The Issue The questions presented here concern the entitlement of the Petitioner or Intervenor to be awarded lease rights under the Respondent's proposed Lease No. 590:8026, in that Petitioner and Intervenor have claimed that entitlement to the exclusion of the other party.
Findings Of Fact Respondent invited bid proposals for the provision of approximately 32,000 square feet of office space for its District VIII operation in Fort Myers, Florida. Petitioner, Chuck Bundschu, Inc., and Intervenor, Walter Lee Johnson d/b/a Walco Leasing Company, responded to the bid proposal by offering to provide the office space. Those responses may be found as part of the Composite Hearing Officer's Exhibit. Following the October, 1981, submittal of bid proposals, a bid evaluation committee was appointed by the Subdistrict Administrator for District VIII to consider the bids. In turn, he afforded guidance to that committee on the subject of the evaluation of the proposed bids offered by Bundschu and Walco, the only bidders for the project. The evaluation committee performed the task of weighing the bid proposals, in keeping with evaluation criteria which are outlined in Respondent's "Facilities, Acquisition and Management Manual" dealing with the procurement of lease space, which criteria are set forth in a form referred to as "HRSM 70-1, page A1-4-8," which is attached to chapter four of the manual. All criteria used for the evaluation process were drawn from that form with the exception of criterion No. 7, related to staff and client marking which was a product of this bid evaluation effort. (A copy of the HRS manual and forms may be found as Respondent's Exhibit No. 1, admitted into evidence. The evaluation committee's summarization utilizing the form criteria and the additional parking criterion may be found as a part of the Hearing Officer's Composite Exhibit, which is a replication of the original.) The HRS manual for procuring leased space is a publication of February, 1980, and establishes uniform guidelines by which bid proposals are considered by local officials who are part of Respondent's organization. Nonetheless, the exact weight to be afforded each criterion outlined in the manual is determined by the local evaluation committee. Weighing concerns the subject of awarding numerical values for beach bidder related to the various criteria with a maximum possible score being 100 points. On the basis of the evaluation performed by the committee, the Bundschu total was 88.25 points and the The Walco point total was 82 out of the possible 100 points. Consequently, the evaluation committee recommended that Bundschu be awarded the lease. Mark Geisler, in his capacity as Subdistrict Administrator, for District VIII, concurred in this evaluation as may be seen in his November 6, 1981, transmittal of the bid materials and associated evaluation, which transmittal may be found as pert of the Hearing Officer's Composite Exhibit. The District Administrator, District VII, in the person of Frances Clendenin, who was acting for the District Administrator, Ivor D. Groves, Ph.D., also recommended acceptance of the Bundschu bid. This position was made known by a memorandum of November 16, 1981. A copy of that recommendation is found as a part of the Hearing Officer's Composite Exhibit. The recommendations spoken to thus far were made known to Lester C. Missman, an official within the Division of General Services of the Department of Health and Rehabilitative Services. This division was, at the time of the bid proposals, and is now, headed by Dr. Homer Ooten, whose function within Respondent's organization includes the responsibility to evaluate lease proposals involving the Respondent agency and to make a final decision on the question of the lease award, based upon a review of the local subordinate unit's recommendation. By this, it is meant that the lease by Health and Rehabilitative Services as "user agency" is signed by Ooten based upon a delegation of authority to him through the vehicle of correspondence signed by the agency head. Ooten, upon considering the recommendation of the District Administrator's office, the Subdistrict Administrator and the evaluation committee, did not find fault with the criteria nor the point weighing scheme used in the evaluation process. He did question the cost analysis performed by the evaluation committee on the subject of client mileage for those clients receiving services from Respondent in a move from the HRS office in the Bundschu building where they were located at the time, to the building where Walco intended to let property. This was a distance of seven/tenths (7/10) of a mile and based upon the number of clients receiving services, there would be an estimated $100,000.00 in client mileage cost increase. This item was not deemed to be an appropriate consideration by Ooten and was disregarded in his review of the cost analysis performed by the evaluation committee. That cost analysis may be found as part of Respondent's Composite Exhibit No. 2, and includes interlineations by Ooten in his opinion on the subject of the cost analysis. That analysis had indicated an overall advantage of approximately $11,000.00 in favor of Bundschu and was premised upon costs related to Item 12 in the criteria, which criterion is cost of moving. It assumed a difference of over $131,000.00 in moving costs, the majority of which costs pertained to client inconvenience ($100,000.00), discounting $120,000.00 plus dollars related to the difference in the bid amount between the Walco and Bundschu bids which bid estimate was in favor of Walco. Ooten's opinion on the subject of the priority of including $100,000.00 plus dollars in clients' travel costs, when considered in the context of point awards under Item 12 in the criteria, lead Ooten to believe that the differential in point awards would not result in a 9.25 value of Bundschu versus a zero value for Walco. In his mind, the differential would be much less. Ooten made his own evaluation of moving costs per se, and through that process determined that approximately $15,600.00 would be necessary for a move into the Walco facility whereas $5,600.00 would be involved in the Bundschu move, which required the expansion of existing space in the Bundschu facility. Based upon an evaluation of the point differential in the rental rate criterion which was a differential of 2, that is 30 points out of a possible 30 for Walco and 28 points out of a possible 30 for Bundschu, Ooten also opined the this was an unreasonable assessment in view of the fact that the Walco bid amount was more than $120,000.00 less than the Bundschu bid. This taken together with the fact that there only existed approximately a $9,000.00 difference on moving costs between Bundschu and Walco, which was in favor of Bundschu, and there having been indicated a 9.25 out of a possible 10 point difference in Item 12 on the question of costs related to moving, led Ooten to believe that the true factual status of criteria Nos. 1 and 12 was not as depicted by the evaluation committee. Per Ooten, with proper assessment Walco would have received a higher point count than Bundschu through the process of applying the bid criteria, as well as being the lower bidder from the point of view of rental rates alone. After several exchanges with the District level personnel of Respondent who had been involved in the lease evaluation process, in which, on two (2) occasions, the local officials continued to support their initial opinion of the propriety of the award to Bundschu, a decision was made at the District VIII level to support the award of the lease to Walco as may be seen in the January 6, 1982, correspondence from the District Administrator to Missman, a copy of which may be found as Respondent's Exhibit No. 4, admitted into evidence. On January 6, 1982, Ooten issued a letter to the District VIII Administrative Services Director indicating the authority to award Lease No. 590:8026, formerly referred to as No. 590:1472, for the benefit of Walter Lee Johnson d/b/a Walco Leasing Company. Having learned of this decision and in keeping with the provision Subsection 120.53(5), Florida Statutes, Bundschu, through counsel, indicated opposition to that award on January 12, 1982, followed by a formal petition letter setting forth grounds for the opposition, which petition was filed on January 19, 1982. This series of documents is part of the Hearing Officer's Composite Exhibit, through copies. Subsequently, Items 4 and 6 in the petition letter were resolved between the parties without the necessity of a hearing and this is borne out by a copy of the February 1, 1982, correspondence from counsel for the Respondent to counsel to the Petitioner, part of the Hearing Officer's Composite Exhibit. The matter was then referred to the Division of Administrative Hearings for a formal Subsection 120.57(1), Florida Statutes, hearing by correspondence from the Assistant General Counsel for Respondent, dated February 4, 1982, a copy of which may be found as a part of the Hearing Officer's Composite Exhibit. There followed the intervention of Walter Lee Johnson as a party of record and the hearing was held on April 27, 1982. Petitioner's first contention deals with the idea of discounting the lease value based on the value of the "stream of future lease payments." This theory is contended for through Robert Sizemore, C.P.A., expert witness of the Petitioner. He would call for the discount of lease payments on the theory that present dollars will have a discounted value in the future, as the lease period unfolds. Taking into account the method of payment by the Respondent and the vicissitudes involved in attempting to establish the value of today's dollar at a future time, this theory of discounted dollars at a 10 percent or 12 percent rate per annum in succeeding years is not indicated. Assessment through the legislative appropriations process of sufficient funds to meet lease payment demands is not contingent upon the value of the dollar at any given point in the history of the lease. Therefore, the "stream of future lease payments" concept is inapplicable here. Likewise, trying to project the value of today's dollar at some future date is so tenuous as to be an unacceptable method to evaluate the competing lease proposals. Finally, even if this method was used, a 10 percent discount rate for inflation would leave approximately a $67,000.00 difference in the bid proposals and a 12 percent per annum discount rate related to inflation would leave approximately $52,000.00 difference in the bid proposals, in favor of the Walco bid. Petitioner has contended that Respondent failed to properly account for direct moving expenses. In that regard, the calculations made by Ooten on the question of moving expenses as reported above are accepted as fact. As a third claim, Petitioner has alleged the agency s disregard for recommendation of its evaluation committee in making the lease award. While the initial recommendations of the evaluation committee and staff were disregarded, the District Administrator eventually accepted the point of view of the Division of General Services within the Respondent's Department. Moreover, even if the local officials within the Respondent's Department had not accepted Ooten's viewpoint, the initial evaluation committee's development of criteria was flawed and the Ooten perception was correct, leading to a decision in favor of Walco. Finally, the contention by Petitioner that the agency did not seek adequate input from third parties affected by the relocation of the facility was not demonstrated through testimony. The method for review of the proposed lease was acceptable and to the extent that it required an appreciation and response to the needs of others not directly involved in the lease process, it has been amply afforded. Evaluation was in keeping with Respondent's "Facilities, Acquisition and Management Manual, HRSM 70-1, fourth chapter" and the award is based upon concurrence of the Division Director of the General Services Division of HRS pursuant to that chapter. Through argument, counsel for the Petitioner has also referred to the fact that in the initial evaluation process set forth in the sixth criterion, superior points of 2.5 for Walco as opposed to 2.25 for Bundschu had been awarded, when in fact the narrative summary of the reasons for such awards indicate an advantage to Bundschu. Even if the .25 points were allowed in the favor of Bundschu, this would not change the result.
The Issue The issue in this case is whether Respondent properly rejected the bid of Petitioner.
Findings Of Fact Respondent issued on February 28, 1990, an invitation to bid concerning the installation of bleachers at a high school ("ITB"). The ITB was duly advertised. Among the bidders was Interkal, Inc., which is a manufacturer of bleachers. The Interkal bid, which was timely submitted, was executed by its president. The Interkal bid contained a bid bond naming Interkal as principal and a certification from the secretary of Interkal reflecting a corporate resolution authorizing the execution of all bid documents on behalf of Interkal by its corporate officers. The Interkal bid disclosed two subcontractors. The supplier was shown as Interkal, and the erector was shown as Petitioner. Petitioner is the authorized factory representative for Interkal in Florida. As such, Petitioner solicits business and installs and removes bleachers on behalf of Interkal. As compensation, Petitioner receives commissions for such work from Interkal. However, the shareholder and chief executive officer of Petitioner is not a shareholder or officer of Interkal. In addition, Petitioner is not authorized to execute bid documents on behalf of Interkal. Petitioner is no more than a Subcontrator of Interkal. The bidder in this case was Interkal, not Petitioner, even though Petitioner handled much of the paperwork or its manufacturer. When an unrelated bidder was awarded the contract, Petitioner filed a formal written protest in its name. Interkal has not participated as a party in the subject proceeding.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that Respondent enter a Final Order dismissing the petition of Diversified Design Enterprises. ENTERED this 22nd day of May, 1990, in Tallahassee, Florida. ROBERT D. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of May, 1990. COPIES FURNISHED: Ned N. Julian Stenstrom, McIntosh, et al. P.O. Box 1330 Sanford, FL 32772-1330 William Merkel, President Diversified Design Enterprises 321 N.E. Second Avenue Delray Beach, FL 33444 Robert W. Hughes, Superintendent Seminole County School Board 1211 Mellonville Avenue Sanford, FL 32771
The Issue Whether the Department of Transportation's intended action to reject all quotes and re-advertise Lease No. 550:0318 was illegal, arbitrary, fraudulent, or dishonest.
Findings Of Fact In October of 1999, the Department advertised for office space for use as the Toll Data Center - Audit Section, Office of Toll Operations (Toll Office) located in Broward County. The lease was clearly advertised as a negotiated lease. It was not advertised as a competitive bid lease. Under the negotiated lease process before letting any lease, the Department must submit to the Department of Management Services (DMS) a Request for Space Need (RSN) and Letter of Agency Staffing (LAS). From DMS the Department receives the authority to directly negotiate a lease for space under 5,000 square feet with prospective lessors. 1/ Consistent with procedure, the Department received approval of the RSN on October 18, 1999. Pursuant to statute, DMS has strongly suggested that prior to selection of the apparent successful lessor, the Department should obtain a minimum of three documented quotes for a lease that has not been competitively bid. The Department has consistently followed that suggestion in negotiated leases. Under special circumstances, where it is clear it is improbable that three quotes cannot be obtained, the Department may waive its requirement that three documented quotes be received. However, the agency must certify to DMS that attempts to receive the required number of documented quotes were unsuccessful and/or special circumstances exist to negotiate the lease with less than three quotes. In this case, no special circumstances exist. In an effort to obtain more than the minimum three documented quotes, the Department opted to advertise for lease space on the Internet. The Internet is utilized by the DMS, among other state agencies, to disseminate information provided in the RSN to the private sector. Additionally, the Internet site may also be used by the private sector to provide notice of space they have available for review by the agency seeking space. A total of three submittal packages were distributed for Lease No. 550:0318. Despite the Department's advertisement over the Internet, only two requests for quote submittal packages were received. Of the three quote submittal packages distributed, the Department received only one documented quote in response to the advertisement for the Toll Office. Atlantic Investment submitted a Quote Submittal Form to the Department in late October for office space in North Fort Lauderdale. Atlantic Investment became aware of the Department's advertisement for lease space from Sheldon M. Schermer, employed by Atlantic Investment as its real estate agent. Mr. Schermer learned of the Department's need for lease space from an advertisement placed on the Internet. On November 8, 1999, the Department informed Atlantic Investment via Sheldon M. Schermer, Real Estate Agent for Atlantic Investment, of the Department's intent to reject all quotes and re-advertise for Lease No. 550:0318. This decision was not arbitrary, capricious, fraudulent, or dishonest and well within the Department's discretion and procedures for negotiated leases. The basis for the decision was the Department's modification of the lease specifications pursuant to a recommendation by DMS to modify the lease space terms to hopefully generate more interest and more quotes. In a competitive negotiation, DMS was aware of agencies who modified leases and advertised as many as five times before three documented quotes were received. Moreover, the evidence showed that the Broward County commercial real estate market could easily generate three quotes for the space required by the Toll Office.
Recommendation Based upon the findings of fact and conclusions of law, it is RECOMMENDED: That a final order be entered dismissing the Petitioner's protest. DONE AND ENTERED this 14th day of April, 2000, in Tallahassee, Leon County, Florida. DIANE CLEAVINGER 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 14th day of April, 2000.
The Issue Whether the Department of Juvenile Justice's (Respondent) decision to reject all bids is illegal, arbitrary, dishonest or fraudulent and should be rejected.
Findings Of Fact Petitioners Robert and Sara Cook own a building located at 205 Gus Hipp Boulevard, Rockledge, Florida. The address for Petitioners Robert and Sara Cook is 1950 Murrell Road, Rockledge, Florida. Petitioner Alan Taylor is an agent for Petitioners Robert and Sara Cook, and assisted the Cooks in the preparation and submittal of their Response to the Department's Request for Proposals for Lease Number: 800:0176-COCOA. Respondent, Florida Department of Juvenile Justice, is the state agency that issued the Request for Proposals for Lease Number: 800:0176-COCOA. Intervenor, 11 Riverside Corp., is the bidder to whom the Respondent issued an award letter for the Lease prior to the Respondent's decision to reject all bids. On or about January 12, 1998, the Respondent advertised Request for Proposals ("RFP") for Lease No. 800:0176-COCOA. This was the second RFP issued by the Respondent for the Cocoa Lease. The Respondent did not receive any bids in response to the first RFP. Draft versions of both RFPs were prepared by Respondent's staff. There were only very "minor changes" in the contents of the first and second RFPs, such as revisions to the issuing and advertising dates. The Respondent received proposals from three entities: Robert and Sara Cook, 11 Riverside Corp., and James E. and Jacie Stivers. All three proposals were timely submitted. Respondent's General Services Manager, Fran Lyles, reviewed the three proposals and completed a responsiveness checklist for each proposal. When Ms. Lyles provided the three responsiveness checklists to Ms. Sandy Veal, the checklists for the proposals submitted by the Cooks and 11 Riverside Corp. did not contain any notations that said proposals were non- responsive. Ms. Lyles also informed Ms. Veal that the proposals submitted by the Cooks and 11 Riverside Corp. were responsive. On or about February 19, 1998, Sandy Veal traveled to Cocoa to perform site visits for the two responsive properties. On February 23, 1998, the Respondent issued a written letter of intent to award the Cocoa Lease to 11 Riverside Corp. The letter was prepared by Ms. Veal and signed by Ms. Lyles. The Petitioners timely filed a written Notice of Protest with the Respondent on March 2, 1998, in which the Petitioners challenged the Respondent's February 23, 1988, decision to award the Cocoa Lease to 11 Riverside Corp. In subsequent correspondent and telephone calls to the Respondent, Petitioners' agent provided a detailed analysis regarding the basis for the Petitioners' Notice of Protest. The primary basis was that the other two proposals were not responsive, and that, as the remaining responsive bidder, the Respondent should award the Lease to the Petitioners. Prior to the deadline for the filing of the Petitioners' Formal Written Bid Protest of the Respondent's February 23, 1988, decision to award the Cocoa Lease to 11 Riverside Corp., the Respondent informed the Petitioners that the Respondent had decided to reject all three proposals that the Respondent had received for the Cocoa Lease. On March 12, 1998, the Respondent provided written notification to the Petitioners that the Respondent had rejected all proposals and would "re issue [sic] at a later date." This date coincided with the deadline for the Petitioners to file their Formal Petition in support of their Notice of Protest pursuant to Florida law. On March 17, 1998, the Petitioners timely filed a second written Notice of Protest with the Respondent, in which the Petitioners challenged the Respondent's March 12 decision. No entity other than the Petitioners timely filed a Notice of Intent to Protest. The Respondent's contention that General Services Manager, Fran Lyles, did not review the RFP prior to its issuance is not credible. Ms. Lyles' testimony that she informed Ms. Veal that all three proposals were not responsive prior to Ms. Veal's trip to Cocoa for a site visit is also not credible. Ms. Lyles signed the award letter to 11 Riverside Corp., even though she had allegedly informed Ms. Veal that all three proposals were non-responsive. Ms. Lyles' explanation that she was very busy and simply didn't ask how an award could be made to a bidder that she had determined was non-responsive is also not credible. Ms. Lyles altered the responsiveness determination checklists after the Petitioners filed their Notice of Protest of the Respondent's award to 11 Riverside Corp. Words were added and white-out was used to cover up Ms. Lyles' initial responsiveness determination which was made prior to the filing of the Petitioner's first Notice of Intent. It appears that such alterations were made by Ms. Lyles in an attempt to shift the responsibility for errors made in the bidding process. The sole basis for the Respondent's contention that the proposals submitted by the Petitioners is non-responsive is that the site plan allegedly failed to show parking spaces. The evidence established that the site plan adequately showed the parking spaces, and that the proposal submitted by the Petitioners was responsive. The Respondent erroneously determined that the proposal submitted by the Petitioners was non-responsive. The proposal submitted by 11 Riverside Corp. failed to include the public entity crime statement as required by the Respondent's RFP, and also failed to include proof of zoning. The floor plan included in the proposals submitted by 11 Riverside Corp. failed to include the calculations as required by the Respondent's RFP. The proposal submitted by 11 Riverside Corp. also failed to include the documentation necessary to establish bidder control of the property as required by the Respondent's RFP. Any one of the aforementioned flaws in the proposal submitted by 11 Riverside Corp. rendered the proposal non- responsive. The building included in the proposal submitted by James E. and Jacie Stivers failed to provide the square footage calculations and failed to provide a scaled floor plan with square footage calculations, as required by the Respondent's RFP. The proposal submitted by the Stivers consisted of two separate facilities. However, the proposal submitted by the Stivers only included the items required by the Respondent's RFP for one of the two separate facilities. The proposal submitted by the Stivers failed to include a letter of authority from the owners of both facilities as required by the Respondent's RFP. Any one of the aforementioned flaws in the proposal submitted by the Stivers rendered the proposal non-responsive. It is not arbitrary for Respondent to reject all bids if there is only one responsive bidder. The state has discretion to award, or not award, in the event of a single responsive bidder, so long as the basis for the rejection is not improper. Whether such rejection is in the best interests of the state may be based on several criteria to be taken into account by the Respondent. One of the criteria is the absence of competition for state business and the lack of offerings. Rejection of all bids can be premised on an omission from the RFP or change in the Respondent's needs that would affect the ability of the Respondent to perform the duties prescribed by the Respondent. The Respondent provided evidence of the importance of correct specifications in the RFP. The Respondent made a decision before January 1, 1998, to develop new specifications for use in lease RFPs. The new specifications were used in the "Bradenton" RFP (issued after the Cocoa lease). The new specifications in the Bradenton RFP include a three percent cap on increases in the lease rate. This specification was material because it is an important part of the Respondent's budget evaluation. It was the Respondent's intent to use this new specification in the Cocoa RFP. Another specification omitted from the Cocoa RFP, that was in the Bradenton RFP, was the specification requiring proposer to provide copies of licenses of contractors. The Respondent intended to use that specification in the Cocoa RFP. The absence of this specification in the part has caused delays in occupancy of the leased space by the Respondent. Another specification omitted from the Cocoa RFP, that was in the Bradenton RFP, was the specification requiring the proposer to provide a construction schedule. The Respondent intended to use that specification in the Cocoa RFP. The absence of this specification was deemed by the Respondent to impede the Respondent's ability to assess liquidated damages. The Respondent identified a lease in Sarasota that was negatively affected by the absence of this specification. Another specification omitted from the Cocoa RFP, that was in the Bradenton RFP, was the specification requiring proposer to pay all renovation costs and that there be no outstanding liens on the property. The Respondent intended to use that specification in the Cocoa RFP. The absence of this specification has resulted in liens imposed on office space the Respondent was procuring. Another specification omitted from the Cocoa RFP, that was in the Bradenton RFP, was the specification clarifying whether the proposed space had to be in a single building. The absence of this specification was a concern to the Respondent and has created problems for other state agencies. The Department did not reject all proposals with the intent of avoiding a protest. The terms of the RFP do not specify when or how the Respondent is to notify proposers of the basis for the rejection of all bids. The evidence is insufficient to show that the Respondent's rejecting all proposals was illegal, arbitrary, dishonest or fraudulent.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the formal bid protest filed by Petitioners be DISMISSED. DONE AND ENTERED this 24th day of June, 1998, at Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE 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 Filed with the Clerk of the Division of Administrative Hearings this 24th day of June, 1998. COPIES FURNISHED: David A. Theriaque, Esquire 909 East Park Avenue Tallahassee, Florida 32301 Scott C. Wright, Esquire Department of Juvenile Justice 2737 Centerview Drive Tallahassee, Florida 32399-3100 Theodore E. Mack, Esquire Powell & Mack 803 North Calhoun Street Tallahassee, Florida 32303 Calvin Ross, Secretary Department of Juvenile Justice 2737 Centerview Drive Tallahassee, Florida 32399-3100 Janet Ferris, General Counsel Department of Juvenile Justice 2737 Centerview Drive Tallahassee, Florida 32399-3100
Findings Of Fact By Notice To Contractors dated October 4, 1984, Respondent Department of Transportation (DOT) advertised for sealed bids on a number of state road projects for submission by 10:30 A.M. on October 31, 1984. Among the projects were Job No. 97930-9384 in Palm Beach County, and Jobs No. 97890-3323 and 89090- 3513 in Martin County. The Notice to Contractors provided that a proposal guaranty of not less than five percent (5 %) of the total actual bid must accompany each bid in excess of $150,000, and provided that bid bonds shall conform to DOT Form 114-G (Rev. July 1969). It further stated that all work was to be done in accordance with the plans, specifications, and special provisions of the State of Florida, Department of Transportation. (Stipulation, Ranger Exhibit 9, Dickerson Exhibit 3). Petitioner Dickerson Florida, Inc., (Dickerson) of Stuart, Florida is a contractor that frequently submits bids on DOT road projects. Ted H. Tyson is President of the firm and has participated in some 1,000 to 1,200 bids with DOT since 1960. He and his Vice-President, James R. Widmann reviewed the DOT advertisement of October 4, 1984, and determined to bid on several projects, including the Martin County Job No. 97890-3323 and 89090-3513. Accordingly, Widmann directed his Executive Secretary, Sandy MacCallum, to order the bid packages from DOT and to obtain necessary bid bonds. She proceeded to follow her instructions. The bid bonds were ordered from Surety Associates, Inc., in Jacksonville, Florida, a firm that had done business with Dickerson for some 15 years. Surety Associates mailed two (2) bid bonds, including one (1) for the project in question, to Dickerson on October 16, 1984 and they were received by Dickerson on October 18, 1984. The project documents were received from DOT about October 10 and the Dickerson bid was prepared in Stuart, including the signature of Tyson on the bid bond. Tyson and Widmann took the Dickerson bid proposals to Tallahassee on October 30, 1984. They did further work on the bid materials for three (3) projects at their hotel that evening. The next morning, after ascertaining low bids of sub-contractors, they completed work on the bid packages and checked to insure that they were complete, including the fact that the bid bonds were in the envelopes with the three (3) bids. They were then sealed by Widmann and delivered by him at approximately 9:30 A.M. on October 31, to the DOT central administration office. The bid bends had been placed in the bid materials, but not stapled to the other documents. (Stipulation, Testimony of Lynch, MacCallum, Widmann, Tyson, Dickerson Exhibits 1-2). Ranger Construction Industries, Inc., (Ranger) of West Palm Beach, Florida is a contractor that has submitted bids to DOT in the past, and the firm decided to bid on four (4) projects for the October 31, 1984 bid opening. Bid bends for the proposed projects were ordered by Ranger from the George H. Friedlander Company of Charleston, West Virginia on October 18, 1984. They were issued and mailed to Ranger by that firm on the same date, including one (1) for the project in question, Job No. 97930-9384 in Palm Beach County. On October 30, 1984, the Ranger "Bid Team" consisting of representatives of the firm arrived in Tallahassee where they occupied adjoining rooms at a local hotel. They were joined that evening by George Friedlander whose firm had issued the bid bonds for the four (4) projects on which Ranger intended to bid. They worked during the evening on the bid packages and continued the following morning at which time several independent checks for completeness were made by Friedlander, Leo Vecellio, Jr., President of Ranger, and James M. Slade, Executive Vice-President. They made sure that the bid bonds were placed in the already stapled bid documents in each envelope which were thereafter sealed. It was noted during this process that one (1) bid bond was missing, but it was immediately found in the room and also inserted into the appropriate envelope and sealed. Thereafter, Friedlander and Gene Pearson, a Ranger representative, took the bid envelopes to the basement of the hotel and placed them in a bid box maintained by the Florida Transportation Builders Association as a service to association members. The bid box was in a foyer and a representative of the association was present at all times. Immediately prior to placing the envelopes in the bid box, the envelopes were sealed by scotch tape by Pearson. At about 9:45 A.M., they were taken by an employee of the association to the appropriate location for submission of bids at the DOT building. (Stipulation, Testimony of Slade, Vecellio, Stanchina, Friedlander, Brewton, Ranger Composite Exhibit 1, 5-9). On October 31, 1984, DOT personnel followed their customary procedures in processing bids submitted on 53 projects. Lee Schroeder was in charge of the bid opening in place of his supervisor, John Ted Barefield, Chief Bureau Contracts Administration, who was absent that day. Schroeder was assisted by Ray Haverty and about eight (8) other DOT employees. At 10:30 A.M., the various bids were opened by the DOT employees, removed from their envelopes, and stacked on tables by project number. There is no evidence that any of the bids were unsealed prior to opening at the appointed time. Haverty and Schroeder checked the bids for addenda. No check was made at this time for the presence or absence of bid bonds. The bids were then stacked by job number and moved to a higher level in the DOT auditorium where Haverty read the pertinent information from the bids regarding the job, name of bidder, and amount of the bid. Dickerson was the apparent low bidder on Job No. 97890-3323 and 89090-3513 with a bid of $1,010,459.35, and Ranger was the apparent low bidder on Job No. 97930- 9384 with a bid of $1,210,323.66. Dickerson's bid was $75,246.49 lower than the next low bidder, and Ranger's bid was $83,365.93 lower than the next low bidder. After reading the pertinent bid information, a rubber band was placed around the bids for each project and placed in a plastic container. After completing the bid opening procedure, the four (4) or five (5) plastic containers holding all the bids were covered and placed on a cart where they were taken to the contract administration office. The bid envelopes had also been placed in a cardboard box when the bids were opened and they were taken to the same office on the cart. The envelopes were checked for any contents, but nothing was found. (Testimony of Barefield, Schroeder, Haverty, Stipulation, DOT Exhibit 2). During the afternoon of the bid letting, several employees of DOT's minority programs office reviewed all of the bids to determine the presence or absence of required documents concerning the disadvantaged business enterprises and good faith effort submittals in this regard. During the course of this review, pertinent documents were photocopied and, in some instances, it was necessary to unstaple the bid packages to perform this function. A trash can was available in the immediate area for the disposal of any peer copies. The trash cans are emptied each evening by custodial personnel. The minority programs employees finished their review the next morning, November 1, 1984. At this point, Ray Haverty customarily stapled any loose bid bends to the back of the front cover of the bid package so that there would be no loose documents when the bids were given to other employees who served as "checkers" of the bid documents. (Testimony of Haverty). The DOT "checkers" are provided with the bids for one (1) or more projects and they proceed to check the bid documents for appropriate signatures, bends, seals, and the like. The standard procedure is for a checker to write the initials "BB" on the top left side of the front sheet of the bid documents if the bid bend has been included. If not included, the checkers are suppose to clip a note reflecting that fact to the front of the bid package. During the course of checking the bids in question, it was discovered that there were no bid bonds in the Dickerson and Ranger bid packages for the jobs in question. Although different checkers had placed a "BB" on the top front page of each bid package, the specific checkers in question were under the misapprehension that that symbol should be placed there simply because the documents had been checked for bid bonds. The correct procedure is set forth in a checklist that bid checkers are supposed to follow, although the date of inception of its use is unclear. As soon as it was reported to Ray Haverty that the Dickerson and Ranger bonds were missing, he instituted a thorough search of the office, including the minority business programs office, but was unsuccessful in finding the two (2) missing bid bonds. Although it was not precisely established when Haverty was informed of the missing bonds, it was probably on either November 2, or Monday, November 5, 1984. (Testimony of Haverty, Maloy, Daniels, Pilcher, Stipulation, Dickerson Exhibit 2). On November 5, 1984, Dickerson was advised by telephone call to its Stuart, Florida office from DOT's employee, Lee Schroeder, of the Contracts Administration Division, that the bid bond on the Martin County project could not be located. DOT was told by Dickerson that the bid bond had been included in the sealed envelope with its bid and that a copy of the original bid bond and a replacement bid bond would be promptly secured and submitted to DOT. On November 8, 1984, or shortly thereafter, Dickerson submitted a copy of the original bid bond, a replacement bid bond, and affidavits of Tyson, Widmann, and MacCallum concerning submission of the original bid bond. On November 15, 1984, the DOT Contract Award Technical Review Committee met and determined that Dickerson's low bid be rejected as non-responsive for failure to include a bid bond with its bid, and that the contract be awarded to the next low bidder, Hardrives Company of Ft. Lauderdale, Florida. The notice of DOT's intent to award State Job No. 97890-3323 to Hardrives Company was confirmed in a Mailgram dated November 16, 1984, and the formal notice of intent to award to that firm was issued eon December 10, 1984. Dickerson thereafter protested the rejection of its bid. (Testimony of Widmann, Tyson, Parefield, Lynch, Stipulation, DOT Exhibits 3, 6). Similarly, Ranger was advised by telephone call from Schroeder on November 5, 1984 that its bid bend for Palm Beach County-State Project Job No. 97930-9384 could not be located by DOT. By letter of November 6, 1984, Ranger informed DOT that the requisite bid bend had been present in the sealed bid envelope when submitted to the agency on October 31, 1984, and enclosed a duplicate original of the bend. At the November 15, 1984 meeting of the Contract Award Technical Review Committee, Ranger's low bid on the project was rejected as non-responsive due to the failure to submit a bid bend, and the committee voted to award the contract to Hardrives of Delray. By Mailgram, dated November 16, 1984, DOT advised Ranger that its low bid had been declared "irregular" due to its failure to submit a bid bend and stating that Hardrives of Delray, Inc., was new the apparent low bidder on the project. Ranger thereafter protested the decision by letter of December 10, 1984, and on December 18, filed its formal protest of the proposed award. (Testimony of Slade, Friedlander, Stipulation, DOT Exhibits 3, 6; Ranger Exhibits 2-4). The DOT 1982 standard specifications for road and bridge construction which are incorporated as a part of the bid proposal, provide pertinently as fellows: SECTION 1: Definition and Terms. 1-29 Proposal Guaranty. The security designated to be furnished by the bidder as guaranty that he will enter into the contract for the work if his proposal is accepted. SECTION 2: Proposal Requirements and Conditions. Rejection of Irregular Proposals. A proposal will be subject to being considered irregular and may be rejected if it shows omissions, . . . or irregularities of any kind. . . . Guaranty to Accompany proposals. No proposal will be given consideration unless it is accompanied by a proposal guaranty of the character and amount indicated in the Notice to Contractors, and made payable to the Governor of the State of Florida. Proposals shall be submitted with the under- standing that the successful bidder shall furnish a contract bond pursuant to the re- quirements of 3-5. SECTION 3: Award and Execution of Contract. 3-2 Award of Contract. 3-2.1 General: The award of the contract, it if be awarded, will be to the lowest responsible bidder whose proposal complies with all the requirements necessary to render it formal. (Testimony of Barefield, DOT Exhibit 5). It was stipulated by the parties that Ranger and Dickerson meet all requirements for the award of the contracts in question if it is determined that they submitted the required bid bonds to DOT in their bid packages on October 31, 1984. Based on the foregoing facts, it is further specifically found that both Ranger and Dickerson submitted the requisite bid bonds on the projects in question in their bid packages on October 31, 1984, and that the cause of the apparent loss of the bonds thereafter cannot be determined by the evidence presented at the hearing.
Findings Of Fact On or about December 29, 1981, the College solicited sealed bids for construction of alterations and additions to the Technical and Gymnasium Buildings located on its campus in Madison, Florida. In response, seven general contractors submitted bids. (P-1, P-2, P-3.) Bids were publicly opened on February 9, 1982. Griffin Construction, with a bid of $536,575, was the apparent low bidder; the second lowest bidder was Long Contractors, with a bid of $539,512. (Testimony of Griffin, Sims, Rutherford; P-3, P-4, P-5.) After the low bid was identified, Tom McClanahan, representing Long Contractors, asked that the subcontractor list accompanying the low bid be opened. Griffin Construction's subcontractor list was then opened. McClanahan asked if the license and charter numbers of the subcontractors were listed. 2/ Upon learning that these numbers were not included on Griffin Construction's subcontractor list, McClanahan protested. (Testimony of Sims, Rutherford, Griffin.) At its February 15, 1982, meeting, the College District Board of Trustees ("Board") rejected the low bid of Griffin Construction on the sole ground that the omission of subcontractor license and charter numbers constituted a failure to comply with the conditions of the bid documents. 3/ The Board then voted to award the contract to Long Contractors, the second lowest bidder, on the ground that it was the lowest bid conforming to the bid documents. In so doing, the Board followed the College president's recommendation--a recommendation based on his belief that the non-complying bid must be rejected, that it did not involve a matter of Board discretion. (Testimony of Sims, Rutherford, Griffin; Stipulation of Parties; P-41.) The bid specifications contain instructions to bidders requiring "each Bidder . . . [to] submit with his proposal a list of the subcontractors who will perform the work . . . as indicated by the `List of Subcontractors' form." (P-1, P-2.) The instructions further provide: The applicable subcontractor license registration or certification number must be noted on the bid opposite his name, and in the event that the subcontractor is a corporation, his State Corporate Charter number shall also be noted. If the subcontractor is an out of state firm, their Charter number with the Secretary of State to do business in the State of Florida should also be noted. The "Listing of Subcontractors" form provided with the specifications contains column headings for the names and addresses of the subcontractors but does not contain a separate heading for the requested license or corporate charter numbers. 4/ The form states that the subcontractor list "is an integral part of the bid." (P-1, P-2.) The bid instructions further require bidders to evaluate and determine the qualifications of their listed subcontractors. The bidder shall have determined to his own complete satisfaction that a listed subcontractor has been successfully engaged in this particular type of business for a reasonable length of time, has successfully completed installations comparable to that which is required by this agreement and is qualified both technically and financially to perform that pertinent phase of the work for which he is listed. (P-1, P-2.) The bid documents expressly reserve to the College the right "to reject any or all bids, and to waive informalities." (P-1 P-2.) No bidder correctly listed the required license and corporate charter numbers on its "Listing of Subcontractors" form. Griffin Construction. Griffin failed to include any license or corporate charter numbers. However, by subsequent letters dated February 9 and February 18, 1982, and at hearing, it supplied the required subcontractor license and charter numbers. Long Contractors. Long listed for its roofing subcontractor a sheet metal registration number, not the required roofing license number. [A sheet metal registration does not qualify a contractor for roofing work. See, 489.105, 489.113, Fla. Stat. (1981).] For its electrical subcontractor, Long omitted the prefix, "ER" from the listed number. For its plumbing subcontractor, Long listed a mechanical registration number instead of the required plumbing certification or registration number. [A mechanical registration does not qualify a contractor to perform plumbing work. See, 489.105, 489.113, supra.] Of the four areas requiring state licenses--roofing, heating and air conditioning, electrical, and plumbing--Long listed correctly only the registration number for its heating and air conditioning subcontractor. Long incorrectly listed No. FO6962 as the corporate number of Gandy Enterprises, its painting subcontractor. This is the number of a related corporation, Industrial Coatings, Inc. Remaining Bidders. Of the five other general contractors submitting bids, two-- Richard Walker Construction Company and GRC Contracting, Inc.--omitted all subcontractor license and charter numbers. The other three bidders failed to completely list all the required numbers. (Testimony of Rutherford; P-11, P-12, P-13, P-14, P-15, P-16, P-17, P-34, P-37, R-1, R-5.) The project architect testified that the submittal of incorrect or incomplete subcontractor license and charter numbers was a deficiency which a bidder should be allowed to cure after bid opening. But the failure to submit any required "number" was a deficiency which, in his opinion, could not be similarly corrected. He failed, however, to supply a reasonable basis for drawing such a distinction. Therefore, his opinion on this question is given little weight. 5/ (Testimony of Rutherford.) Subcontractor license and charter numbers are readily obtainable and can be verified by contacting the pertinent state agency--the Florida Department of Professional Regulation, Construction Industry Licensing Board, or the Florida Department of State. (Testimony of Griffin, Rutherford; P-32, P-33, P- 34, P-35, P-36, P-37.) The project architect, William Rutherford, routinely requires the listing of subcontractor license and charter numbers on bids for public construction projects. The main purpose it serves is that it would enable him to identify the listed contractor, since sometimes subcontractors have similar business names. Although if he was uncertain about the qualifications of a subcontractor, he would ordinarily question the general contractor. (Testimony of Rutherford.) Although Mr. Rutherford has customarily required the listing of subcontractor "numbers" on public projects, he has never made any use of those numbers in the past. (Testimony of Rutherford.) The general contractor who is awarded the contract is responsible to Mr. Rutherford and the College for construction of the project in accordance with the bid specifications. If, after bid opening, a listed subcontractor is unable to perform, Mr. Rutherford would ordinarily arrange for substitution of a new subcontractor acceptable to the general contractor and owner. (Testimony of Rutherford.) Griffin Construction's failure to list the license and charter numbers of its listed subcontractors, and its subsequent curing of that failure, did not affect the amount of its bid 6/ by giving it an advantage or benefit not enjoyed by other bidders. The bid omission did not allow Griffin Construction the opportunity to change any material element of its bid after bid opening. The inclusion or exclusion of subcontractor "numbers" at bid opening does not affect the ability of a contractors to obtain the required bond, the quality of bidding general contractors, the quality of listed subcontractors, the quality of work performed, or any material feature of the competitive bidding process. (Testimony of Griffin, Rutherford.)
Recommendation Based on the foregoing, it is RECOMMENDED: That the construction contract in question be awarded to Vick Griffin Construction Company, the lowest responsible bidder. DONE AND RECOMMENDED this 29th day of April, 1982, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of April, 1982.
The Issue The central issue in this case is whether the bid for the Department of Health and Rehabilitative Services Lease No. 590:1871 to provide office space in Dade County, Florida, should be awarded to either Petitioner or Intervenor.
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, I make the following findings of fact: The Petitioner, Robert Litowitz (hereinafter "Litowitz"), in response to an invitation to bid advertised by the Department of Health and Rehabilitative Services (hereinafter "HRS"), timely filed a bid submittal form offering to lease real property located at 11401 SW 40th Street (also known as Bird Road), Miami, Florida. This lease was to be for a five-year term with two one-year renewal options. The net square footage for the lease required by HRS was 14,781 + 3 percent with the geographical boundary designated by the invitation to bid being described as follows: All bid should be for existing office space located within the following boundaries: On the North, S.W., 48th Street. On the South, S. W., 88th Street. On the East, Palmetto Expressway, and on the West, S.W., 117th Street. This description contained an error in that the western boundary line should have been 117th Avenue not 117th Street. This minor discrepancy was noted at both of two pre-bid conferences conducted by HRS. The Intervenor, James C. Colross (hereinafter "Colross"), also timely filed a bid submittal form offering to lease real property described as Building "B," 9495 Sunset Drive (Southwest 72nd Street), Miami, Florida. Prior to the bid opening date, February 17, 1987, employees of HRS conducted two pre-bid conferences. At these conferences the bid package was reviewed and explained to all potential bidders present. Litowitz attended the pre-bid conference held the last week in January 1987. At this pre-bid conference Litowitz received the bid package and advised employees of HRS that he would be submitting property located on Bird Road for consideration for lease No. 590:1871. Linda Treml was the HRS employee who served as the contact person for the bid for Lease No. 590:1871. Ms. Treml conducted the pre-bid conferences and answered questions from potential bidders regarding the bid submittal forms. Several months earlier, perhaps during the summer 1986, Litowitz had met with Linda Treml regarding the possible lease of the Bird Road site, Ms. Treml had advised Litowitz that, at that time, HRS was not looking for space but that Litowitz would be added to their mailing list for future bid opportunities. Ms. Treml toured the Bird Road property with Litowitz as a courtesy visit for his inquiry. The bid submittal form for Lease No. 590:1871 required the proposed space be in an existing building. "Existing" was defined to specify the entire space to be dry and capable of being physically measured to determine net rentable square footage. Both the Colross and the Litowitz properties met this definition for an existing building at the time of the bid submittals. The bid submittal form for Lease No. 590:1871 required a minimum of 90 parking spaces to include a minimum of 80 full size spaces and 4 spaces meeting the Standards For Special Facilities For Physically Disabled found in Chapter 130-1, Florida Administrative Code. The required parking spaces did not have to be reserved for the exclusive use of HRS. Colross offered 62 exclusive spaces on site with 50 additional exclusive parking spaces located one block from the proposed facility. The Colross site plan for Building B (the bid property) established over 90 non-exclusive parking spaces available on site. The Litowitz property also had 90-plus non-exclusive parking spaces on site. HRS requested a clarification for the 50 exclusive spaces offered off-site by Colross. The verbal clarification was reduced to writing to confirm such spaces, if needed, would be at no cost to HRS. This written confirmation was not issued until March 31, 1987. HRS established a bid evaluation team to review the bids submitted for Lease No. 590:1871. This team, comprised of Janet Robinson, Dorea Sowinski, and Grace 0abolish, visited both the Litowitz and Colross properties. Subsequent to the site tours, they met in a conference room at Janet Robinson's office to discuss the bid evaluation process. This team was to make a recommendation as to which bid was the lowest and best. The recommendation was to be made based upon the evaluation criteria set forth in the bid submittal form. No other criteria were to be employed by the evaluation team. HRS has no guidelines which specified how each team member is to apply the evaluation criteria. The team recommendation would then be reviewed by George Smith and his superiors. Linda Treml advised the evaluation team not to consider the Litowitz property because it was outside the geographical boundary established by the invitation to-bid. The Litowitz property located on Bird Road is, in fact, outside of the advertised boundaries. The bid advertisement required the property to be considered for Lease No. 590:1871 to be within the stated geographical area. HRS did not, by act or omission, encourage Litowitz to prepare and submit a bid for a property known to be outside the defined boundary. HRS did not advise Litowitz that a property outside of the defined boundary would be disqualified. The bid evaluation criteria assigned a weighing value of 10 percent to the proximity of the offered space in the central or preferred area of the map boundaries. Litowitz mistakenly concluded that even though his property was not within the boundaries that he would lose only the 10 percent weighing factor when his property would be evaluated. HRS did not, by act or omission, affirm this erroneous interpretation. Because the Litowitz property was not within the defined geographical boundary, HRS disqualified the Litowitz bid. Accordingly, the Colross bid was the only bid left for consideration and was selected for Lease No. 590:1871. The interested parties were notified of this selection on or about March 19, 1987. The Colross bid included a higher rental fee than the Litowitz bid. HRS rejected a third bid for Lease No. 590:1871 submitted by Brookhill Capital Resources (hereinafter "Brookhill") since it was missing certain documents which had to be submitted by the time of the bid opening. The Brookhill bid included a lower rental fee than the Litowitz bid. The Brookhill property was within the advertised boundary. HRS selected the Colross property and deemed it the lowest and best bid since the Litowitz and Brookhill properties had to be disqualified. Members of the bid evaluation team preferred the Colross property for Lease No. 590:1871. HRS did not waive the boundary requirement for Lease No. 590:1871. Employees of HRS completed a bid synopsis which listed data on all three bidders for lease no. 590:1871 even though two of the bidders, Litowitz and Brookhill, had been disqualified, HRS reserved the right to reject any and all bids when such rejection would be in the interest of the State of Florida. Janet Robinson as the managing administrator of the disability determination office set the geographical boundaries for the invitation to bid. The boundaries were established in consideration of the needs and desires of the employees of the disability determination office.
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made. On October 11, 1991, DOT's District Four office let out for bid district contracts E4551 and E4554. Contract E4551 calls for the mechanical sweeping of Interstate 95 in Broward County. Contract E4554 calls for the mechanical sweeping of Interstate 95 in Palm Beach County. At a mandatory pre-bid conference, the bidders for the Contracts were provided with a packet which included a Notice to Contractors and Standard Specifications. The Notice to Contractors is a four page document which is specific to each contract. The Standard Specifications are the same for all district contracts. Both the Notice to Contractors and the Standard Specifications to the bidders required bidders to submit proof of the ability to acquire a performance and payment bond in an amount equal to the contract bid price. Bidders could satisfy this requirement by submitting a bid guarantee of 5% of the bid, submitting a notarized letter of intent from a bonding company or by providing a Certificate of Qualification issued by Respondent. The Notice to Contractors for both Contracts provided as follows: Failure to provide the following with each bid proposal will result in rejection of the contractor's bid.... District contracts of $150,000 or less require the following as proof of ability to acquire a performance and payment bond: A notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a performance and payment bond in the amount of your bid, should your firm be awarded the project; in lieu of a notarized letter the following may be substituted: (1) a bid guarantee of five percent (5%); or (2) a copy of the Contractor's Certificate of Qualification issued by the Department. (No emphasis added) Similarly, the first Standard Specification provides: 1.1 Bidders (contractors) A contractor shall be eligible to bid on this contract if:... (2) Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the District Contract Administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of your bid, should your firm be awarded the project.... The requirement to submit proof of the ability to acquire a performance and payment bond has been imposed on the Districts by DOT Directive 375-00-001-a (hereinafter the "Directive".) This Directive was in place at all times material to this proceeding. Section 3.2.2 of the Directive provides: A contractor shall be eligible to bid if: ...Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the minicontract administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of the bid, should the firm be awarded the project. A bid guaranty as specified above may substitute as proof of ability to obtain a performance and payment bond. This applies to bids amount over or under $150,000. A copy of the Contractor's Certificate of Qualification issued by the Department may be substituted in lieu of a notarized letter for those contracts not requiring a bid bond. The bids for the Contracts were opened on October 11, 1991 in Fort Lauderdale, Florida. Bids were received from four bidders: CPM, SCA, Florida Sweeping, Inc. and P. F. Gomez Construction Co., Inc. In its bid proposals, SCA included executed bid bonds in an amount sufficient to cover the amount of each bid proposal. Each bid bond cost $55.00. CPM did not submit executed bid bonds with its proposals. Instead, CPM submitted letters from Mark A. Latini dated September 25, 1991. Those letters were provided on the stationery of Bonina-McCutchen-Bradshaw, Insurance and indicate that Mr. Latini is the "bond manager." The letters provide as follows: Amwest Surety Insurance Company is the surety for the above-referenced contractor and stands ready to provide the necessary performance and payment bond for the referenced bid should Certified Property Maintenance, Inc., be low and awarded the referenced contract. All bonds are subject to normal underwriting requirements at the time of the bond request.... The letters submitted by CPM with its bid proposals were not notarized and were not binding obligations to issue bonds since they were conditioned upon meeting certain unspecified underwriting requirements at the time of the bond requests. The submitted bids were reviewed by the District Four Contractual Services Office. The bids submitted by CPM were the lowest for each contract. Its bid for Contract No. E4551 was $109,343.97. Its bid for Contract No. E4554 was $30,312.63. SCA's bids for the Contracts were $139,442.14 and $44,100.00, respectively. During the initial review of the bid proposals, the Contractual Services Office rejected CPM's bids for failure to have its bonding company "letters of intent" notarized. In addition, the bid proposals submitted by Florida Sweeping, Inc. were rejected for failure to note a required addendum and the bids submitted by P. F. Gomez Construction Co., Inc. were rejected because the "proposal bond was not of proper character". On October 18, 1991, DOT posted its Notice of Intent to Award the Contracts to SCA, the only bidder for the Contracts whose proposals had not been rejected. CPM timely filed protests of the proposed awards to SCA on October 22, 1991. The protests filed by CPM argued that its bids should not have been invalidated simply because the bonding company's letters did not include notary seals. At this point, the sole basis for the disqualification of CPM's bids was the failure to have the bonding company letters notarized. Respondent contends that, except for the absence of the notary seal, the letters submitted by CPM met the requirements of the Notice to Contractor and the Standard Specifications cited above. However, those letters are equivocal and do not evidence a binding commitment to issue a bond upon award of the contract. The DOT officials admit that they do not know what "normal underwriting requirements" would or could be required by CPM's bonding company. This conditional language makes it uncertain whether CPM could obtain the necessary bond. Therefore, it is concluded that those letters do not meet the requirements of the Notice to Contractors, the Standard Specifications or the Directive. A hearing on CPM's protest was not held. CPM's president, Raymond Hanousek, who prepared CPM's bid and attended the pre-bid meeting, called DOT's District office the day the bids were opened and was informed that his company's bid was low, but was rejected because its bond commitment letter was not notarized. Mr. Hanousek spoke with Joseph Yesbeck, the District's Director of Planning and Programs. After their conversation, Mr. Yesbeck reviewed the file and met with Teresa Martin, the District's contract administrator for construction and maintenance contracts, and other members of the contracting staff. Ms. Martin explained why CPM's bid had been disqualified, and the matter was thereafter discussed with the District and Department attorneys. After reviewing the situation, Mr. Yesbeck determined that the failure to submit notarized letters should be considered a non-material deviation and the bids submitted by CPM should be accepted and considered the low responsive bids. Mr. Yesbeck concluded that the absence of the notary seal did not give any competitive advantage to CPM and that defects of this nature are routinely allowed to be cured. Therefore, he reversed the contract administrator's decision to disqualify CPM on both Contracts. The District secretary concurred in the decision reached by Mr. Yesbeck to repost the award of the Contracts. Mr. Yesbeck prepared a joint letter of reposting which removed CPM's disqualification and declared CPM to be the low bidder for both Contracts. At the time Mr. Yesbeck made his decision, he had not reviewed the Directive from the Assistant Secretary's office stating that there must be a notarized letter showing proof of ability to obtain a performance and payment bond. Mr. Yesbeck did not review the Directive until his deposition was taken one week prior to the hearing in this case. According to Ms. Martin, the option to provide a notarized letter from a bonding company as an alternative to the posting of a 5% bid guarantee or obtaining prequalification was designed to promote participation in state contracting by small business and minority business enterprise applicants. While DOT was apparently trying to make it easier and cheaper for companies to bid by not requiring a bond to be posted, the DOT Directive and the bid documents still clearly required unconditional proof that a bid bond would be issued if the contract was awarded to the bidder. CPM was not prequalified nor did it post a bond. Thus, in order to meet the requirements of the Notice to Contractors and the Standard Specifications, CPM's only option was to submit a notarized letter showing proof of ability to obtain a performance and payment bond. DOT was never provided with any proof that CPM had been prequalified by the bonding company for a bond and/or that a bond would unconditionally be issued if CPM was awarded the Contracts. Because the letters stated they were "subject to normal underwriting requirements at the time of the bond request", there was some possibility CPM would not be able to obtain a bond. Such a condition was not permissible under the bid doucments. The decision to accept CPM's bid was contrary to the DOT Directive, the Notice to Contractors and the bid specifications which require that a bidder demonstrate proof of ability to obtain a performance and payment bond. Consequently, it is concluded that DOT's decision to accept the conditional, unnotarized letters submitted by CPM was arbitrary and capricious. There is some indication that other DOT Districts have, on occasion, waived the notarization requirement for the bond letter. However, it is not clear whether the language in the bid documents was the same or similar in those cases and/or whether the bond letters were conditional. In the past, whenever District Four has gotten a bid without a notarized bond letter, the bid was rejected. Apparently, there has never been a protest based on such a denial in District Four. Under Section 337.18, DOT does not need to require notarized, unconditional bond letters on contracts under $150,000. Indeed, there was a suggestion that some DOT Districts have dropped the requirement for certain contracts under $150,000. However, the bid documents in this case clearly required some proof that the bidder could acquire a performance and payment bond upon award of the Contracts. It was incumbent for all bidders to meet this requirement. It was arbitrary to delete this requirement after the bids were submitted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding the bids submitted by CPM to be non-responsive and rejecting those bids. Petitioner should enter into negotiations with SCA regarding the award of the contract. In the absence of a favorable negotiation, Petitioner should enter a Final Order rejecting all bids and opening the Contracts up for new bids. DONE and ENTERED this 24th day of March, 1992, at Tallahassee, Florida. J. STEPHEN MENTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of March, 1992.
Findings Of Fact The Petitioner, PFO, is a professional corporation organized and existing under the laws of the State of Florida. Petitioner's principal office is located in West Palm Beach, Florida. At all times material to the claims of this case, Petitioner had fewer than 25 full-time employees. At all times material to the claims of this case, Petitioner had a net worth of less than $2 million. On May 22, 1995, the Department provided Petitioner with a clear point of entry to a formal administrative hearing pursuant to Section 120.53(5), Florida Statutes. At that time the Department issued an intent to award the Palm Beach County (Intrastate) CSE contract to a third party. This dispute evolved into DOAH case no. 95-3138BID or "the bid case." The Department was not a "nominal party" in the bid case. A recommended order was entered in the bid case on September 5, 1995. Except for a minor point not relevant to the issues of this matter, the Department adopted the findings and conclusions of the recommended order and entered its final order on December 1, 1995. The final order in DOAH case no. 95-3138BID awarded the Palm Beach County (Intrastate) contract for CSE legal services to Petitioner. Such award was based upon the conclusions that the third party's proposal was nonresponsive and that aspects of the evaluation process were arbitrary. No appeal was timely filed against the final order. Petitioner is, therefore, a prevailing small business party within the meaning of Section 57.111, Florida Statutes. The Petitioner timely filed its request for attorneys' fees and costs in the instant case pursuant to Section 57.111, Florida Statutes. The total amount of attorneys' fees and costs incurred by Petitioner in the bid case was $63,495.25. Of that amount, at least $15,000 was reasonable and necessary for Petitioner to incur in the preparations for, and attendance at, the hearing in the bid case. The solicitation package for the bid case contained mandatory requirements with which all applicants were to comply. The final order in the bid case concluded that the successful applicant had failed to satisfy all mandatory requirements. Its bid was, therefore, nonresponsive to the solicitation. Additionally, the final order determined that the instructions regarding how the proposals were to be evaluated were unclear and that points were inappropriately assigned to the successful applicant. The overall conclusion of the final order found that the Department had acted arbitrarily in the intended award to this third party applicant. All of the material deficiencies relied on in the recommended order and the final order to reach the conclusion that the Department had acted arbitrarily were known to the Department at the time of its initial review and evaluation of the proposals. For example, the Department knew that the applicant had not identified two attorneys who would be expected to perform services under the contract, and had not included certificates of good standing from the Florida Bar for them. Additionally, the applicant had not provided references from three persons as specified in the solicitation package. This was evident upon the opening of the proposal. Nevertheless, the Department scored the nonresponsive proposal and awarded it sufficient points to be the apparent winner among the applicants. An award of attorneys fees' and costs under Section 57.111, Florida Statutes, is capped at $15,000. The agency has not disputed the reasonableness nor the amount of fees claimed in connection with the bid case. The agency has not offered evidence to specify each item of cost or fee in dispute. Discovery requested by the Department sought information for the period September 1995 through January 1996 which included runner logs of Petitioner's counsel, itemized bills regarding another party (not a party to the bid case nor this case), and the deposition of Don Pickett. None of the requested discovery addressed the issue of whether the Department's actions in the bid case were substantially justified. None of the requested discovery addressed facts which the Department had placed in issue by its response to the petition. None of the discovery addressed the issue of whether there are special circumstances which would make an award of reasonable fees and costs unjust. Moreover, the parties have stipulated that there are no special circumstances which would make an award of reasonable fees and costs unjust. No new information pertinent to the claim for fees and costs herein which was unknown to the Department as a result of the bid case proceeding was discovered from the deposition of Don Pickett. No new information pertinent to the reasonableness or amount of the fees claimed was discovered from the deposition of Don Pickett or the other discovery requested. The factual circumstances argued in Respondent's Proposed (sic) Recommended Order, ie. that the agency had relied on findings and conclusions from an unrelated DOAH case in connection with the review of the underlying bid case, were not set forth in the response filed by the agency in the instant case and have not been deemed credible in determining the issues of this case. The proposal submitted by the third party in the bid case was nonresponsive. The Department has stipulated that the award of a contract to a nonresponsive bidder is arbitrary.
