirements in Preparing its bid response. In prior bids submitted by the Petitioner in response to bid invitations issued by Respondent, Petitioner listed only one subcontractor, as required. Generally, unless it is otherwise required, Petitioner prefers to list two subcontractors because of the flexibility it provides to the owner and to Petitioner. Petitioner was not aware that Respondent had previously awarded contracts to bidders who listed more than one subcontractor for a phase of the work when it submitted its bid in this instance.
Findings Of Fact On February 28, 1990, Respondent issued an invitation to bid (ITB) on a construction project referred to as Florida Atlantic University Modulars. The ITB required a base bid and bids on five alternates to the base project. Each bidder was instructed that it must bid on the base project and on each alternate for its bid proposal to be considered responsive. On March 19, 1990, Addendum 1 to the ITB was issued to all prospective bidders. This was an informational addendum and advised the date, time, and location of the posting of the award recommendation. Addendum 1 was not required to be returned by the bidder as a part of the response to the ITB. On March 21, 1990, Addendum 2 to the ITB was issued to all prospective bidders. This was also an informational addendum and advised as to a non- mandatory, pre-bid conference to be held March 27, 1990. Addendum 2 was not required to be returned by the bidder as a part of the response to the ITB. On March 30, 1990, Addendum 3 to the ITB was issued to all prospective bidders. This addendum advised that the date and time for the bid opening had been changed to April 9, 1990, at 2:00 p.m. Addendum 3 also contained modifications, explanations and corrections to the original drawings and specifications which impacted the cost and scope of the project. Immediately above the signature line on the cover page of Addendum 3 was the following: This document must be returned in it's [sic] entirety with the bid. Please sign below to verify that you have read and understand all the changes. Item 2 on page ADD-1 of Addendum 3 required each bidder to submit its per unit price structure with its response to the ITB and provided, in pertinent part, as follows: ... The unit price shall not be included in Base Bid. Submit a separate sheet with bid package. The following instructions are given in Paragraph 1(c) of the Instructions to Bidder: NO ERASURES ARE PERMITTED. If a correction is necessary, draw a single line through the entered figure and enter the corrected figure above it. Corrections must be initialed by the person signing the bid. Any illegible entries, pencil bids or corrections not initialed will not be tabulated. The instructions are repeated in Paragraph 1 of the General Conditions of the ITB: EXECUTION OF BID: ... No erasures are permitted. If a correction is necessary, draw a single line through the entered figure and enter the corrected figure above it. Corrections must be initialed by the person signing the bid. Any illegible entries, pencil bids, or corrections not initialed will not be tabulated. The following is contained as part of the Instructions to Bidder: Failure to complete, sign, seal and return the required documents will result in rejection of your bid. Any questions should be directed to Susan Kuzenka, (305) 761-7460, Purchasing Department, Broward Community College. (Emphasis in the original.) Paragraph 8 of the General Conditions portion of the bid package provided, in pertinent part, as follows: 8. AWARDS. As the best interest of Broward Community College may require, the right is reserved to reject any and all bids and to waive any irregularity in bids received ... On April 9, 1990, Petitioner submitted a bid to Respondent in response to the ITB. Petitioner had received the complete bid package, including all instructions and addenda to the bid package. At the pre-bid conference held March 27, 1990, an employee of Respondent emphasized to the attendees that it was necessary for the bidders to return Addendum 3 in its entirety. Petitioner did not attend the non-mandatory, pre-bid conference. The base bid submitted by Petitioner was $1,085,790.00. The base bid of Double E Construction Co., the next low bidder and the bidder to whom Respondent intends to award the contract, was $1,113,300.00. Petitioner's bid for each of the alternates was lower than that of Double E Construction Co. Petitioner failed to return the entire Addendum 3 as instructed. On page four of the bid package Petitioner acknowledged that it had received Addendum 3, and it signed and returned the cover sheet to Addendum 3 under the language quoted in the foregoing Paragraph 4. Respondent considered this an important requirement because it wanted to prevent a bidder from later claiming that it had not received Addendum 3 or that it had received information different than that contained in Addendum 3. Petitioner made a correction to its bid for Alternate Number 3 found on page 5 of 13 of Petitioner's bid. Petitioner's bid for this alternate was $88,000. In the space for the written amount of the bid, Petitioner's president inserted by hand the words "Eighty-eight Thousand". In the space for the numerical insertion of the bid he initially wrote the sum $125,000 (which was the amount of Petitioner's bid for Alternate 4). He struck through the figure $125,000 and wrote above the stricken figure the figure $88,000. He did not initial his change. Respondent has never accepted changes to price quotations which were not initialed because it is concerned that uninitialed corrections on bids may result in challenges to the integrity of the bid process and may expose its staff to charges of collusion from a disgruntled bidder. Pioneer did not include a unit price structure in its bid as required by Addendum 3. The unit price structure is an informational item that is not separately considered by Respondent to determine the lowest bidder on this project. On April 6, 1990, Petitioner's estimator on this bid telephoned Susan Kuzenka regarding the unit price structure sheet to inquire as to the format that should be followed in submitting the unit price structure. Ms. Kuzenka is named in the Instructions to Bidder as the person in Respondent's purchasing department to whom questions about the bid process should be directed. Petitioner's estimator was told that the unit prices would be required to be submitted by the successful bidder at the pre-construction meeting after the bids were opened, but that the unit price structure need not be submitted with the bid. Petitioner's president verified this information on April 9, 1990, prior to the bid opening, during a telephone conference with the project engineer employed by Respondent for this project. In reliance on the information that was supplied by Respondent's agents, Petitioner did not submit its unit price structure sheet with its bid. Following its examination of all bids, the bid of Petitioner was disqualified on three grounds. The first reason cited by Respondent was that Petitioner failed to return the entire Addendum (3) as required. The second reason was that Petitioner did not initial a correction to a quoted price figure. The third reason was that Petitioner did not include the unit price structure as required in Addendum (3). Petitioner thereafter timely protested its disqualification and the intended award of the contract to Double E Construction Co. Petitioner contends that the reasons cited by Respondent for its disqualification are minor irregularities that should be waived by Respondent. Additionally, Petitioner contends that the third reason should not disqualify it because Petitioner acted in reliance upon the instructions of Respondent's agents in not submitting the unit price structure along with its bid package. This proceeding followed.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent, Broward Community College, enter a final order which denies the bid protest of Petitioner, Pioneer Contracting, Inc. DONE AND ENTERED this 29th day of June, 1990, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer 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, 1990. APPENDIX TO THE RECOMMENDED ORDER The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioners. The proposed findings of fact in paragraphs 1, 2. 6 and 7 are adopted in material part by the Recommended Order. The proposed findings of fact in paragraph 3 are rejected as being subordinate to the findings made in paragraph 10. The proposed findings of fact in paragraph 4 are adopted in part by the Recommended Order. The proposed findings in the last sentence of paragraph 4 are rejected as being unnecessary to the conclusions reached because of the clear instructions contained in Addendum 3. The proposed findings of fact in paragraph 5 are adopted in part by the Recommended Order. The proposed findings in the last two sentences of paragraph 5 are supported by the evidence, but are not adopted as findings of fact because they are unnecessary to the conclusions reached. All proposed findings of fact submitted on behalf of the Respondent are adopted in material part. Copies furnished: Eric L. Dauber, Esquire Beyer & Dauber Suite 5300 2101 W. Commercial Boulevard Ft. Lauderdale, Florida 33309 James D. Camp III, Counsel Broward Community College Fort Lauderdale Center 225 East Las Olas Blvd. Fort Lauderdale, Florida 33301 Janet Rickenbacker Director of Purchasing Broward Community College Fort Lauderdale Center 225 East Las Olas Blvd. Fort Lauderdale, Florida 33301
