The Issue The issue for determination is whether Respondent acted fraudulently, arbitrarily, illegally, or dishonestly in selecting Intervenor as the lowest bidder for a contract to supply the state with lamps valued at $3,692,499.
Findings Of Fact The Parties Respondent is the state agency responsible for soliciting bids to establish a contract for the purchase of large lamps by state agencies and other eligible users. Petitioner is a Florida corporation and the incumbent vendor under similar contracts for the preceding 10 years. Petitioner does not manufacture lamps. Petitioner sells lamps manufactured by Osram-Sylvania ("Sylvania"). Intervenor is an Ohio corporation doing business in Florida. Intervenor manufactures the lamps it sells. The ITB On March 15, 1996, Respondent issued Invitation To Bid Number 39-285- 400-H, Lamps, Large, Photo and STTV (the "ITB"). The purpose of the ITB is to establish a 24 month contract for the purchase of Large Lamps (fluorescent, incandescent, etc.), Photo Lamps (audio visual, projection, flash), and Studio, Theatre, Television, and Video Lamps ("STTV") by state agencies and other eligible users. The contract runs from July 10, 1996, through July 9, 1998. The ITB estimates the contract price at $3,692,499. The ITB contains General and Special Conditions. General Conditions are set forth in 30 numbered paragraphs and elsewhere in DMS Form PUR 7027. Special Conditions are set forth in various unnumbered paragraphs in the ITB. General Conditions Paragraphs 5, 11, and 24 of the General Conditions are at issue in this proceeding. The terms of each paragraph are: 5. ADDITIONAL TERMS AND CONDITIONS: No additional terms and conditions included with the bid response shall be evaluated or considered and any and all such additional terms and conditions shall have no force and effect and are inapplicable to this bid. If submitted either purposely through intent or design or inadvertently appearing separately in transmittal letters, specifications, literature, price lists, or warranties, it is understood and agreed the general and special conditions in this bid solicitation are the only conditions applicable to this bid and the bidder's authorized signature affixed to the bidder's acknowledgment form attests to this. 11. QUALITY ASSURANCE: The contractor, during the contract term, upon mutual agree- ment with the Division of Purchasing, will provide reasonable travel and lodging accommodations for one (1) to three (3) government employees to perform an on-site inspection of the manufacturing process(es) and review of the manufacturer's product quality control(s) and total quality manage- ment program(s). The contractor will reim- burse the State for actual transportation cost, per diem and incidental expenses as provided in Section 112.061, F.S. It is the State's desire that the contractor provide demonstration of quality control for improvement rather than post production detection. 24. FACILITIES: The State reserves the right to inspect the bidder's facilities at any reasonable time with prior notice. Included Items Special Conditions in the ITB require bidders to submit prices for "Item 1" and "Item 2" lamps ("included items"). 1/ Item 1 lamps consist of Group 1 and 2 lamps. Group 1 lamps are Large Lamps such as fluorescent, incandescent, quartz, mercury vapor, metal halide, and high-pressure sodium lamps. Group 2 lamps are Photo Lamps such as audio visual, projection, flash, and STTV lamps. The total price for each group is multiplied by a weighted usage factor. The product calculated for Group 1 is added to the product calculated for Group 2 to determine the total price for Item 1 lamps. Item 2 consists of a category of lamps described as "T- 10 Lamps." The total price for Item 2 lamps is determined without application of the weighted usage factor used for Item 1 lamps. The total price for Item 2 lamps is a de minimis portion of the contract price. Special Conditions in the ITB require Respondent to award a single contract for included items to a single bidder. Special Conditions state that, "During the term of the contract established by this bid, all purchases of items will be made from the successful bidder." 2/ Excluded Items Special Conditions require that, "The bidder shall offer a fixed discount from retail prices on all excluded items." Excluded items include high technology lamps. The requirement for a fixed discount on excluded items is not considered in evaluating bid prices for included items. Rather, the requirement is intended to reduce the state's cost for both included and excluded items by assuring a meaningful discount on excluded items. Formatting Requirements Special Conditions prescribe the format in which bids must be submitted. Price lists and authorized dealers' lists are required to be submitted in hard copy and on computer diskette. The format prescribed for computer diskette includes requirements for font and graphics. The Special Conditions state that, "Failure to comply with this requirement will result in disqualification of your bid." The Bids The ITB prohibits the alteration of bids after they are opened. Respondent opened bids on April 10, 1996. Seven vendors submitted bids in response to the ITB. Included Items Four vendors, including Petitioner, submitted a bid for both Item 1 and Item 2 lamps. Intervenor and two other bidders did not submit a bid for Item 2 lamps. General Conditions Intervenor deleted paragraphs 11 and 24 of the General Conditions from its bid. At the direction of Intervenor's legal department in Cleveland, Ohio, Intervenor's regional sales manager struck through paragraphs 11 and 24 and initialed the deletions. The deletions are consistent with Intervenor's corporate policy. Intervenor routinely objects to contract provisions requiring inspection of Intervenor's facilities. Excluded Items Petitioner's bid includes a fixed discount of 44 percent on excluded items. Intervenor's bid includes a fixed discount of 0 percent. Formatting Requirements Intervenor included the information required by the ITB on the diskette it submitted with its bid. However, Intervenor supplied the information in Courier 12 characters per inch ("cpi") font, not the Courier 10 cpi font prescribed in the ITB. Proposed Agency Action Respondent determined that Intervenor's bid was responsive. The purchasing specialist for Respondent who reviewed each bid to determine if it was responsive failed to observe the deleted paragraphs in Intervenor's bid. The purchasing specialist forwarded those bids determined to be responsive to the purchasing analyst assigned by Respondent to: determine if the lamps offered in each bid met the specifications prescribed in the ITB; and evaluate bid prices. The purchasing analyst noted that paragraphs 11 and 24 were deleted from Intervenor's bid. The purchasing analyst and purchasing specialist conferred. They determined that paragraph 5 of the General Conditions cured Intervenor's deletions without further action. The purchasing analyst correctly determined: that lamps offered by Petitioner and Intervenor met ITB specifications; that Intervenor's bid is the lowest bid for Item 1 lamps; that Petitioner's bid is the second lowest such bid; and that Petitioner's bid is the lowest bid for Item 2 lamps. Petitioner's bid for Item 1 lamps is approximately five percent greater than Intervenor's bid. Respondent proposes to award one contract for Item 1 lamps to Intervenor. Respondent proposes to award a second contract for Item 2 lamps to Petitioner. At 4:00 p.m. on May 20, 1996, Respondent posted its intent to award the contract for Item 1 lamps to Intervenor. Petitioner timely filed its formal protest on June 3, 1996. Respondent did not award a contract for excluded items. Respondent's failure to award a contract for excluded items is not at issue in this proceeding. Arbitrary Respondent's proposed award of a contract to Intervenor for substantially all of the items included in the ITB is a decisive decision that Respondent made for reasons, and pursuant to procedures, not governed by any fixed rule or standard prescribed either in the ITB or outside the ITB. Respondent's proposed agency action is arbitrary. Excluded Items The requirement for bidders to offer a fixed discount on excluded items operates synergistically with the requirement for Respondent to award a single contract on included items to a single bidder. The combined action of the two requirements operating together has greater total effect than the effect that would be achieved by each requirement operating independently. The requirement for a fixed discount on excluded items, operating alone, may not induce a bidder who could receive a contract solely for Item 2 lamps to offer a discount that is as meaningful as the discount the bidder might offer if the bidder were assured of receiving a contract for Item 1 and 2 lamps upon selection as the lowest bidder. 3/ By assuring bidders that a single contract for Item 1 and 2 lamps will be awarded to a single bidder, the ITB creates an economic incentive for bidders to provide a meaningful discount on excluded items. Respondent frustrated the synergy intended by the ITB by applying the requirements for a fixed discount and for a single contract independently. Respondent penalized the bidder conforming to the requirement for a fixed discount on excluded items by awarding only a de minimis portion of the contract to the bidder. Respondent rewarded the bidder not conforming to the requirement for a fixed discount on excluded items by awarding substantially all of the contract to that bidder. If Respondent elects to purchase all excluded items from Petitioner, Respondent will have used the contract for Item 1 lamps to induce a meaningful discount from Petitioner without awarding Petitioner with the concomitant economic incentive intended by the ITB. Such a result frustrates the ITB's intent. Paragraph 5 Respondent's interpretation of paragraph 5 fails to explicate its proposed agency action. Respondent's interpretation of paragraph 5: leads to an absurd result; is inconsistent with the plain and ordinary meaning of the terms of the ITB; and is inconsistent with Respondent's actions. Respondent's interpretation imbues paragraph 5 with limitless curative powers. Respondent's interpretation empowers paragraph 5 to cure the deletion of all General Conditions in the ITB whether stricken by pen or excised with scissors. Respondent's interpretation of paragraph 5 would transform a bid containing no General Conditions into a responsive bid. Respondent's interpretation of paragraph 5 is inconsistent with the plain and ordinary meaning of its terms. Paragraph 5 operates to cure "additional" terms. It does not operate to restore deleted terms. Respondent's interpretation of paragraph 5 is inconsistent with Respondent's actions. Respondent did not rely on paragraph 5 to cure Intervenor's deletions without further action. Respondent took further action to cure the deletions. Further Action On the morning of May 20, 1996, the purchasing analyst for Respondent telephoned Intervenor's regional sales manager. The purchasing analyst demanded that Intervenor accept the conditions Intervenor had deleted from its bid by submitting a letter of acceptance before the bid tabulations were posted at 4:00 p.m. on the same day. The regional sales manager contacted Intervenor's corporate headquarters in Cleveland, Ohio. Intervenor authorized the regional sales manager to accept the deleted paragraphs. By letter faxed to Respondent at approximately 3:20 p.m. on May 20, 1996, Intervenor accepted the paragraphs it had previously deleted. The letter stated that, "GE Lighting [will accept] the Contract Conditions noted in Paragraphs 11 and 24 of the Lamp Quotation." [emphasis not supplied] At 4:00 p.m. on May 20, 1996, Respondent posted the bid tabulation form. The bid tabulation form stated that the "award is contingent upon General Electric's acceptance of all the terms in conditions (sic)" in the ITB. Respondent argues that the purchasing analyst who contacted Intervenor on the morning of May 20, 1996, exceeded her authority. Respondent characterizes the word "contingent" in the bid tabulation form as "poorly written" and a "bad word." Agency Construction Of ITB Terms Respondent construes terms in the ITB in a manner that is inconsistent with their plain and ordinary meaning. The ITB requires that, "The bidder [shall] offer a fixed discount from retail price list on all excluded items." [emphasis supplied] Respondent interprets the quoted provision as meaning the bidder may offer such a fixed discount if the bidder elects to do so. The purpose of the ITB is to establish "[a] 24 month contract" to supply large lamps to the state. [emphasis supplied] Respondent interprets the quoted provision as meaning that the purpose of the ITB is to establish two contracts. The ITB states that, "During the term of the contract established by this bid, all purchases of items [will] be made from [the] successful bidder." [emphasis supplied] Respondent interprets the quoted provision as meaning that purchases of some items will be made from one successful bidder and that purchases of other items will be made from a second successful bidder. The ITB states that the contract "[shall] be made statewide on an all or none basis" to the responsive bidder who satisfies the conjunctive requirements for: "[the] lowest "Award Figure Item (1; [and] lowest Award figure for Item (2." [emphasis supplied] Respondent interprets the quoted provision as meaning that separate contracts may be made statewide on less than an all or none basis to separate responsive bidders who satisfy the disjunctive requirements for either the lowest bid for Item 1 lamps or the lowest bid for Item 2 lamps, or both. The ITB requires offers to be submitted for all items listed within a group for a bid to qualify for evaluation. Respondent interprets the requirement as meaning that a bidder who does not qualify for evaluation for all of the groups in the contract nevertheless qualifies for evaluation for the contract. Finally, the ITB states that failure to comply with the formatting requirements for the diskette "[will] result in disqualification of your bid." [emphasis supplied] Respondent interprets the quoted language to mean that failure to comply with prescribed formatting requirements may result in disqualification of a bid. The interpretations of the quoted terms proposed by Respondent, individually and collectively, frustrate the purpose of the ITB. They also ignore material requirements of the ITB. Material Deviation Respondent deviated from the rule or standard fixed in the ITB in several respects. First, Respondent altered the bid evaluation procedure prescribed in the ITB. Second, Respondent ignored the requirement to award a single contract to a single bidder. Third, Respondent ignored the requirement that bidders provide a fixed discount on excluded items. Fourth, Respondent ignored the requirement to comply with the formatting requirements prescribed in the ITB. Each deviation from the rule or standard fixed in the ITB is a material deviation. Each deviation gives Intervenor a benefit not enjoyed by other bidders. Each deviation affects the contract price and adversely impacts the interests of Respondent. 4/ 5.5(a) Benefit Not Enjoyed By Others Intervenor enjoyed a benefit not enjoyed by other bidders. Intervenor obtained a competitive advantage and a palpable economic benefit. Respondent altered the bid evaluation procedure prescribed in the ITB. On the morning of May 20, 1996, Respondent disclosed the bid tabulations to Intervenor alone, 5/ gave Intervenor an opportunity that lasted most of the business day to determine whether it would elect to escape responsibility for its original bid, allowed Intervenor to cure the defects in its bid, accepted Intervenor's altered bid, and conditioned the bid tabulations on Intervenor's altered bid. Respondent used a bid evaluation procedure that is not prescribed in the ITB and did not allow other bidders to participate in such a procedure. 6/ In effect, Respondent rejected Intervenor's initial bid, with paragraphs 11 and 24 deleted, and made a counter offer to Intervenor to accept a bid with paragraphs 11 and 24 restored. Intervenor accepted Respondent's counter offer. Respondent excluded other bidders from that process. Respondent gave Intervenor an opportunity to determine whether it would elect: to escape responsibility for its original bid by declining Respondent's counter offer; or to perform in accordance with an altered bid by restoring paragraphs 11 and 24. A bidder able to elect not to perform in accordance with its bid has a substantial competitive advantage over other bidders unable to escape responsibility for their bids. 7/ Respondent awarded substantially all of the contract to Intervenor even though Intervenor failed to provide a meaningful discount on excluded items. Respondent provided Intervenor with a palpable economic benefit. 5.5(b) Bid Price And Adverse Impact On The State Respondent did not award a contract for excluded items. Respondent's proposed agency action allows Respondent to purchase excluded items from either Intervenor or Petitioner. If Respondent were to purchase all of the excluded items it needs from Intervenor, Respondent could pay substantially more for excluded items than Respondent would save from the five percent price advantage in Intervenor's bid for Item 1 lamps. In such a case, Respondent's proposed agency action would effectively increase costs to the state that are inherent, but not stated, in the ITB. 8/ Conversion of incorrectly formatted data to the required font shifts prices to incorrect columns and causes other problems in accessing information in the diskette. Such problems can not be rectified easily but require substantial time and effort. Responsive Bidder Respondent did not award the contract intended by the ITB to the lowest responsive bid. Although Intervenor's bid is the lowest bid for Item 1 lamps, it is not the lowest responsive bid for Item 1 and 2 lamps. Petitioner's bid is the lowest responsive bid for Item 1 and 2 lamps. 9/ Respondent is statutorily required to award the contract to the lowest responsive bidder. 10/ Illegal Intervenor's bid is not responsive within the meaning of Sections 287.012(17), Florida Statutes (1995). 11/ It does not conform in all material respects to the ITB. Intervenor's unaltered bid deletes paragraphs 11 and 24. It does not include a fixed discount on excluded items, does not include a bid for Item 2 lamps, and does not conform to the formatting requirements in the ITB. Section 287.057 requires Respondent to award the contract to the bidder who submits the lowest responsive bid. Respondent has no authority either: to consider bids that are not responsive; or to award the contract to a bidder other than the lowest responsive bidder. Respondent's attempt to engage in either activity is ultra vires and illegal. Minor Irregularities The ITB encourages, but does require, bidders to include quantity discounts for Item 1 and 2 lamps. Petitioner's bid does not include quantity discounts. Petitioner's bid does not fail to conform to material requirements in the ITB. Petitioner does not manufacture Item 1 and 2 lamps. Sylvania manufactures the lamps Petitioner sells. Petitioner has no legal right to require Sylvania to allow inspection of its facilities pursuant to paragraph 11 of the General Conditions. Petitioner's ability to provide the requisite inspections requires the cooperation of Sylvania. Petitioner's bid requires payment by the state within 30 days of an invoice. Section 215.422 and the ITB provide that Respondent has 40 days to issue warrants in payment of contract debts and that interest does not accrue until after 40 days. The defects in Petitioner's bid are minor irregularities within the meaning of Florida Administrative Code Rule 60A-1.001(16). 12/ They neither affect the bid price, give Petitioner a competitive advantage, nor adversely impact Respondent's interests. Petitioner has the practical ability to arrange inspection's of Sylvania's facilities. Petitioner is legally responsible for failing to do so. Respondent's employees have never visited Sylvania's facilities during the 10 years in which Petitioner has been the contract vendor to the state. The requirement for payment within 30 days does not obviate the provisions of Section 215.422. Private contracts can not alter mutually exclusive statutory provisions.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order granting Petitioner's protest of Respondent's proposed agency action. RECOMMENDED this 26th day of September, 1996, in Tallahassee, Florida. DANIEL S. MANRY, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of September, 1996.
The Issue Whether Petitioner/Intervenor Hedin's challenge to Respondent's preliminary determination to award Lease No. 590:2241 to 1436 Building, Inc. should be sustained? Whether Petitioner/Intervenor Schlitt's challenge to said preliminary determination should be sustained?
Findings Of Fact Based upon the record evidence, the following Findings of Fact are made: 1 In March, 1991, after requesting and receiving approval from the Department of General Services, the Respondent issued an Invitation to Bid for Lease No. 590:2241 (hereinafter referred to as the "ITB"). The cover page of the ITB contained the Bid Advertisement, which read as follows: The State of Florida, Department of Health and Rehabilitative services is seeking approximately 17,064 net rentable square feet of office space to lease in Indian River County within the following boundaries: North, to Lindsey Road, South to Olso Road, East to A1A and West to Kings Highway. Space must be in an existing building. Occupancy no later than October 1, 1991, or within 120 days after notification of bid award, whichever occurs last. Desire a five (5) year lease with five (5) one year renewal options. Sealed bids will be received until 3:30 p.m.,, April 24, 199[1] at Riviera Beach, FL. Information and specifications will be provided to all interested parties at a mandatory pre-proposal conference to be held at Department of Health and Rehabilitative Services, 1050 15th Street West, Riviera Beach, FL. 33404, April 5, 1991 at 1:00 p.m. The Department of HRS reserves the right to reject any and all bids received and if necessary to reinstate procedures for soliciting competitive bids. The office space sought by Respondent was to house a client service center that is currently operating out of a 12,000 square foot facility owned by Petitioner/Intervenor Hedin. Respondent needs approximately 5,000 more square feet of office space for this center. Page B-1 of the ITB contained the definitions of various terms used in the ITB. Among the terms defined was "lowest and best bid." "Lowest and best bid" was defined as follows: That bid selected by the District Administrator, designee, or Deputy Secretary upon the recommendation of the bid evaluation committee following an objective and detailed process to evaluate and compare bids. "Lowest" refers to the total evaluation score. Weights for evaluation criteria are prescribed on pages B-7 through 9. Actually, this information was found on pages B-5 though 7 of the ITB, which read in pertinent part as follows: EVALUATION OF BIDS Bids received are first evaluated to determine technical responsiveness, such as use of Bid Submittal Form, inclusion of required information, data, attachments, and signatures. Non- responsive bids will be withdrawn from further consideration. Non-responsive bidders will be informed promptly by certified mail. Responsive bids are presented to a bid evaluation committee for comparison and formulation of a recommendation for award. This is accomplished by a visit to each proposed property and application of the evaluation criteria. The committee's recommendation will be presented to the Department official having award authority for final evaluation and determination of a successful bidder. EVALUATION CRITERIA AWARD FACTORS The successful bidder will be that determined to be the lowest and best. All bids will be evaluated based upon the award factors enumerated below: Associated Fiscal Costs Rental Rental rates for basic term of lease. Evaluated using present value methodology by application of she present value discount rate of 8.74%. 2/ (Weighting: 35 minimum) Rental rates for optional renewal terms of lease. Rates proposed are within projected budgeting restraints of the Department. (Weighting: 5 minimum) Total for rental shall be not less than 40. Moving Costs: a) Cost of relocating communications network computer drop lines as determined by a site survey conducted at each proposed facility by the Department's management information office, or: (Weighting: 5 maximum) b) Cost of relocation of major statewide operational data system as determined by a site survey conducted at each proposed facility by qualified data center management. (Weighting: 6 maximum) Telephone costs as determined by a site survey conducted at each proposed facility by an engineer from the applicable deregulated vendor. (Weighting: 5 maximum) Relocation of furniture and equipment not addressed above. (Weighting: 5 maximum) LOCATION The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on the efficient and economical conduct of Departmental operations planned for the requested space. Proximity of facility to a preferred area, such as a courthouse or main traffic arteries. (Will not be applicable if there are no preferred areas within the bid boundaries). (Weighting: 5 maximum) Frequency and availability of satisfactory public transportation near the offered space. (Weighting: 5 maximum) Proximity of offered space to the clients to be served by the Department at this facility. (Weighting: 5 maximum) Aesthetics of the building, property the building site [is] on, and of the surrounding neighborhood. (Weighting: 1 maximum) Security issues posed by building and surrounding neighborhood. (Weighting: 1 maximum) PROPERTY Susceptibility of the property's design to efficient layout and good utilization, such as ability of physical structure to house large units together and in close proximity to interdependent units. (Weighting: 15 maximum) Suitability of the building, parking area and property as a whole for future expansion. (Weighting: 5 maximum) Provision of the aggregate square footage in a single building. Proposals will be considered (but fewer points given) which offer the aggregate square footage in not more than two buildings provided the buildings are immediately adjacent to or within 100 yards of each other. If in separate buildings, the structures are connected by enclosed climate controlled walkways. (Weighting: 2 maximum) Prospective bidders were instructed on page B-3 of the ITB that they had to submit their bids on the 22-page Bid Submittal Form, which comprised Section C of the ITB. The Bid Submittal Form (BSF) provided detailed information regarding the needs of the Department and the terms, conditions and requirements that prospective bidders were expected to meet. Among the requirements addressed was that the proposed space be an "existing building," meaning that it was "dry, fully enclosed, and capable of being physically measured." The BSF further indicated that a multistory building would be acceptable, provided that it met certain specified requirements. In addition, pages C-3 through 4 of the BSF informed prospective bidders that, as part of their bid submittal, they would have to provide, among other things, the following: * * * b. A scaled (1/16" or 1/8" or 1/4" 1'0") floor plan showing present configurations with measurements. The final floor plan will be described in the specifications. * * * A scaled site layout showing present location of building(s), location, configuration and number of parking spaces assigned to the Department, access and egress routes and proposed changes. This is to be drawn to scale. Final site layout will be a joint effort between Department and Lessor so as to best meet the needs of the Department. The subject of floor plans was also discussed on page C-11 of the ITB, which provided in pertinent part as follows: Final floor plans will be a joint effort of Departmental staff and the successful bidder. The successful bidder is to provide architectural services by a licensed architect to prepare renovation plans. The final floor plan is subject to Departmental determination and State Fire Marshal review and approval. 3/ Prospective bidders were issued the following advisement and warning on page B-8 of the ITB regarding their protest rights: Any person may dispute any part of the competitive bid process through the filing of a protest. To be considered, a protest must be filed in accordance with Section 120.53(5), Florida Statutes, and Chapter 10-13.11 Florida Administrative Code. Failure to file a protest within the prescribed time limits shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. Prospective bidders, who did not want to file a protest, but merely desired clarification regarding a matter relating to the bidding process, were directed, on page B-3 of the ITB, to follow the following procedure: Any questions concerning an interpretation of meaning, ambiguity, or inconsistency on this project are to be received in writing by the project contact person listed on page A-1 [Steven Young) at least 5 working days prior to bid opening so that a written response may be provided to all bidders. 4/ The mandatory pre-proposal conference on the ITB was held as scheduled on April 5, 1991. Petitioner/Intervenor Schlitt, Petitioner/Intervenor Hedin, and Intervenor 1436 Building, Inc. (hereinafter referred to as "`1436") appeared in person or through a representative at the conference. One other prospective bidder, Alan Taylor, was also in attendance. Among the topics discussed at the pre-proposal conference was the present value index discount rate that would be applied in evaluating proposals. The prospective bidders were advised that the rate which appeared on page C-21 of the ITB-- 7.73%--, not the 8.74% rate appearing on page B-5, would be used. Prospective bidders were also told at the pre- proposal conference that the maximum number of total points available for moving costs was not 15 or 16 as a reading of the ITB might suggest, but 21: 5 for item 1)a) (computer drop lines);6 for item 1)b) (statewide operational data system equipment); 5 for item 2 (telephones); and 5 for item 3 (furniture and other equipment). Under the ITB, as originally issued and clarified at the pre-proposal conference (hereinafter referred to as the "Original ITB"), Respondent was to pay its own moving costs, as it had consistently done in the past, without any contribution on the part of the successful bidder and it would award points to each bidder for moving costs based upon what it would cost Respondent, according to its estimates, to relocate computer drop lines, statewide operational data system equipment, telephones, and furniture and other equipment to the facility proposed by that bidder. The less the expense to the Department to relocate these items, the more points a bidder would receive. Accordingly, to the extent that he intended to offer space already occupied by Respondent, Petitioner/Intervenor Hedin had an advantage over the other prospective bidders under the Original ITB. Some time after the pre-proposal conference, David Feldman, 1436's representative, complained to Respondent about this advantage enjoyed by Hedin in the category of moving costs and inquired if anything could be done about it. Steven Gertel, the Respondent's Assistant Staff Director for Facilities Services, Kevin McAloon, the General Services Manager for Respondent's District IX, Louis Consagra, the then Office Operations Manager for General Services for District IX, and Steven Young, the Facilities Services Manager for District IX and the contact person referenced in the ITB, discussed the matter during a telephone conference call held on April 11, 1991. During their discussion, it was decided that it would be in the best interest of the Department, which was operating under severe fiscal constraints, to change the ITB to allow prospective bidders to essentially buy points by agreeing to pay all or a portion of Respondent's estimated moving costs. Such a change, it was thought, would enhance the competitiveness of the bidding process. Before making the change, however, Respondent attempted to quickly estimate what its costs would be if it had to relocate computer drop lines, statewide operational data system equipment, telephones, and furniture and other equipment to another facility in Indian River County within the geographical boundaries prescribed in the ITB. Respondent estimated that it would cost between $25,000 and $30,000 to relocate computer drop lines and statewide operational data system equipment, $35,000 to $45,000 to relocate telephones and $8,000 to $10,000 to relocate furniture and other equipment. In arriving at these estimates, Respondent relied upon agency personnel who, because of their experience, expertise and/or access to contracts with vendors and other pertinent documents, appeared to be reliable sources of information. On April 12, 1991, the day after the telephone conference call and twelve days before the scheduled bid opening, Facilities Services Manager Young, on behalf of the Department, sent by United States Certified Mail, return receipt requested, to all four prospective bidders who attended the mandatory pre- proposal conference on April 5, 1991, the following memorandum: Page C-22 of the Bid Submittal Form has been changed and is enclosed for use in the Invitation to Bid. Please call me if you have any questions on this change/addition or any information that is needed to complete your Bid Submittal on or before 3:30 p.m., April 24, 1991. The "changed" page C-22 of the ITB, which accompanied the foregoing memorandum, provided as follows with respect to moving costs: The bidder will respond to the items as stated in the Bid submittal,, Page B-6, b. Moving Costs: 1) a) b), 2), 3). Department Bidder Estimate Response 1) a) b) $25,000 to $30,000 2) $35,000 to $45,000 3) $8,000 to $10,000 Young also telephoned each of the four prospective bidders and explained to them how moving costs would be evaluated in light of this revision to the ITB. He told them that if they indicated under "Bidder Response" on page C-22 that they would be willing to pay up to $30,000 for item 1, $45,000 for item 2 and $10,000 for item 3, and in Hedin's case, provided he submitted a bid that included the 12,000 square feet of space presently occupied by Respondent, 28% of these amounts, they would capture the maximum number of points available for each of these items, and that if they indicated a willingness to contribute less than these amounts, they would be awarded points in proportion to amount of their proposed contribution. 5/ Respondent's decision to allow Hedin to earn the same amount of points as the other prospective bidders for moving costs by pledging to contribute only 28% of what his competitors had to pledge was based upon square footage considerations. If a bidder other than Hedin was awarded the lease, Respondent would have to move into more than 17,000 square feet of space. If, on the other hand, Hedin submitted a bid that included the 12,000 square feet of space presently occupied by Respondent and he was the successful bidder, Respondents would be occupying only 5,000 or so square feet of space it had not previously occupied, or approximately 28% of the square footage that it would have to move into if the lease had been awarded to another bidder. The ITB, as so revised and clarified by Respondent (hereinafter referred to as the "Revised ITB"), contemplated that the successful bidder would be obligated to pay only Respondent's actual moving costs up to the amounts pledged on page C-22 of the bidder's completed BSF. Moving costs in excess of the amounts pledged by the successful bidder would be borne by Respondent. Respondent wanted to avoid a situation where, because of Respondent's estimating errors, a successful bidder: was forced to bear a cost in connection with its bid that it did not anticipate at the time it had submitted the bid. Respondent, however, was quite confident that the estimates it had made and incorporated in the Revised ITB would not prove to be too low. 6/ All four of the prospective bidders who participated in the mandatory pre-proposal conference submitted timely bids. Each of bids was deemed to be responsive. Facility Services Manager Young then performed the calculations necessary to determine the number of points that each bidder should be awarded for associated fiscal costs, including rental costs and moving costs. This was purely an objective and non-judgmental exercise. Young performed these calculations in accordance with the methodology that had been described to all of the bidders prior to the submission of their bids. Schlitt had the lowest rental rates for the basic term of the lease, as well as for the five option years. Accordingly, he was awarded the maximum 35 points for the former and the maximum 5 points for the latter, for a total of 40 points. The scores received by the other bidders for rental costs were as follows: 1436- basic term: 34.125, and option years: 4.340; Hedin- basic term: 28.865, and option years: 3.710; and Taylor- basic term: 31.938, and option years: 4.575. Schlitt and 1436 indicated on page C-22 of their completed BSFs that they were each willing to pay up to $30,000 for the relocation of computer drop lines and statewide operational data system equipment, up to $45,000 for the relocation of telephones and up to $10,000 for the relocation of furniture and other equipment. Accordingly, they were both awarded the maximum 21 points for moving costs. Hedin indicated on page C-22 of his completed BSF that he was willing to pay up to 28% of these amounts ($8,400.00 for the relocation of computer drop lines and statewide operational data system equipment, $12,600 for the relocation of telephones and $2,800 for the relocation of furniture and other equipment). Accordingly, he too was awarded the maximum 21 points for moving costs. Taylor, who indicated on page C-22 of his completed BSF a willingness to contribute only a small fraction of the Respondent's estimated moving costs, received a total of 1.667 points for moving costs. After computing these scores 7/ Young prepared a written synopsis of all four bids that had been submitted. He gave copies of his synopsis to the four members of the bid evaluation committee, along with score sheets for them to use in their evaluation of these bids. Typed in on each score sheet were the scores the bidders had received for rental costs and moving costs. These scores were accurately reported on the score sheets except for the score that Hedin had been awarded for rental costs associated with the basic term of the lease. The score sheets erroneously indicated that Hedin had been awarded 32.375 points, rather than 28.665 points, for this item. The four members of the bid evaluation committee were: General Services Manager McAloon; Frank Mueller, District IX's chief financial officer; and Kathy Pelaez and Alfred Swanson, two HRS administrators who supervise staff headquartered in Respondent's Indian River County client service center. 8/ Young, because he was the Facilities Services Manager, was prohibited by agency practice 9/ from serving on the bid evaluation committee. The bid evaluations committee visited each of the bidder's proposed facilities before determining the amount of points to award them for the non- economic categories, i.e., location and property, set forth in the Revised ITB. The committee members visited Schlitt's, 1436's and Taylor's proposed facilities on the same day. They subsequently paid a visit to Hedin's proposed property, which consisted of the building presently occupied by Respondent, plus an addition of approximately 5,000 square feet connected to the existing building by a walkway. The delay in visiting Hedin's proposed facility was the result of a determination, later overturned, that the entire facility was not dry and measurable as required by the Revised ITB. Following their visits to Schlitt's, 1436's and Taylor's proposed facilities, the members of the bid evaluation committee met as a group and discussed each of these proposed facilities. They had a similar meeting and discussion about Hedin's proposed facility after their visit to that proposed facility. Applying the criteria set forth in the Revised ITB, the committee members agreed that the following point awards should be made for the categories of location and property: location/proximity to preferred area (evaluation criterion 2.a., 5 point maximum)- Schlitt: 3, 1436: 2, Hedin: 5, and Taylor: 1; location/public transportation (evaluation criterion 2.b., 5 point maximum)- all four bidders: 0; location/proximity to clients (evaluation criterion 2.c., 5 point maximum)- Schlitt: 3, 1436: 2, Hedin: 5, and Taylor: 1; location/aesthetics (evaluation criterion 2.d., 1 point maximum): Schlitt, 1436, and Hedin: 1, and Taylor: 0; location/security (evaluation criterion 2.e., 1 point maximum)- all bidders: 1; property/design (evaluation criterion 3.a., 15 point maximum)- Schlitt: 9, 1436: 15, Hedin: 14, and Taylor 10; property/future expansion (evaluation criterion 3.b., 5 point maximum): Schlitt: 4, 1436: 5, Hedin 3.5, and Taylor 3, and property/square footage in single building (evaluation criterion 3.c., 2 point maximum)- Schlitt, 1436, and Taylor: 2, and Hedin: 1. Each of the members of the evaluation committee then recorded these scores on their individual score sheets. Although they agreed to each award the same number of points, evaluation committee members were free to do otherwise. They were not subjects to any threats or coercion. The members of the evaluation committee made a good faith effort to fairly base their point awards on the evaluation criteria for the categories of location and property prescribed in the Revised ITB. For instance, they awarded Schlitt only nine out of a possible 15 points for property/design because of their reasonable concerns that the space he offered, which was located in a multistory building which would have other tenants in addition to the Department, would not be able to house large units together and in close proximity to interdependent units. The committee members did not have similar concerns about the space offered by 1436. Accordingly, they awarded 1436 the maximum 15 points for this category. The points awarded by the evaluation committee for location and property were added to the points the bidders had previously received for rental and moving costs to obtain a total point award for each bidder. The; results were as follows: 1436- 87.465 total points; Schlitt- 84 total points; Hedin- 83.875 total points; and Taylor- 56.18 total points. 1436's bid was therefore the "lowest and best bid," as defined on page B-1 of he Revised ITB. Consistent with the Revised ITB's pronouncement that "[t]he successful bid will be that determined to be the lowest and best," the evaluation committee recommended to the District IX Administrator that 1436 be awarded Lease No. 590:2241. General Services Manager McAloon, in his capacity as chairman of the evaluation committee, provided the District IX Administrator with a written justification for the committee's recommendation. 10/ The committee's recommendation, as well as its written justification, were adopted by the District IX Administrator, who, by letter dated October 3, 1991, to 1436, gave notice of the Department's intention to award 1436 Lease No. 590:2241. Copies of this letter were sent to all bidders. The Department's preliminary decision to award the lease to 1436 was the product of, not any fraudulent, arbitrary, capricious or unlawful conduct on the Department's part, but rather the honest exercise of the agency's discretion. After receiving their copies of the District IX Administrator's October 3, 1991, letter to 1436, Schlitt and Hedin filed protests and initiated the instant proceedings.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Health and Rehabilitative Services enter a final order awarding Lease No. 590:2241 to 1436 over the protests of Schlitt and Hedin. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of February, 1992. STUART M. LERNER Heading Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of February, 1992.
Findings Of Fact Prior to June, 1988, HRS determined that it needed 32,000 square feet of office space to house some of its indigent social services for southern Escambia County. Since the desired office space is greater than 2,000 square feet HRS was required to competitively bid lease number 590:1984. Towards that end, Respondent prepared an Invitation to Bid and a bid submittal package. The package contained various bid specifications, bid evaluation criteria and the numerical weight assigned to each of those criteria. Specific areas of importance to Respondent in the selection of its office space were: client safety one building to house all its units employee morale moving costs traffic flow within the building public access Many of the above areas were important to HRS since the agency would render indigent services to approximately 17,000 people a month, many of whom are handicapped or lack good mobility due to age or infirmity. Employee morale was important because of high employee burn out due to rendering aid to so many people who have so little and supplying a pleasant environment conducive to the work of the employees. Moving costs were important should HRS be required to find other space to operate in while necessary remodeling took place in the selected building, or be required to incur the expense of moving to a new building. 1/ All of the above areas were covered by one of Respondent's weighted bid evaluation criteria. The District Administrator of HRS, Chelene Schembera, is ultimately responsible for bidding, selection and leasing of all HRS facilities within District I, including Escambia County, Florida. In order to accomplish this task, Ms. Schembera appointed a bid evaluation committee to review and grade the responsive bids under the criteria established in the bid package, and to recommend to her the committee's choice of the lowest and best bid. Ms. Schembera's purpose in establishing the bid evaluation committee was to secure a cross section of input from people who had a variety of backgrounds and knowledge that would be material in evaluating the office space under the uses for which it was intended and the relative public worth of the work space. Ms. Schembera appointed individual who were familiar with the type of work to be done in the proposed space, as well as a persons familiar with the bid process. Ms. Schembera assigned to serve on the committee Charles Bates, Deputy District Administrator; Jim Peters, to provide a fiscal and overall administrative perspective as well as bid expertise; two citizens from the District Advisory Council to assure objectivity and to look at the properties from the perspective of a private citizen; Mamun Rashied, a program manager; Darlene McFarland, a program manager; Cherie Neal, a unit supervisor and program worker; and Stacey Cassidy, a clerical employee. Ms. Schembera did not personally know Cherie Neal or Stacey Cassidy. These staff members were designated by the supervisors upon Ms. Schembera's direction that she wanted persons who were both intelligent and respected by their peers. One private citizen member of the committee did not participate. The committee as constituted showed a great deal of thought on Ms. Schembera's part to ensure the objectivity of the bid process she was engaging in and to ensure the maximum amount of input from persons who had experience relevant to the overall review of the proposed real estate and to the decision they were being asked to make. The selection of the bid evaluation committee members was neither an arbitrary nor capricious act on Ms. Schembera's part. In fact, the evidence demonstrated the merit in constituting the committee as she did for the input she sought. The bid evaluation committee members, minus Mr. Bates, were briefed on their duties by Joe Pastucha, Facilities Services Manager. Mr. Pastucha is part of the staff responsible for the bid process at HRS. He provided these committee members with the weighted bid evaluation criteria found at page 15 in the bid package. He also gave the committee members a copy of Chapter 5 of the HRS manual containing guidelines for the bid process. His verbal instructions on specific procedures to follow in the evaluation process were limited since he did not wish to improperly influence the committee members. On July 20, 1988, HRS received three bids responding to its invitation to bid on Lease Number 590:1984. Bid A was submitted by Phillips and Company, the apparent second lowest bidder and Intervenor in this case. Its property consisted of one multi-story building located at 1740 North Palafox Street, Pensacola, Florida. Bid B was not responsive and therefore was not considered by HRS and is not a part of this litigation. Bid C was submitted by Petitioner Carmon S. Boone, and was the apparent low bid. Mr. Boone's property consisted of two buildings located at 401 and 411 North Baylen Street, Pensacola, Florida. The Boone property is the present location of Respondent's offices. Both Bid A and Bid C were within the mandatory geographical area designated in the bid package. Once the bids were received the bid evaluation committee began its work. The committee members, minus Mr. Bates, visited the Phillips property. However, the members did not visit the Boone property. There was no need. Four of the members currently worked at the Boone property and the other members had previously visited the Boone property on various other occasions. Mr. Bates was likewise already familiar with both properties. All members were sufficiently familiar with the cogent aspects of each property to allow them to make a rational decision. The bid evaluation committee, minus Mr. Bates, met as a group to evaluate each property in accordance with the weighted bid evaluation criteria. Each individual scored their sheets separately and the general consensus was supportive of recommending the Phillips property. Five committee members scored Mr. Phillips' property higher than the Boone property. The one exception was Mr. Peters who felt that HRS could not support a bid awarded for other than monetary reasons, i.e., he felt the lowest bid had to be accepted. Mr. Bates later reviewed all the bid synopsis sheets of the committee members and discussed the bid award with Mr. Peters and Mr. Pastucha. Mr. Bates felt that the Phillips property was the lowest and best bid. At about the same time, the staff responsible for providing technical assistance to the committee and the District Administrator were made aware that the general consensus of the committee was leaning towards the second lowest bidder, Phillips and Company, as the lowest and best bid. The staff members, one of whom was a bid committee member, disagreed with the award of the bid to Phillips and Company because the Boone property was the lower bid. The staff members sought to head off the committee's intended recommendation. The staff personnel held a meeting with some of the committee members in order to get them to join in a recommendation to Ms. Schembera of the Boone property. Mr. Boone was invited and attended the meeting. He was allowed to improperly bolster his bid by agreeing to convert the two buildings to one and other lesser additions. /2 The potential decision was discussed, but no committee member changed his or her mind. However, through a total lack of communication, a run away staff somehow rationalized themselves into a position of being authorized to submit a letter for Ms. Schembera's signature which awarded the Boone property the lease. Ms. Schembera became aware of her staff's attempt to subvert the bid process she had established. She refused to sign the letter submitted by the staff. She removed the staff member of the committee as a voting member. The staff member had supported the Boone property. She also removed a committee member who supported the Phillips property as a voting member. Ms. Schembera feared that her staff had improperly influenced this member to such an extent that his objectivity had been affected. Both members could still participate in committee discussions. Ms. Schembera thereby reasonably ensured the ongoing objectivity of the bid evaluation committee. The committee was reconvened, minus one member. It recommended the Phillips and Company property. Every reason given by the individual committee members for distinguishing and preferring one bid over another were rational and reasonable considerations and were covered by the bid evaluation criteria. Each individual member gave a rational and reasonable basis for the scoring he or she used on the bid synopsis score sheets. The scoring was done by each member after discussion of the two buildings and without influence from the other committee members. In essence, the committee felt that the Phillips property was the better property for the money. The Phillips property allowed working units to be located in one area with each such unit having its own access. It provided flat safe parking areas and sidewalks, bigger and more elevators, wide halls and windows which presented a bright, happy and pleasant working environment. The Boone property was in two buildings which could not accommodate co-located working units with their own access no matter how much remodeling took place. Parking and sidewalks are on a hill which is slippery when wet. It had one small elevator and narrow halls which did not adequately accommodate more than one wheel chair, and one ground floor where no windows could ever be remodeled into the building leaving a dark, dingy and unpleasant environment. Importantly, every committee member except for the staff member came to the conclusion that the Phillips and Company property was the lowest and best bid. There is no statutory or rule requirement that one scoring method be preferred over another. The only requirement is that the method be rational and reasonable especially where highly subjective, but legitimate criteria are involved in the selection of a particular piece of property. On these facts, the individual scoring methods used by the individual committee members were not arbitrary and capricious, but were very rational and reasonably related to the relative importance the committee members gave the above factors. After reviewing and considering information from the bid evaluation committee, the information on the bid synopsis sheet, and the oral recommendations of Mr. Bates, Mr. Peters and Mr. Pastucha, Ms. Schembera concluded that the Phillips property was vastly better, even considering costs. She found it to be materially superior in terms of construction, organization, client accessibility, handicap accessibility, repairability (in terms of walls), and maneuverability for clients and staff. She felt the Phillips' building's qualities would offer more "humanity" to the process of serving the Department's clients. Additional facts she considered when making her decision included the morale of the staff and their productivity; the ability of staff and clients to conduct their business in a reasonably pleasant, comfortable, safe, and easy to understand and comprehend environment; and the desire to provide a minimally adequate work space. In addition to other monetary costs, she considered energy costs and life cycle costs as reflected on the bid synopsis sheet. The bid synopsis sheet defined minimal energy and life cycle costs to be anything less than 55 BTU's per square feet per year. In this case, the Boone property reflected 39.5 BTU's per square feet and the Phillips property reflected 53.5 BTU's per square feet. Both properties were under the 55 BTU cutoff established by HRS. Translated into monetary figures (life cycle costs) the Boone property reflected a cost of $26,735.00 and the Phillips property reflected a cost of $41,160.00. It was the difference between the energy figures which caught Ms. Schembera's eye. In her layman's opinion, it was incomprehensible that the two buildings would have such a wide divergence of energy costs. /3 She learned from her staff that the information used to compute these costs was supplied by the bidders who had vested interests in the outcome. Ms. Schembera concluded the cost difference was minimal and not of overriding concern in relation to the physical characteristics of the two buildings and how they compared to each other. She quite correctly felt the two buildings were not comparable. In essence, the two buildings' differences in design location and construction rendered neither building comparable to the other building as a like facility under Section 255.254, Florida Statutes. 4/ Based on that information she gave the energy figures relatively little weight. More importantly, however, before the final bid award was made by HRS, the Division of General Services within HRS in its failsafe role in reviewing bids considered the life cycle cost figures of the two bids. The minimal language of Section 255.254, Florida Statutes, has been interpreted by HRS to mean that anything under 55 BTU's is minimal and except in one instance not applicable here, numerical differences under 55 BTU's are immaterial. The Division, without getting into the issue of the likeness of the facilities, concluded that both bids met the Department's interpretation of the "minimal" language of Section 255.254, Florida Statutes, and the relative numerical difference in the energy costs was immaterial. Ms. Schembera is entitled to rely on other more expert HRS Division staff to ensure a proper analysis of highly technical bid specifications such as the energy cost analysis required under Section 255.254, Florida Statutes. It does not matter that the review took place after Ms. Schembera had made her preliminary decision. What is important is that the review be made either personal or vicariously through staff before the final award is made. A proper review of energy costs was, therefore, made by Respondent before the final award was made. Likewise, Ms. Schembera's ultimate decision that the buildings were not comparable like facilities was a proper review of energy costs even though that conclusion was arrived at through a layman's unsophisticated, but more accurate intuition and common sense. To that extent, the energy cost data had no impact on the ultimate choice made by the District Administrator and were properly considered by the District Administrator. 5/ A letter for Ms. Schembera's signature adopting the committee's recommendation was drafted by Mr. Pastucha. The letter was signed and sent to the Department's Division of General Services for review. The District was requested to provide additional justification for its choice by the Department's Division of General Services. Mr. Rashied was directed to draft the response. He simply reorganized the original memorandum into a format more compatible with the Division's direction, clarified a few points and without significantly changing the content, submitted the response as directed. The Division acquiesced in Ms. Schembera's decision.
Recommendation Based 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 dismissing Case NO. 88-4900BID, and awarding lease number 590:1984 to Phillips and Company as the lowest and best bidder. DONE and ORDERED this 5th day of January, 1989, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of January, 1988.
The Issue The issue in this case is whether the Department of Agriculture and Consumer Services (Department) acted in an arbitrary or capricious manner in rejecting all bids due to the vagueness of an addendum to bid specifications, and rebidding a contract for the installation and replacement of EDB water filters.
Findings Of Fact In September, 1986, Global submitted a bid to the Department for the installation and exchange of EDB water filters. The three lowest bidders, including Global, were disqualified. This bid was designated DOF-ADM-13. On or about November 14, 1986, the Department issued new bid specifications, and an invitation to bid designated DOF-ADM-29. Bidders were required to prequalify, but in other respects these specifications were essentially the same as the previous bid, DOF-ADM-13. The deadline for prequalification was December 2, 1986. Prior to the prequalification deadline, Global contacted the Department's contract manager, John Folks, and sought a change in the following prequalification requirement: All vendors must provide in writing from the National Water Quality Association proof that all management personnel involved in the development of the bid and in the completion of the contract (if vendor is awarded bid) have a NWQA CWD-V certification and that all staff members involved in the actual construction, installation and maintenance of the filter systems are NWQA certified installers. Please note the calendar of events for deadlines. (Emphasis Supplied.) Global did not have NWQA level V certified installers, and therefore, could not qualify under this provision. However, they did have Class I plumber's licenses, the highest designation in North Carolina, the company's headquarters. James Tate, Global's Vice President, testified that a Class I plumber's license is the same as a master plumber in Florida. The Department's contract manager approved and issued an addendum which constituted an amended bid specification on November 20, 1986, to permit a Class I plumber's license or equivalent, as follows: All vendors must provide in writing from the National Water Quality Association proof that all management personnel involved in the development of the bid and in the completion of the contract (if vendor is awarded bid) have a NWQA CWD-V certification or a class one plumber's license or equivalent and that all staff members involved in the actual construction, installation and maintenance of the filter systems are NWQA certified installers. Please note the calendar of events for deadlines. (Emphasis Supplied.) On December 3, 1986, Folks determined that Global was qualified to bid. Global submitted its bid on DOF-ADM-29 in a timely manner, and upon opening of all bids on December 15, 1986, was determined to be the lowest qualified bidder. Global was informed on December 15, 1986, that it was the winning bidder. However, on December 19, 1986, the Department posted its tabulation on bid DOF-ADM-29 which rejected all bids "due to ambiguities in specifications and prequalifying requirements." The specific reason for this rejection was that upon review of the addendum by the Department's General Counsel at the time, Robert Chastain, it was determined that the addendum was vague and ambiguous. Specifically, Chastain and Folks concluded that the reference to Class I plumber's license was ambiguous since such a designation does not exist in Florida, and it was unclear whether such licensure in another state would allow a plumber to work in the four Florida counties affected by this bid. This ambiguity in the addendum had been brought to the Department's attention by a competing bidder, Continental Water Systems, Inc., after bids had been opened on December 15, 1986, through a threatened bid protest. In rejecting all bids, the Department was attempting to avoid a protest either by Continental, if the award was made to Global, or by Global, if the award was made to Continental. The Department was reasonably concerned with the creation of a health emergency if the purchase of EDB filters was delayed through the filing of a bid protest. It sought to avoid any such delay by rejecting all bids and rebidding this contract as DOF-ADM-41 which contained the following redrafted specification: All vendors must provide in writing proof that all management personnel involved in the development of the bid and in the completion of the contract (if vendor is awarded bid) have a National Water Quality Association (NWQA) CWD-V certification or are a certified master plumber in the State of Florida and that all staff members involved in the actual construction, installation and maintenance of the filter systems are NWQA certified installers or are a certified plumber in accordance with county regulations and requirements in the State of Florida. (Emphasis Supplied.) The redraft of the prequalification specification in DOF-ADM-41 corrected the ambiguities created by the November 20, 1986, addendum to DOF-ADM- 29, as to both management and staff. Global's notice of protest of the Department's decision to reject all bids was timely filed on December 23, 1986, as acknowledged-by the Department's then General Counsel, pursuant to Rule 13A-1.006(3), Florida Administrative Code, which is presumed valid. On January 23, 1987, the Commissioner of Agriculture issued a Declaration of Emergency in order to be able to proceed with the rebid, DOF-ADM- 41, despite Global's protest of the rejection of all bids in DOF-ADM-29. This Declaration of Emergency was upheld in Global Water Conditioning v. Department of Agriculture, 521 So.2d 126 (Fla. 1st DCA 1987). The contract in DOF-ADM-41 was awarded in February, 1987, to Continental. The contract for the installation and exchange of EDB water filters is an on going project, and, with the exception of the prequalification changes referenced above, the specifications for bids D0F-ADM-13, 29 and 41 were essentially the same.
Recommendation Based on the foregoing, it is recommended that the Department enter a Final Order dismissing Global's protest to the rejection of all bids in DOF-ADM-29. DONE AND ENTERED this 26th day of July, 1989, in Tallahassee, Leon County, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of July, 1989. APPENDIX TO RECOMMENDED ORDER, CASE NO. 89-2642 BID Rulings on Global's Proposed Findings of Fact: This is not a proposed finding of fact, but a restatement of the issue in this case. Adopted in Finding of Fact 1. Adopted in Finding of Fact 2. Adopted in Finding of Fact 4. Adopted in Finding of Fact 3. 6-7. Adopted in Findings of Fact 4 and 5. Adopted in Finding of Fact 6. Rejected as irrelevant to the issue of whether the Department acted arbitrarily in rejecting all bids due to vagueness of the specifications. 10-16. Adopted in Findings of Fact 7 and 8. Rejected in Findings of Fact 8, 9, and 10. Rejected as cumulative. Adopted in Finding of Fact 13. Adopted in Finding of Fact 11. 21-22. Adopted in Finding of Fact 12. 23-26. Rejected as not based on competent substantial evidence in the record, and as irrelevant. Rulings on the Department's Proposed Findings of Fact: 1-2. Adopted in Finding of Fact 2. 3-4. Adopted in Finding of Fact 3. Adopted in Finding of Fact 4. Rejected as cumulative. Adopted in. Finding of Fact 5. Adopted in Finding of Fact 6. 9-12. Adopted in Findings of Fact 7 and 8. 13-17. Adopted in Finding of Fact 9. Adopted in Finding of Fact 8. Adopted in Finding of Fact 11. 20-23. Adopted in Findings of Fact 9 and 10. 24-26. Rejected as irrelevant to the issue of whether the Department acted arbitrarily or capriciously in rejecting all bids due to ambiguities in the specifications. 27-28. Adopted in Finding of Fact 12. 29. Rejected as not based on competent substantial evidence, and as irrelevant. COPIES FURNISHED: James C. Barth, Esquire 433 North Magnolia Drive Tallahassee, Florida 32308 Honorable Doyle Conner Commissioner of Agriculture The Capitol Tallahassee, Florida 32399-0810 Mallory E. Horne, General Counsel Clinton H. Coulter, Esquire Mayo Building, Room 515 Tallahassee, Florida 32399-0800
Findings Of Fact Petitioner, J. D. Pirrotta Company (JDP), is a general contracting company located in Orlando, Florida. JDP has bid on projects involving construction of schools or educational facilities, including projects for Valencia Community College. Respondent, District Board of Trustees of Valencia Community College, is the governing body of the community college, with the authority to award contracts. Valencia Community College (VCC), in Bid #90/91-06, advertised for sealed bids for interior remodeling and renovation of existing buildings' modules 3 and 5, on its west campus on South Kirkman Road, in Orlando, Florida. The sealed bids were due at or before 2:30 p.m., on December 13, 1990, in the purchasing department of VCC, 190 South Orlando Avenue, Suite 402B, Orlando, Florida 32801. The Invitation to Bid includes a voluminous project manual containing instructions to bidders, various forms, a standard contract text and detailed specifications. A separate bid packet contains the set of drawings for the construction work. The advertisement of the Invitation to Bid, and Section 00100 of the Project Manual, Instructions to Bidders, paragraph 14A, reserve for the owner the right to reject any or all bids and to waive any and all "informalities". (Respondent's Exhibits #1 and #2) Section 00100, Instructions to Bidders, paragraph 18, provides: 18. SUBCONTRACTORS, ETC. The bidders at bid date shall submit to Owner a list of all subcontractors and other persons and organizations (including those who are to furnish the principal items of material and equipment) proposed for those portions of the work as to which such identification is so required. Such list shall be accompanied by an experience statement with pertinent information as to similar projects and other evidence of qualifications for each such subcontractor, person and organization if requested by Owner. If Owner, after due investigation has reasonable objection of any proposed subcontractor, other person or organization either may, before giving the Notice of Award, request the apparent successful bidder to submit an acceptable substitute without an increase in bid price. If the apparent successful bidder declines to make any such substitution, the contract shall not be awarded to such bidder, but his declining to make any such substitution will not constitute grounds for sacrificing his bid security. A subcontractor, other person or organization so listed and to whom Owner does not make written objection prior to the giving of the Notice of Award, will deemed acceptable to Owner. Should the subcontractors list be revised, for any reason, architect and Owner shall be immediately notified. (Respondent's Exhibit #2) Paragraph 9, Section 00300, the bid form, provides: The following documents are attached to and made a condition of the Bid: Required Bid Security in the form of a Bid Bond. A tabulation of subcontractors and other persons and organizations required to be identified in this Bid. Required Bidders Qualification Statement with supporting data. (Respondent's Exhibit #2) Section 00700, the Public Entity Crimes statement form, includes these instructions: Any person responding with an offer to this invitation must execute the enclosed Form PUR 7068, SWORN STATEMENT UNDER SECTION 287.133(3) (a), FLORIDA STATUTES, ON PUBLIC ENTITY CRIMES and enclose it with your bid. If you are submitting a bid on behalf of dealers or suppliers who will ship and receive payment from the resulting contract, it is your responsibility to see that copy/copies of the form are executed by them and are included with your bid. Failure to comply with this condition shall result in rejection of your bid. (Respondent's Exhibit #2) The Instructions to Bidders and the drawings include a total of ten deductive alternatives to be addressed in the bids, to afford VCC some flexibility in the event the base bid might be higher than the agency's available funds. In response to the advertisement and request for sealed bids, VCC received bids from the following seven contractors: Seacoast Constructors and Consultants; JDP; Southland Construction, Inc.; Harbco, Inc.; Technical Design Systems, Inc.; Hembree Construction, Inc.; and Waltree Construction, Inc. The bids were opened publicly and read aloud beginning shortly after the submittal deadline on December 13, 1990. Jack C. Crawford, Vice-President for Administrative Services, and Stephen Richard Childress, Purchasing Manager, participated in the bid opening on behalf of VCC. Seacoast Constructors was the lowest bidder, at $1,274,000.00, base bid; JDP was the second lowest bidder, at $1,297,000.00, base bid. None of the bidders submitted bids containing all of the requested or required information. None of the bidders included a deduct alternative requested by Drawing E-10, General Notes number 2. Only JDP included the deduct alternative requested by Drawing E-6, General Notes number 2. Seacoast Constructors and Consultants failed to include Form PUR 7068, Public Entity Crimes statement, with their bid, but it executed and submitted the form to VCC on December 13th, the date of the opening. Two of the bidders, JDP and Harbco, failed to submit subcontractor lists with their bids. At the time of hearing, JDP had still not submitted its list. For this project the low base bid is within VCC's available funds, and it does not intend to rely on any of the deduct alternatives in the bids. Following the bid opening, the bid tabulation form was posted on a bulletin board in the administration building. A copy of the tabulation form was also placed in a folder which includes recommendations on other bids and which is maintained at the desk of the security guard outside the room where the bids are opened. Inside the front cover of the folder, in the bottom left hand corner, is a small typewritten statement: Failure to file a protest within the time described in S. 120.53(5), Florida Statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. There is no evidence of any other notice of section 120.53, F.S. remedies to bidders, including in the advertisement or in instructions to bidders. JDP filed a written bid protest in a letter dated December 13, 1990 and received on December 14, 1990. The letter clearly states that it is a formal protest, pursuant to Section 120.53(5), F.S. It argues that bids submitted by Seacoast Constructors and others were unresponsive and should be rejected for failure to include the Public Entity Crimes Statement, for failure to bid on a deduct alternative, and for other reasons (immaterial, because they apply to higher bidders). The protest letter requested award to JDP. JDP met with representatives of VCC to attempt to resolve the protest. At the meeting, Joseph Pirrotta was informed that his bid was considered nonresponsive because it failed to include a subcontractors' list. The meeting did not resolve the matter, and on December 19, 1990, Joseph Pirrotta sent a follow-up letter arguing that the text of the bid instructions only require a subcontractors' list for "...portions of the work as to which such identification is so required", and nowhere in the bid packet was any reference to which were required. JDP considered that the subcontractors' list was, therefore, unnecessary. The December 19th letter also reiterated JDP's request to reject the other bids and to award the contract to JDP. The December 13th and 19th letters are the only written protests by JDP. VCC has previously awarded contracts to bidders who failed to submit a Public Entity Crimes Statement with their bid. It considers such failure an "informality" subject to waiver. It considers failure to submit a list of subcontractors an economic advantage with respect to other bidders. Representatives of VCC have recommended to its board that the contract be awarded to Seacoast Constructors, the lowest bidder.
Recommendation Based on the foregoing, it is hereby, RECOMMENDED That the District Board of Trustees of Valencia Community College enter its final order awarding the contract in Bid #90/91-06 to Seacoast Constructors and Consultant, and rejecting the protest of J.D. Pirrotta Company. DONE AND RECOMMENDED this 25th day of February, 1991, in Tallahassee, Leon County, Florida. MARY CLARK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of February, 1991. COPIES FURNISHED: Leslie King O'Neal, Esquire P.O. Drawer 1991 Orlando, FL 32802 Jeffrey S. Craigmile, Esquire Brian P. Kirwan, Esquire 390 N. Orange Ave., Ste. 2180 Orlando, FL 32801 Jack C. Crawford Vice President Administrative Services Valencia Community College P.O. Box 3028 Orlando, FL 32802
Findings Of Fact Based upon the documentary evidence received and the entire record compiled herein, I hereby note the following findings of fact: Notice and Invitation to Bid on State Project Number 72001-3448 (the project) was extended to various contractors by the Respondent, Department of Transportation, on August 1, 1985. Sealed bids on the project were opened August 28, 1985. The scope of the project involved cleaning and painting the structural steel of the Buckman Bridge over the St. Johns River in Jacksonville, Florida. (State Bridge Numbers 720249 and 720343). The bids were opened and Petitioner was the apparent low bidder on the project with a bid amount of $193,000. The Department of Transportation, on October 2, 1985, rejected all bids "due to error in quantities in plans." According to the contract plans and specifications utilized by the Department of Transportation for the project, the beams, girders, bracing and trusses were composed of 2,540 tons of structural steel. The plans were in error and the tonnage of structural steel was less than 2,540 tons. Petitioner, upon visiting the job site as required, immediately recognized that there was less steel in the bridge than shown in the plans. In submitting and formulating his bid, the Petitioner considered the amount of work and materials which would actually be required to complete the project. 6 Prior to the bids being posted on the project, the Department of Transportation discovered that the amount of structural steel noted in the plans was grossly overestimated. On October 2, 1985, the Department of Transportation notified bidders in writing that all bids submitted on the project were rejected and that the plans would be revised and the project relet.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is, RECOMMENDED that the petition of Industrial Enterprise Sandblast and Painting, Inc., protesting the rejection of all bids on State Project No. 72001- 3448, be dismissed. DONE AND ORDERED this 11th day of December 1985 in Tallahassee, Florida. W. MATTHEW STEVENSON 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 December 1985. APPENDIX Respondent's Findings of Fact FINDING RULING Accepted; see Recommended Order paragraph 1. Accepted; see Recommended Order paragraph 2. Accepted, but not included because subordinate. Accepted; see Recommended Order paragraph 4. Accepted; see Recommended Order paragraphs 3 and 6. Accepted; see Recommended Order paragraphs 3 and 6. Accepted; see Recommended Order paragraph 6. COPIES FURNISHED: HONORABLE THOMAS E. DRAWDY, SECRETARY DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING TALLAHASSEE, FLORIDA 32301 A. J. SPALLA, ESQUIRE GENERAL COUNSEL DEPARTMENT OF TRANSPORTATION 562 HAYDON BURNS BUILDING TALLAHASSEE, FLORIDA 32301 LARRY D. SCOTT, ESQUIRE DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING, M.S. 58 TALLAHASSEE, FLORIDA 32301-8064 INDUSTRIAL ENTERPRISE SANDBLAST & PAINTING, INC. P. O. BOX 1547 1502 FOX RUN DRIVE TARPON SPRINGS, FLORIDA 32486-1547
The Issue The issue is whether the Department of Transportation’s proposed award of the contract for FIN Project Nos. 25840115201, 25840115602, and 25841005603 to Intervenor is contrary to the Department’s governing statutes, rules, policies, or the bid solicitation specifications.
Findings Of Fact Based upon the testimony and evidence received at the hearing and the stipulations set forth in the parties' Pre-Hearing Stipulation, the following findings are made: Parties The Department is the state agency responsible for construction and maintenance of the State highway system, which includes Interstate 4. The Department is the contracting agency for the Project at issue in this proceeding. Petitioner and Intervenor are corporations engaged in the business of road and bridge construction, and they both submitted bids for the Project. Intervenor was determined by the Department to be the lowest responsible bidder for the Project, and Petitioner was determined to be the next lowest responsible bidder. Petitioner and Intervenor both have the requisite standing in this proceeding. Overview of the Project The Project involves the widening and "reconstruction" of approximately three miles of Interstate 4 in Hillsborough County between 14th Street and 50th Street. The Project is located in the Department's District Seven. The Department's initial cost estimate for the Project was $148.5 million, making this the most expensive project ever in District Seven. The Project is being funded primarily by federal funds from the U.S. Department of Transportation, Federal Highway Administration (FHWA). The high per-mile cost of the Project is a result of the complexity of the Project due to its location in an urban environment and the numerous bridges included in the Project. Bid Documents The Department issued a Bid Solicitation Notice (Notice) for the Project on February 28, 2003. The Notice provided a general description of the Project and informed prospective bidders how they could obtain the plans and specifications for the Project. The Notice also included a list of the pay items for the Project. That list included "approx[imate]" quantities for each item, and was "not for bidding purposes." The plans and specifications for the Project included a Summary of Pay Items, sheets 2 through 16D (Summary), which listed the pay items for the Project, as well as the estimated quantity for each item. More than 400 pay items were listed in the Summary, including Item No. 2534-72-12, Barrier Wall Noise (the "noise wall"). The noise wall is an aesthetic feature. Its purpose is to reduce the amount of roadway noise that can be heard on adjacent property. The noise wall is free-standing and is not structurally connected to the roadway or other aspects of the Project. It is possible that the noise wall may be deleted from the Project during construction. However, bidders were required to bid on the noise wall since it is shown in the plans and is listed as a pay item in the Summary and on the proposal form. The estimated quantity for the noise wall provided in the Summary is 1,453 meters squared (m2), which is the same as the "approx[imate]" quantity that was shown in the Notice. That same figure--1,453 m2--is provided for the noise wall on the proposal form. The proposal form is commonly referred to as the "bid blank." The bid blank was provided to the prospective bidders in electronic format. It lists each pay item for the Project, and for each item, it specifies the item number, item description, and estimated quantity. The bidders were required to insert their bid or unit price for each pay item directly into the electronic bid blank form. The bidders could not change the estimated quantities shown on the bid blank. If a bidder attempted to do so, its bid would have been rejected as nonresponsive. Once the bid/unit prices are inserted into the electronic bid blank form, the bid amount is automatically calculated for each pay item by multiplying the estimated quantity shown on the form by the bidder's bid/unit price. The bidder's total bid is then automatically calculated by adding up the bid amounts for each pay item. The bid documents1 incorporated by reference the 2000 edition of the Department's Standard Specifications for Road and Bridge Construction (Standard Specifications). Section 2-3 of the Standard Specifications, entitled "Interpretation of Estimated Quantities," explains the purpose and significance of the estimated quantities set forth in the bid documents. That provision states: For those items constructed within authorized plan limits or dimensions, use the quantities shown in the plans and in the proposal form as the basis of the bid. The Department will also use these quantities for final payment as limited by the provisions for the individual items. For those items having variable final pay quantities that are dependent upon actual field conditions, use and measurement, the quantities shown in the plans and in the proposal form are approximate and provide only a basis for calculating the bid upon which the Department will award the Contract. . . . The Department may increase, decrease, or omit the estimated quantities of work to be done or to be furnished. The estimated quantities shown in the bid documents are not necessarily the actual quantities that will be built on the Project. It is important, however, that the estimated quantities be as accurate as possible so that the Department can develop a reasonably accurate cost estimate for budgeting purposes and so that contractors can have a good idea of the resources that they will need to devote to construction when they are formulating their bids. Section 3-1 of the Standard Specifications, entitled "Consideration of Bids," informed bidders how the Department would determine the lowest bid for the Project. That provision states that: [F]or purposes of award, after opening and reading the proposals, the Department will consider as the bid the correct summation of each unit bid price multiplied by the estimated quantities shown in the proposal form. The "proposal form" referenced in Section 3-1 of the Standard Specifications is the official form on which the Department requires formal bids to be prepared and submitted. It is the same as the "bid blank" described above. Pre-bid Phase Petitioner ordered the plans and specifications for the Project on March 3, 2003. The Department sent the plans and specifications to Petitioner on March 4, 2003. Petitioner received the plans and specifications approximately two weeks prior to the mandatory bidders' meeting/"pre-bid conference" held on March 31, 2003. The pre-bid conference was attended by two of Petitioner's employees. Neither of those employees asked questions regarding the estimated quantity for the noise wall, although they each asked questions regarding other elements of the Project. The Transcript of the pre-bid conference reflects that no other bidder asked about the estimated quantity for the noise wall either, even though the noise wall was mentioned on several occasions at the conference, and a question was asked about the quantity shown for another item listed in the specifications. At some point after the pre-bid conference, Petitioner's senior estimator, Jeffrey Wittmann, calculated "take-offs" for all of the walls in the Project, including the noise wall. This is a standard practice done in the course of putting together a bid. The purpose of a take-off is to verify the accuracy of the estimated quantities in the bid documents and to calculate the work and materials that will be required to perform the contract. A take-off converts the graphical information shown in the plans for an item to a numerical amount for that item, and is done by using the plans and specifications for the Project and the Department's standard computation manual. The take-off calculated by Mr. Wittmann for the noise wall was 3,809 m2, which is more than two-and-a-half times the estimated quantity of 1,453 m2 shown in the bid documents. The Department's contact person for the Project was Teresa Driskell. Ms. Driskell began receiving questions about the accuracy of the estimated quantity for the noise wall in late March or early April. The first question regarding that issue came from Intervenor. Intervenor questioned the estimated quantity shown for the noise wall in the Summary and the bid blank because its take-off showed the estimated quantity to be significantly more than 1,453 m2. Ms. Driskell referred Intervenor's question to Robert Szatynski, the Department's outside consultant and engineer of record for the Project, and asked him to formulate a response. Mr. Szatynski directed a member of his staff to review the computations and spreadsheets from which the estimated quantity for the noise wall was originally computed. Based upon the results of his staff's review, Mr. Szatynski responded to Ms. Driskell that the 1,453 m2 figure was correct. Ms. Driskell forwarded that response to Intervenor, but not to other prospective bidders. Ms. Driskell followed a similar pattern with respect to other inquiries; she provided the response only to the prospective bidder who made the inquiry. Ms. Driskell continued to get questions from other prospective bidders, including Petitioner through Mr. Wittmann, regarding the accuracy of the estimated quantity for the noise wall. On Friday, April 18, 2003, Ms. Driskell asked Richard Frank, the Department's in-house construction manager for the Project, to take a look at the questions being raised by the prospective bidders regarding the estimated quantity for the noise wall. Mr. Frank calculated his own take-off for the noise wall, which only took him about an hour. Mr. Frank's take-off calculated an estimated quantity for the noise wall of 3,853 m2, which is very similar to Mr. Wittmann's calculation. Based upon his take-off, Mr. Frank sent an e-mail to Ms. Driskell which stated that he "agree[d] with the concerns that have been raised that the quantity [for the noise wall] is in error" and that Ms. Driskell could "let the contractors know that they are correct." Mr. Frank's e-mail was sent to Ms. Driskell at approximately 4:30 p.m. on April 18, 2003. A copy of the e-mail was sent to Mr. Szatynski at the same time. On the morning of Monday, April 21, 2003, Mr. Szatynski sent an e-mail to Ms. Driskell concurring in Mr. Frank's assessment. That e-mail stated that: [W]e agree with [Mr. Frank] that the original quantity shown in the plans is inaccurate. The final quantity for [the noise wall] should be 3893.9 m2. We will send the updated quantity calculation sheet for your use. Later that same day, Mr. Szatynski sent Ms. Driskell a revised area computation sheet for the noise wall. The sheet specified a new quantity for the wall of 3,894 m2. The spreadsheet used by Mr. Szatynski's staff to calculate the original estimated quantity for the noise wall had a mathematical error in it. The heights and lengths for the noise wall in the spreadsheet that were derived from a take-off of the plans were correct, but the formula underlying the spreadsheet failed to multiply those dimensions by the number of panels needed for the noise wall. The error in the spreadsheet was not known to or found by Mr. Szatynski or his staff when they reviewed the noise wall quantity estimate in response to Ms. Driskell's first request described above. In recalculating the area of the noise wall, Mr. Szatynski did not change any of the wall's dimensions in the plans or any of the figures in his original take-off. He simply corrected the formula underlying in the spreadsheet to include the number of panels needed in the calculation. Even though the Department knew that the estimated quantity for the noise wall in the bid documents was "inaccurate" and "in error," and even though it had been given the corrected "final quantity" from Mr. Szatynski on April 21, 2003, the Department did not issue an addendum to change the estimated quantity. Addenda are issued by the Department's Tallahassee office upon the request of the District office. The "turn-around time" for an addenda varies based on nature and extent of the change. No changes to the plans were necessary to correct the erroneous estimated quantity for the noise wall, and Mr. Szatynski had already provided a corrected area computation sheet. The only other thing that would have been necessary to correct the noise wall quantity was a revised electronic bid blank and revised Summary page. According to Juanita Moore, the Department's contract administrator in Tallahassee for the Project, it would have only taken "a few hours" to do an addendum to change the estimated quantity for the noise wall under such circumstances. The decision not to issue an addendum to correct the estimated quantity for the noise wall was made by Ms. Driskell alone. She based her decision on a number of factors, including the fact that the noise wall was a stand-alone item that was not structurally related to the remainder of the Project and that it might be deleted from the Project; the fact that the noise wall was not a "major item of work;"2 her estimate that the projected cost overrun would be less than $1,000,000, which is less than one percent of the total contract price; and her concern that the plans would need to be revised or that it would take too long to get an addendum approved. In hindsight, Ms. Driskell clearly made the wrong decision by not changing the estimated quantity for the noise wall because her concerns about the time it would take for an addendum and need for revisions to the plans were unfounded, she underestimated cost overrun that the error would cause by approximately $500,000, and it turned out that the ultimate award of the contract hinges on that pay item. Nevertheless, Ms. Driskell's decision not to seek an addendum to correct the estimated quantity for the noise wall was not arbitrary or illogical at the time that it was made. The Department issued five formal addenda to the Project specifications. The addenda were issued on March 17, 2003 (Addendum No. 1); April 7, 2003 (Addendum No. 2); April 17, 2003 (Addendum No. 3); April 22, 2003 (Addendum No. 4); and April 29, 2003 (Addendum No. 5). The addenda were sent by overnight delivery to the prospective bidders, and they contained instructions on how to download the updated electronic bid blank form from the Internet. Addenda Nos. 4 and 5 were issued after April 21, 2003, which is the date that the Department received confirmation from Mr. Szatynski that the noise wall quantity estimate in the bid documents was "inaccurate" and that the correct "final quantity" was 3,894 m2. However, Addendum No. 4 was in the review process prior to that date. Addendum No. 4 changed the estimated quantities for several pay items, including an eight-foot traffic railing barrier wall (Item No. 2521-7-1), which Mr. Wittmann had discussed with Ms. Driskell in connection with their discussions regarding the noise wall. The change added approximately 1,100 meters to that pay item. Using the unit prices bid for that item by Petitioner and Intervenor, the financial impact of the change in the quantity for the barrier wall item was between $500,000 and $790,000. That amount is less than the financial impact of the "error" in the estimated quantity for the noise wall. On the afternoon of Friday, April 25, 2003, Mr. Wittmann e-mailed Ms. Driskell and asked "[w]hy [there was] no change to the [noise wall] in addendum 4 as previously discussed." Ms. Driskell did not respond to Mr. Wittmann's e-mail, although as discussed below, she answered his question in a telephone conversation on Monday, April 28, 2003. Addendum No. 5 was issued the day before the bid submittal deadline. It changed the estimated quantity for Item No. 2102-911-2 to correct an obvious scrivener's error. At some point during the pre-bid phase, a bidder other than Petitioner or Intervenor made a public records request for all of the Department's responses to the questions asked by prospective bidders. Ms. Driskell's supervisor directed her to provide the information responsive to the public records request to all of the prospective bidders. That information was not provided to the prospective bidders in the form of an addendum; it was just "made available to them" at the District Seven office on April 29, 2003. Included in that information were Mr. Frank's e-mail stating that the estimated quantity for the noise wall was "in error" and Mr. Szatynski's e-mail concurring in that assessment and providing a "final quantity" of 3,894 m2. Ms. Driskell called each of the prospective bidders on April 28, 2003, to inform them that the package of information could be picked up on April 29, 2003. During her conversation with Mr. Wittmann, Ms. Driskell was again asked why the estimated quantity for the noise wall had not been changed. She told Mr. Wittmann that it was "too close to the letting" and that "it would not be changed." Ms. Driskell's response to Mr. Wittmann is somewhat disingenuous because she had the necessary information since April 21, 2003, to make a change in the noise wall quantity through an addendum, and it would have taken only "a few hours" to do so. Indeed, on April 21, 2003, Ms. Driskell's supervisor, Brian McKishnie, told Ms. Driskell that she "need[ed] to tell them [the bidders] to 'bid it [the noise wall] as you see it' or get the corrected quantity to all bidders." Although there is conflicting evidence regarding what Ms. Driskell told Mr. Wittmann on and around April 21, 2003, regarding the discrepancy in the estimated quantity for the noise wall and the Department's intent to issue an addenda to change the quantity, it is ultimately immaterial what Mr. Wittmann was told at that time because on April 28, 2003, Ms. Driskell clearly and unequivocally told Mr. Wittmann that no change was going to be made to the noise wall. Thus, on April 28, 2003, Petitioner was on notice that the estimated quantity for the noise wall was going to remain 1,453 m2, and Petitioner prepared its bid based upon that figure. Petitioner did not file a specification protest within 72 hours after Ms. Driskell informed Mr. Wittmann that the estimated quantity for the noise wall was not going to be changed. Petitioner did not pick up the package of information which included the e-mails from Mr. Frank and Mr. Szatynski related to the corrected noise wall quantity until May 12, 2003, which is nearly two weeks after it had submitted its bid. Thus, Petitioner could not have relied on the information in those e-mails in preparing its bid. On April 30, 2003, Petitioner, Intervenor, and several other bidders timely submitted their bids for the Project. Neither Petitioner, nor any other prospective bidder, filed a solicitation protest within 72 hours after the Notice was issued. Neither Petitioner, nor any other prospective bidder, filed a solicitation protest within 72 hours after they received the plans and specifications for the Project. Neither Petitioner, nor any other prospective bidder, filed a specification protest based upon the matters included in (or omitted from) any of the addenda within 72 hours after their issuance. Department's Review of the Bids The bids submitted by Petitioner and Intervenor were both determined to be responsive. Intervenor's bid of $149,898,506.15 was the lowest bid. Petitioner's bid of $149,959,420.22 was the next lowest bid. It was approximately $61,000 (or 0.041 percent) more than Intervenor's bid. The Department has a policy--Section 3.3 of Policy No. 600-010-001-d (effective February 14, 2001)--which requires that before an award can be made based upon the apparent low bid, the bid must be reviewed to ensure that it is not "materially unbalanced." FHWA policy is in accord. The primary purpose of this review is to determine whether there is a quantity error in the bid documents that the apparent low bidder is exploiting to the State's detriment or to the detriment of the competitive bidding process. There are two types of unbalanced bids, a mathematically unbalanced bid and a materially unbalanced bid. As described by the FHWA policy, which is in accord with the Department's policy and the testimony of the Department witnesses at the hearing, mathematically unbalanced bid is structured on the basis of a nominal price submitted for some work and inflated prices for other work. There is no prohibition against a contractor submitting a mathematically unbalanced bid. A material unbalanced bid, however, exists if there is a reasonable doubt that the award to the bidder submitting the mathematically unbalanced bid will result in the lowest ultimate cost to the Government or have a detrimental effect on the competitive bid process. A materially unbalanced bid is unacceptable. The Department's unbalanced bid review is a two-step process. The first step is to determine whether the bid is mathematically unbalanced. The second step is to determine whether a mathematically unbalanced bid is materially unbalanced. The Department utilizes a computer program in the first step of the process to determine whether a bid is mathematically unbalanced. The computer compares the unit cost bid for each item to a pre-determined estimated price for that item. The computer "flags" any items for which the bid price is materially different from the estimated price. If any items are flagged, the bid is considered to be mathematically unbalanced. Then, in the second step of the process, a Department estimator compares the quantity for the flagged unit item(s) in the bid documents with the "correct" quantity for the item(s) based upon a take-off from the plans. Based upon that comparison, the estimator determines whether the mathematical unbalance will result in a material cost overrun, a change in the low bidder, or otherwise be contrary to competition. If so, the bid is deemed to be materially unbalanced; otherwise, the bid is accepted. This process is more formally described in Department Policy No. 600-010-001-d as follows: Post-letting Procedures * * * [A]s soon as the Bid verses Estimate (SAS) Report has been generated, a list of mathematically unbalanced bid items is sent to the District Design Project Manager (Central Office only). They review the computation book and check the quantities of items for possible overruns and/or underruns. If the quantity is found to be in error, the Project Manager calculates the correct quantity and faxes the list back to the estimator. The estimator then calculates the effects of the overrun/underruns by multiplying each contractor's unit bid by the overrun amount. The overrun amount is added back to each contractor's total bid. If there is an underrun, the amount is subtracted from each contractor's total bid. If this adjustment causes the low bidder's total to become larger than another contractor's total, a switch in low bidders have [sic] occurred, which is a materially unbalanced bid. The project must not be awarded to the original low bidder. The lowest adjusted bid will then be considered the low bidder and award will be made accordingly. As soon as the bids have been loaded into the system by the Contracts Administration Offices, the low bid verses estimate (SAS) report can then be generated (Central Office only). This is followed by the Unbalanced Bid Item report. The Unbalanced Bid Item program utilizes a bell curve distribution that develops a statistical average unit price (Average 2). The program then establishes a range of acceptable prices to which the contractor's prices are compared. If this comparison is above or below a defined window (range), it is flagged by the program. This flag basically means to check the quantity on the mathematical unbalanced bid items for possible quantity overruns and/or underruns. The flag could also indicate the pay item was not needed when a contractor bids a small unit price on an item. . . . (Emphasis in original.) The computer program flagged four items which were mathematically unbalanced in Intervenor's bid. After review, none of those items resulted in Intervenor's bid being declared materially unbalanced. The computer program did not flag the noise wall item as being mathematically unbalanced. That means that the $600 per m2 bid by Intervenor for the noise wall was not materially different from the estimated cost for that item. Because the noise wall item was not flagged, the Department was not required (or allowed) under the policy quoted above to proceed to the next step to determine whether there was any material unbalance on that item. Had the noise wall item been flagged as being mathematically unbalanced, the Department would have used the "final quantity" from Mr. Szatynski's April 21, 2003, e-mail in evaluating whether Intervenor's bid was materially unbalanced. That evaluation would have resulted in Intervenor's bid no longer being the lowest bid, and under Section 3.3(d) of Department Policy No. 600-010-001-d (and the FHWA policy), the contract for the Project would not have been awarded to Intervenor. Instead, the contract would have been awarded to Petitioner if its bid "passed" the unbalanced review. If the Department used the 3,894 m2 estimated quantity for the noise wall instead of the 1,453 m2, Petitioner's bid amount would be $151,301,970.22 and Intervenor's bid amount would be $151,363,106.15.3 As a result, Petitioner would become the lowest bidder by approximately $61,000. Petitioner informed the Department of these figures on May 20, 2003. Thus, at the time that the Department issued the notice of intent to award the contract to Intervenor, it was not only aware of the "correct" estimated quantity for the noise wall, but it was also aware that Intervenor would not be the lowest bidder if the "correct" quantity were used. The Project has a built-in cost overrun of approximately $1.5 million (i.e., the difference between Intervenor's bid based upon the 1,453 m2 estimate and its "corrected" bid based upon the 3,894 m2 estimate) because under Section 2-3 of the Standard Specifications, payment for the noise wall will be based upon the size of the wall that is actually built and because the 3,894 m2 more accurately reflects the size of the wall than does the original 1,453 m2 estimate. Proposed Award to Intervenor and Petitioner's Protest On May 22, 2003, the Department posted notice of its intent to award the contract for the Project to Intervenor. Petitioner's Protest was timely filed in relation to that notice.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Transportation issue a final order which denies the formal written protest filed by Petitioner and awards the contract for the Project to Intervenor. DONE AND ENTERED this 25th day of August, 2003, in Tallahassee, Leon County, Florida. S T. KENT WETHERELL, II Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of August, 2003.
Findings Of Fact During March 1988, the Respondent issued an Invitation to Bid by which it sought to lease 17,973 net usable square feet of office space to be located within a specified geographic area in Tampa, Florida, under a nine year lease with two additional three year option periods. This Invitation to Bid is referred to as Lease Number 590:1927. Three bids were received in response to the Invitation to Bid, and they were opened on May 13, 1988. Bids were received from the Petitioner, 8900 Centre, Ltd., and the Allen Morris Management Company. All bidders were determined to be responsive to the Invitation to Bid. Despite the fact that petitioner submitted the lowest bid, Respondent notified Petitioner by letter dated June 10, 1988, of its intent to award Lease Number 590:1927 to 8900 Centre, Ltd., as the lowest and best bidder. Petitioner has timely filed its protest seeking review of that decision. It is undisputed that Petitioner submitted the lowest bid. For the first year of the lease, Petitioner bid $7.85 per square foot, while 8900 Centre bid $7.95 per square foot. Thereafter, Petitioner proposed a yearly increase of 50 cents per square foot, reaching $11.85 per square foot in the ninth year of the lease, while 8900 Centre proposed annual increases of approximately 75 cents, reaching $14.00 per square foot in the ninth year. This equates to an actual dollar difference over the nine year term of approximately 185,000. However, using a present value methodology and a present value discount rate of 8.81 percent referred to on page 17 of the bid submittal form, the present value difference in these two bids is approximately $1,000 per month, which would result in a present value difference between Petitioner and 8900 Centre of approximately $108,000 over the nine year period. Neither the Invitation to Bid, bid specifications, nor the actual bids were offered into evidence. One page of the bid submittal form, designated as page 17 of 18, was offered and received in evidence. This portion of the bid submittal form states that the "successful bid will be that one determined to be the lowest and best." It also sets forth evaluation criteria, and assigns weights to each criteria. The evaluation criteria include associated fiscal costs (35 points), location (40 points) and facility factors (25 points) . A synopsis of bids was also offered and received in evidence showing the points awarded to each bidder by the Respondent's bid evaluation committed. Out of a possible 100 points, 8900 Centre received 95.17 points, while Petitioner received 82.25 points and the Allen Morris Management Company received 70.67 points. Petitioner asserts that the members of the evaluation committee were not qualified or knowledgeable in basic construction, design and engineering principles, and therefore could not competently evaluate the bids submitted. However, Petitioner did not offer competent substantial evidence to support this contention. Only the chairperson of the committee, Susan Jennings, was called to testify, and she appeared thoroughly knowledgeable in the bid process, the needs of the agency, the bid requirements and the representations made to the committee members by each bidder, including Petitioner, when the committee made its site visit to each location. Since the actual Invitation to Bid, bid specifications, and evidence about the other committee members were not introduced, it is not possible to know what the specific duties of the committee were, how they were to carry out their duties their qualifications and training, and whether they failed to competently carry out these duties, as alleged by Petitioner. Despite Petitioner's lower bid, Respondent awarded this lease to 8900 Centre, Ltd., based upon the evaluation committee's determination assigning 8900 Centre the highest number of evaluation points. Out of a possible 35 points for fiscal costs, Petitioner received 34 and 8900 Centre received 31.5. Thus, Petitioner's status as low bidder is reflected in the points awarded by the committee. Since neither the bid invitation or specifications were introduced, no finding can be made as to whether the difference between these two bidders comports with any instructions or directions provided by the agency to potential bidders, or whether this difference of 2.5 points on this criteria reasonably reflects and accounts for the dollar difference in these two bids. Petitioner received 34.75 points out of a possible 40 points on the general evaluation criteria "location," while 8900 Centre received the full 40 points. Within this criteria, there were three subcategories, and on the first two subcategories (central area and public transportation) there was an insignificant difference of less than one-half point between Petitioner and 8900 Centre. The major difference between these two bidders which accounts for their significant difference on the location criteria, was in the subcategory of environmental factors, in which Petitioner received 15.17 points and 8900 Centre received the full 20 points. Petitioner did not present competent substantial evidence to discredit or refute the committee's evaluation in the subcategory of environmental factors. To the contrary, the only testimony from a committee member was that of Susan Jennings, and according to her, Petitioner failed to explain the availability of individual air conditioning and heating controls, or the possibility of separate program entrances, which could be made available under its bid. Although Petitioner sought to explain at hearing that these desires of the agency could be accommodated in its bid, there is no evidence that such an explanation was provided in its bid or during the bid process when the evaluation committee visited the Petitioner's site. The committee was aware, however, that 8900 Centre would provide individual heating and air conditioning controls, as well as separate outside entrances for the three programs which would occupy the leased space. Additionally, the committee was concerned, according to Jennings, that parking areas at Petitioner's facility were more remote and removed from the building entrance than at 8900 Centre, and were somewhat obscured by trees and shrubbery, thereby presenting a potential safety concern for employees working after dark. Finally, every employee would either have a window or window access at 8900 Centre, while it was not explained that Petitioner's site would offer a similar feature. Thus, Petitioner failed to establish that the evaluation committee erred in assigning a significantly greater number of points for environmental factors to 8900 Centre than to Petitioner. The evidence reflects a reasonable basis for this difference. The other significant difference between these two bidders was in the subcategory for layout and utilization under the evaluation criteria "facility." Petitioner received 13.67 points while 8900 Centre received a full 20 points. Jennings explained that the separate outside entrances leading directly into the three programs that would occupy this space was preferred to a single reception area for all three programs. Petitioner offered the single reception area in its bid and site visit presentation, while 8900 Centre made it clear that each program would have its own entrance. Since these programs do not have a receptionist position, and none wanted to give up a secretarial position to serve as receptionist for all three programs, the committee did not consider the single reception area entrance to be desirable. Additionally, Petitioner's facility was a two-story building, while 8900 Centre is a single story facility. Jennings explained that the committee considered a ground level facility to be preferable to a two story building, particularly since the Medicaid program was to occupy the major portion of this space. The Medicaid program would have to be split up at Petitioner's facility, either in two separate buildings or on two levels of the same building, while at 8900 Centre, Medicaid could be accommodated in one, single story building, with the other two programs in a second, single story building. Finally, parking at 8900 Centre was directly next to, and outside the entrance of the building, while Petitioner offered to make assigned spaces available in a general parking area which serves its entire 100,000 square foot complex. The parking offered by Petitioner is more remote than that offered by 8900 Centre, and would be less secure at night due to a greater distance from the building entrances and the parking lot. Thus, Petitioner failed to establish that the committee erred in assigning a significantly greater number of points for layout and utilization to 8900 Centre than to Petitioner. There is a reasonable basis for this difference, according to the evidence in the record.
Recommendation Based upon the foregoing, it is recommended that Respondent enter a Final Order dismissing Petitioner's protest to Lease Number 590:1927. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of December 1988. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1050 Filed with the Clerk of the Division of Administrative Hearings this 9th day of December 1988. APPENDIX (DOAH Case Number 88-3765 BID) Rulings on Petitioner's Proposed Findings of Fact: Adopted, in part, in Finding of Fact 1, but Rejected in Finding of Fact 10, and otherwise as not based on competent substantial evidence in the record. Adopted in Finding of Fact 5. 3-5. Adopted in Finding of Fact 4, but Rejected in 7. 6-7. Rejected in Finding of Fact 8. Rejected in Finding of Fact 10, and otherwise as not based on competent substantial evidence in the record. Rejected in Findings of Fact 9 and 10, and otherwise as not based on competent substantial evidence. Rulings on the Respondent's Proposed Findings of Fact: Adopted in part in Finding of Fact 1, but otherwise rejected as not based on competent substantial evidence. Adopted in Finding of Fact 4. 3-4. Adopted in part in Findings of Fact 5 and 6, but otherwise rejected as not based on competent substantial evidence in the record of this case. Adopted In Findings of Fact 5, 7-10. Adopted in Finding of Fact 5. Adopted in Finding of Fact 7. Adopted in Finding of Fact 8. Rejected as irrelevant and unnecessary since the point difference in this subcategory is insignificant. Adopted in Finding of Fact 9. 11-12. Adopted in Finding of fact 10. COPIES FURNISHED: Michael V. Giordano, Esquire 7821 North Dale Mabry Suite 100 Tampa, Florida 33614 Jack Farley, Esquire W. T. Edwards Facility 4000 West Buffalo Fifth Floor, Room 520 Tampa, Florida 33614 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue Whether the Department of Transportation's (DOT) intended decision to award contract T2442 for the Intelligent Transportation System improvements (Project) and other incidental construction on State Road 9A, in Duval County, to American Lighting & Signalization, Inc. (ALS), is contrary to the agency's governing statutes, the agency's rules or policies, or the bid or proposal specifications.
Findings Of Fact Based upon the demeanor and credibility of the witnesses and other evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made:1/ The contract being protested is T2442 for the Intelligent Transportation System improvements and other incidental construction for State Road 9A, in Duval County. The Department advertised the bid solicitation notice for the Project on July 27, 2012. The bid solicitation notice included a list of all of the pay items and estimated quantities for the project. DOT also posted all of the pay items online in two formats. One format was a downloadable file that could be used in software, and the other was similar to an Excel spreadsheet file. These formats could be used to formulate a bid. Changes to pay items are issued in an Addendum, and while two addendums were issued for this project, neither affected the pay items for the project. For several years, DOT has mandated that prospective bidders use an automated, online bidding process, by which prospective bidders request bid documents and submit their bids using the DOT's website. The letting date established as the deadline for submission of bids via electronic submission was September 26, 2012, and was set forth in the bid solicitation notice. In order to be considered, all bids were due by 10:30 a.m. on that day. Letting is the term used to indicate the date that the bids are due. The bid solicitation notice included a requirement that bidders for the Project attend a mandatory pre-bid meeting to be held on August 20, 2012. Hinson Electrical is a licensed electrical contracting company based in Jacksonville, Florida. The company has completed "hundreds" of projects for the State of Florida, including DOT, and is pre-qualified to bid on jobs with DOT. The mandatory pre-bid meeting was held on August 20, 2012, as scheduled. G. Christopher Ginn, Project Manager for Hinson Electrical, attended the pre-bid meeting, signed his name, and identified the company he represented (Hinson Electrical) on the sign-in sheet. Section 337.168(2), Florida Statutes, provides: (2) A document revealing the identity of persons who have requested or obtained bid packages, plans, or specifications pertaining to any project to be let by the department is confidential and exempt from the provisions of section 119.07(1) for the period which begins two working days prior to the deadline for obtaining bid packages, plans, or specifications and ends with the letting of the bid. As a business strategy, Hinson Electrical routinely orders bid documents within the two-day blackout period mandated by section 337.168(2), during which time DOT is required to take down its list of contractors who have requested bid documents concerning a particular project. Ordering bid documents within the blackout period prevents competitors from discovering whether Hinson Electrical is bidding for a particular project. The blackout period for the Project began at 5:00 p.m. on Friday, September 21, 2012. The deadline to order the bid documents for the Project was 10:30 a.m. on September 25, 2012. There is no requirement that contractors request bid documents prior to the pre-bid meeting (if one is required for a particular project), or at any time prior to the order deadline, which is 24 hours before the bid deadline. DOT acknowledged at hearing that it is Hinson Electrical's prerogative to order the bid documents within the blackout period during which the identities of bidders are kept confidential. Hinson Electrical ordered the bid documents for the Project at approximately 1:00 p.m. on September 24, 2012. The computerized system immediately provided access for Hinson Electrical to download the plans and specifications for the project at issue. However, four minutes later, at approximately 1:04 p.m., Hinson Electrical simultaneously received an email with a "Prequalification Failure Notice," and a second email stating that the bid document request for the Project was "pending." The Prequalification Failure Notice indicated that the bid document was not provided because Hinson Electrical had not attended the required pre-bid meeting for the Project.2/ Failure to attend the pre-bid meeting was the only basis stated in the Prequalification Failure Notice for DOT refusing to provide the bid document. As noted, Hinson Electrical's representative did in fact attend the pre-bid meeting for the Project, and he signed the sign-in sheet, attesting to his presence at the meeting. The sign-in sheet had been transmitted to DOT on August 21, 2012, the day after the pre-bid meeting was held. Thus, DOT's basis for sending Hinson Electrical a Prequalification Failure Notice was in error. The Prequalification Failure Notice also stated, "[Y]ou will be contacted by email or phone as soon as possible during business hours regarding requirements for obtaining the bid documents." However, DOT did not send an email or call Hinson Electrical after 1:04 p.m. on September 24, 2012, or at any time on September 25, 2012. Phillip Davis, a DOT employee in the Contracts Administration Office, was "blind copied" on the Hinson Electrical Prequalification Failure Notice email, with a "high importance" tag. Mr. Davis' job responsibilities include following up on these types of notices, though he is not supervised to ensure this occurs. Mr. Davis' responsibilities also include checking sign-in sheets from pre-bid meetings to authorize release of bid documents to contractors. DOT admits that Mr. Davis did not read the Hinson Electrical Prequalification Failure Notice; did not check the sign-in sheet from the pre-bid meeting; and made no attempt to contact Hinson Electrical, as promised in the notice. From September 20 through 25, 2012, Daniel Hinson and Chris Ginn obtained quotes from suppliers and subcontractors to prepare a bid for the Project. Hinson Electrical also secured a bid bond for the Project, and had everything necessary to submit a bid, except for the actual bid document. In the afternoon or early evening of September 25, 2012, Daniel Hinson sat down at his computer with the price lists and quotes he had obtained to prepare a bid for the Project. It was then that Mr. Hinson discovered DOT had not granted him access to the bid document for this Project, and that the failure notice he had received pertained to this Project, and was in error. Hinson Electrical was bidding on a total of eight contracts at that time, some of which did not have a mandatory pre-bid meeting. As of the close of business on September 25, 2012, DOT had still not made any effort to contact Hinson Electrical, as promised in the failure notice. At 7:55 p.m. on September 25, 2012, Hinson Electrical sent an email to the Contracts Administration general email address, stating that Hinson Electrical's representative had attended the pre-bid meeting and asking why Hinson Electrical was being excluded from the bidding. Shortly after 7:00 a.m. the following morning (September 26, 2012, the bid deadline), Chris Ginn called the project inspector, Thomas Woods of HNTB Corporation, on Hinson Electrical's behalf, and requested that HNTB confirm that Hinson Electrical's representative had attended the pre-bid meeting. At 7:32 a.m. that same morning, Mr. Woods sent an email to Juanita Moore notifying her of the error and confirming that Hinson Electrical's representative had indeed attended the pre-bid meeting. The Contracts Administration Office opened at 8:00 a.m. on the day of the bidding deadline. Within 36 minutes (by 8:36 a.m.), Ms. Moore reviewed Mr. Woods' email; checked the sign-in sheet; and instructed a subordinate, Colette Jackson, to send the bid document to Hinson Electrical. Ms. Jackson immediately sent the bid document to Hinson Electrical under a cover email. Ms. Moore testified that Phillip Davis could have easily gone through these same steps on September 24, 2012 (two days before the bid deadline), and timely transmitted the bid document to Hinson Electrical, if he had only read the Prequalification Failure Notice on which he was copied. Ms. Moore agreed that 24 hours would have been sufficient time for Mr. Davis to check the sign-in sheet and release the bid document. When DOT finally provided the bid document to Hinson Electrical, it was 1 hour, 54 minutes before the bid submission deadline. At 8:40 a.m. on September 26, 2012, (four minutes after receiving the bid document) Daniel Hinson spoke by telephone with Colette Jackson about needing additional time to complete Hinson Electrical's electronic bid submission. Colette Jackson testified that one of her responsibilities at DOT is to move bid deadlines, and that she can do so quickly upon receiving instructions from Ms. Moore to do so. However, Ms. Jackson did not have authority to provide the requested relief, so she transferred the call to Ms. Moore. Upon being transferred to Ms. Moore, Mr. Hinson asked for additional time to complete the Hinson Electrical bid for the Project. That request was refused by Ms. Moore. In her view, the fact that the pay items and estimated quantities for the project had previously been provided should have enabled Hinson Electrical to submit a bid within the two hours remaining prior to the deadline. In addition, Ms. Moore felt Hinson Electrical should have taken it upon itself to contact DOT immediately upon receiving the disqualification notification if it believed it had complied with all prerequisites. Contrary to Ms. Moore's opinion, Mr. Hinson testified that it would have taken him about four hours to go through the various steps to submit Hinson Electrical's online bid for the Project. DOT's position that Hinson Electrical could have completed and submitted its bid with less than two hours remaining is rejected as not credible. However, even if that were possible, it would have put Hinson Electrical at a disadvantage because every other bidder was able to download the bid document immediately upon request after the pre-bid meeting. Daniel Hinson has submitted bids for hundreds of DOT projects (including "dozens" using the current online system) and he reasonably believed there was insufficient time remaining before the deadline to prepare a competent bid and ensure its accuracy. Mr. Hinson's testimony regarding the amount of time necessary to prepare a complete and competent bid for the Project is more credible than the testimony of Ms. Moore. Considering the potential cost to Hinson Electrical of a mistake made in haste, it was entirely reasonable for Hinson Electrical to decline to submit a bid, and instead request a bid extension. Likewise, it was unreasonable for DOT to decline the extension request, given that it was DOT's mistake that necessitated the extension. DOT extends bid deadlines dozens of times each year, for various reasons, including computer issues, mistakes in the bid documents, or bad weather. Ms. Moore testified about bid deadlines that had been moved, three or four times in some cases, for reasons including computer glitches, website issues, and "technical problems." In one such instance, contractors could not obtain their bid documents on the Monday before a Wednesday letting (which is what happened to Hinson Electrical in this case), and DOT postponed the bid deadline. In another instance, a bid deadline was postponed for a third time "because the vendors couldn't download what they needed to bid." And in another example, the bid deadline was postponed with notice provided just 92 minutes before the deadline due to "server issues at the Department." In this final example, once the malfunction was identified, DOT promptly sent the notice of postponement to the bidders and later completed the other necessary steps to move the bid deadline. A postponement notice can be sent to bidders in less than ten minutes after the decision to postpone a bid is made. All other steps required to move a bid deadline are typically accomplished by DOT personnel in about an hour. DOT knows of no harm that would have come to the other bidders had DOT agreed to move the bid deadline to allow Hinson sufficient time to submit its online bid. At 9:22 a.m. on September 26, 2012, Daniel Hinson sent an email to Colette Jackson in response to her email, stating there was insufficient time for Hinson Electrical to prepare its bid for the Project and that a protest would be filed if DOT posted its intent to award the contract to one of the other bidders. The letting of the project occurred as scheduled at 10:30 a.m. on September 26, 2012. At approximately 4:00 p.m. on October 24, 2012, DOT posted notice of its intent to award the contract to ALS. This was the second posting date for the September 26, 2012 letting date. Thereafter, Hinson Electrical timely served its notice of protest, formal protest pleading, and the required bond. The advertisement for the Project reads, in part, "Bidders are hereby notified that all bids on any of the following projects are likely to be rejected if the lowest responsive bid received exceeds the engineer's estimate by more than ten percent (10%)." DOT does reject all bids for being too high in some cases. The bid submitted by ALS for the Project exceeded the proposal budget estimate of $4,183,958 by 19.9 percent (ALS' winning bid was $5,016,501.73). The Contract Award Committee (Committee) is the DOT body with discretion to reject all bids for a project. However, Ms. Moore never informed the Committee of Hinson Electrical's situation so that it could determine whether the Project should be rebid. Even after posting notice of intent to award the Project to ALS, DOT retained discretion to reject all bids, but Ms. Moore was unaware of that discretion and never discussed the matter with the Committee. Hinson Electrical credibly established that it would have submitted a bid of $4,973,361.99 for the Project had DOT provided the online bid document when Hinson Electrical first requested it. Thus, Hinson Electrical would have been the low bidder, and presumably awarded the contract. DOT had at least three opportunities to correct its mistake and allow Hinson Electrical an opportunity to bid. DOT could have (l) extended the bid deadline, as it has in many other cases; (2) rejected all bids and rebid the Project, before posting notice of intent to award the contract; or (3) rejected all bids even after posting notice of intent. In their Prehearing Stipulation, the parties stipulated to the following: DOT has no policy statements, handbook provisions, internal memoranda, guidelines, or other documents regarding the following subjects: How a failure to timely transmit bid documents in response to a prospective bidder's request, whether due to a transmission error or otherwise, should be handled or what relief may be provided to the bidder; Acceptable grounds for extending a bid submission deadline; How an erroneous determination that a prospective bidder for a project was not qualified to bid should be handled, either before or after the bid deadline has expired; Relief that can or should be provided to a prospective bidder who was denied the opportunity to bid for a project due, at least in part, to some irregularity in the bidding process; Relief that can or should be provided to a prospective bidder who was denied the opportunity to bid for a project due, at least in part, to some error made by FDOT (including its computer system); and How to handle a situation in which all received bids exceed the budget for the project by more than 10%. (Prehearing Stipulation, pgs. 11-12)
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED: That a final order be entered by the Department of Transportation that rescinds the Notice of Intent to award Contract T2442 to American Lighting & Signalization, Inc. DONE AND ENTERED this 21st day of June, 2013, in Tallahassee, Leon County, Florida. S W. DAVID WATKINS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 21st day of June, 2013.
The Issue Whether Petitioner has established, by a preponderance of the evidence, that Respondent improperly evaluated the bids submitted in response to an Invitation to Bid (ITB) on Lease No. 590:2251. Whether Petitioner has established, by a preponderance of the evidence, that under the facts and circumstances of this case, Lease No. 590:2251 should be awarded to Petitioner.
Findings Of Fact Background HRS advertised an Invitation to Bid (ITB) on Lease Number 590:2251 on September 24, 1990 and October 1, 1990. The ITB was for approximately 37,888 square feet of existing office space for the HRS Office of Disability Determinations (ODD). The lease is for a term of five years, commencing on April 1, 1991. The ODD is presently, and was at the time of the bid submittal, housed in Petitioner's facility, the City Centre Building (City Centre) at 227 North Bronough Street, Tallahassee, Florida. The current agreement between HRS and the Petitioner involves two separate leases due to expire on March 31, 1991. The ODD has been housed in City Centre for approximately four and one-half years. HRS is combining the space now under two leases into one lease. Lease NO. 590:2251 is to house three program offices for the ODD: Central Area I, Central Area III, and the Tallahassee area. Prior to the bid being advertised, Charles Phillips, Director of the ODD, did not want to exercise the option to renew the HRS leases for space in City Centre. The Evaluation Committee HRS formed an Evaluation Committee to evaluate bids received in response to the ITB. Members of the committee were Bill Odom, Lucretia Young, Karen Gunter, and Dorea Sowinski. Ms. Sowinski served as the chairperson of the committee. All members of the Evaluation Committee were aware of concerns Mr. Phillips had with the City Centre prior to beginning the process evaluating the bids at issue in this case. Bill Odom, Lucretia Young and Karen Gunter are ODD area program administrators for the Tallahassee Area, Central Area I, and Central Area III, respectively. Dorea Sowinski is the Operations Management Consultant for the ODD and, as such, she handles purchasing and leasing for ODD. HRS held a pre-bid conference on October 5, 1990. Before the pre-bid conference, Linda Treml, the bid officer, and Dorea Sowinski discussed who would be on the Evaluation Committee. At the pre-bid conference, Ms. Treml identified the members of the Evaluation Committee. Voting was not discussed at the pre-bid conference. The ITB After the pre-bid conference, Linda Treml and Dorea Sowinski made changes to the ITB and issued the ITB to prospective bidders. The HRS manual on procurement of leased space, HRSM 70- 1, lists bid evaluation criteria that can be used. The evaluation criteria which can be used includes relocation costs. Relocation costs were not included among the criteria in the ITB. The failure to include relocation costs in the criteria for the evaluations of this bid in no way prejudiced the interests of the Intervenor. Any competitive advantage which may have been conferred as a result of this omission benefits the Intervenor. The Bid Opening HRS received two bids in response to the ITB. The Petitioner's bid offered space in City Centre. The only other bid was from Intervenor (Devoe Moore). Devoe Moore's bid offered space at the Fort Knox Center, 2729 Fort Knox Road, Tallahassee, Florida. The bids were opened on November 2, 1990. Petitioner's bid offered space at a lower rental rate for each of the five years of the lease term. Petitioner's bid was the low bid. Both bids were responsive. The bid officer, Linda Treml, was not present at the bid opening due to a family emergency. In Ms. Treml's absence, her supervisor, Ken McLane, conducted the bid opening. Mr. McLane does not normally attend bid openings. Instructions to the Evaluation Committee Before the Evaluation Committee met to evaluate the bids, Mr. McLane gave the committee instructions. Mr. McLane specifically instructed the Evaluation Committee that the chairperson would not evaluate the bids and would not vote. Ms. Sowinski questioned Mr. McLane regarding his instruction that the chairperson not vote at the time his instructions were given. Ms. Sowinski objected to not voting on the basis that, as committee chairperson on prior evaluation committees, she had always voted. In reply to Ms. Sowinski's questions, Mr. McLane indicated that in case of a tie in the number of points awarded each bidder, the chairperson would be the deciding vote. At the final hearing in this case, Mr. McLane testified that this was the only time he had instructed an evaluation committee chairperson not to evaluate bids and that the instructions he gave this Evaluation Committee in this regard were a mistake on his part. Mr. McLane testified that he was aware of no authority on which he based his decision that the chairperson would not participate in the evaluation. The other three members of the Evaluation Committee understood throughout the process that Ms. Sowinski would not vote unless there was a tie. The Original Bid Evaluations On November 15, 1990, three members of the Evaluation Committee filled out an evaluation sheet on each of the bids, assigning certain points to each of the evaluation criteria. As part of the evaluation process, the three members of the committee who had been instructed to evaluate the bids did so secretly and without consultation with other committee members regarding points assigned. The three voting members gave their evaluations to Ms. Sowinski, the committee chairperson. Ms. Sowinski saw the points that all the other Evaluation Committee members assigned to the various criteria for each building reflected in the bids. On November 15, 1990, Ms. Sowinski totalled the points assigned on each evaluation sheet and announced that the City Centre Building had received the most points. When the evaluation sheets of each of the three committee members who voted on November 15, 1990 were tallied, City Centre had 252 points and the Devoe Moore property (Fort Knox Center) had 245.6 points. More points meant a better bid. The Evaluation Committee was never reconvened. No testimony in the final hearing in this case indicates that any irregularity which may have occurred during the evaluation of the bids and assignment of points by Odom, Young, and Gunter had any material affect on the outcome or resulted in any prejudice to HRS or the Intervenor.1 The Phillips Memorandum Dorea Sowinski advised Charles Phillips, Director of ODD, of the result of the three member committee evaluation. Ms. Sowinski also showed Mr. Phillips a draft of her memorandum which stated that the Evaluation Committee recommended that the lease be awarded to the City Centre Building. After consulting HRS staff in facilities services, Ms. Sowinski suggested that Charles Phillips write a memo. Mr. Phillips wrote a memorandum to Ms. Sowinski dated November 16, 1990. This memo expressed Mr. Phillips' thoughts and comments regarding the City Centre Building and expressed his wishes that the memo be included in the recommendation. Details of the substance of Mr. Phillips' memo are further discussed (infra). The Submission of the Original Recommendation Ms. Sowinski wrote a memorandum dated November 19, 1990, to Ken McLane, recommending that the bid be awarded to Petitioner and that the ODD offices of HRS remain in the City Centre Building. Ms. Sowinski attached Mr. Phillips' November 16, 1990 memorandum and the evaluation sheets of the three other members of the Evaluation Committee to her memo. This accomplished the forwarding of the Evaluation Committee recommendation. The Change in Evaluation Procedure Ms. Treml returned to work on November 19, 1990, and reviewed the bid package for the lease at issue. Ms. Treml testified that she noted that only three members of the committee evaluated the bids and called Dorea Sowinski. Ms. Sowinski informed Ms. Treml that Mr. McLane had instructed her not to vote. Ms. Treml then set up a meeting with Mr. McLane. It was Ms. Treml's view that not allowing the chairperson of the Evaluation Committee to vote contradicted the HRS lease manual. Ms. Treml's view regarding the contradiction stems from her reading of HRS Manual 70-1 on page 5-18, which states: When all committee members have individually evaluated each proposal the entire evaluation committee will meet to review the individual evaluations and jointly develop a committee recommendation of the lowest and best bid based on the overall scores. The provision of HRS Manual 70-1 in question does not contain the word "vote" (although under the evaluation procedure in this case, the application of evaluation criteria and assignment of points amounts to a "vote"). The provision does not mention chairperson or the role of such a person. A specific finding is made that the material aspects of this provision of HRS Manual 70-1 which are important to resolving the disputed facts in this case are that committee members independently evaluate prior to the meeting of the entire committee and prior to the development of a committee recommendation. During her meeting with Mr. McLane, Ms. Treml expressed concern to Mr. McLane that evaluation committee chairpersons consistently voted and that she needed the evaluations of all committee members in order to complete the process. During this meeting, Mr. McLane and Ms. Treml decided to send the evaluations back and to request that Ms. Sowinski conduct an evaluation. The Second Evaluation On November 27, 1990, Dorea Sowinski filled out an evaluation sheet like the ones the other members of the Evaluation Committee filled out on November 15, 1990. Ms. Sowinski filled out her evaluation sheet after having seen how many points each previous evaluator had assigned to each bidder for each of the criteria. Ms. Sowinski testified that she left the evaluations of the other committee members at her office while she conducted her evaluations at her home. She testified that she had not looked at the other evaluations since the date she tallied them and that she did not remember what the totals those evaluations were. Ms. Sowinski also testified that she did not know the difference between the points already assigned and did not know what it would take to shift the vote from City Centre to Fort Knox. To the extent that the testimony regarding Ms. Sowinski's recollection of the original bid evaluations is offered to establish Ms. Sowinski's independence in conducting this evaluation, the testimony is not convincing. Careful consideration of the facts and circumstances established in this case results in a specific finding that Ms. Sowinski's evaluation of the bids was not independent. Ms. Sowinski prepared an evaluation total cover sheet for the original three evaluations when she forwarded the evaluation favoring City Centre. She testified that she no longer has the evaluation sheet from the first (three person) evaluation and believes she "put it in the recycle bin." The evaluations cover sheet which Ms. Sowinski recycled contained a specific listing of the points given each criteria based on the evaluations of the other three committee members. At the time she prepared her evaluation sheet, Ms. Sowinski was aware of the November 16th Phillips' memo and was aware that Mr. Phillips did not want to stay in City Centre. In substance, the Phillips memorandum expresses his concerns regarding the high crime rate and problems with transients in the area of the City Centre Building. In addition, the memo outlines problems with the past history of building management at City Centre and states that, since "the owners of the City Centre have filed Chapter 11 bankruptcy," Mr. Phillips does not believe there will be an improvement in maintenance. The memo also mentions Mr. Phillips' concerns regarding structural problems with the building and its parking garage. Ms. Sowinski's evaluation of the City Centre Building is the only evaluation in this case which mentions "Chapter 11 bankruptcy." The evaluation sheet that Ms. Sowinski filled out changed the total points for each building to 327 for City Centre and 329.8 points for Fort Knox. A memorandum from Dorea Sowinski to Linda Treml dated November 30, 1990, recommended the Fort Knox property for the lease award. Ms. Sowinski did not reconvene the Evaluation Committee to consider anything further regarding the bids before issuing the November 30, 1990 memorandum with the recommendation reversing the prior recommendation submitted on November 19, 1990. On December 13, 1990, Ken McLane signed letters for Linda Treml to both bidders advising that HRS intended to award Lease No. 590:2251 to Devoe Moore for the Fort Knox property. In consideration of all the facts and circumstances in this case, the actions of HRS in changing the original bid evaluations by instructing Ms. Sowinski to conduct an after the fact evaluation amounts to a failure to adhere to the evaluation criteria that it created thereby undermining the integrity of the bid process. The actions of HRS in this regard were arbitrary and capricious. The actions of HRS in allowing the original bid recommendation to be reversed based upon the tainted evaluations conducted by Ms. Sowinski amounts to a discriminatory standard of review of the bids. The action of HRS in this regard was also arbitrary and capricious. The Testimony of Petitioner's Expert At the final hearing in this case, Petitioner offered the testimony of Mary Goodman, Chief of the Bureau of Property Management of the Florida Department of General Services (DGS). DGS is responsible for promulgating rules for evaluating bids for leases such as the one at issue in this proceeding. Section 255.249(2)(b), Florida Statutes (1990 Supp.). Ms. Goodman has been the Bureau Chief of the DGS Bureau of Property for over nineteen years and has been involved in State property management for over thirty years. Ms. Goodman is the only witness in this proceeding offered as qualified to provide opinions regarding State procurement of leased space and the appropriate procedures to be followed in such procurement. Based upon her qualifications, Ms. Goodman was accepted as an expert witness and her testimony is relied upon as helpful in making findings of fact 44 through 62 in this Recommended Order. When evaluating bids in the public procurement process, agencies should form an evaluation committee, and members of that committee should evaluate proposals received independently. The term "individually," as used in the HRS Manual 70- 1 at pages 5-18, is synonymous with "independently." In the public procurement process, the requirement that evaluations of bids be performed independently means that the committee chair or a bid officer instructs the committee as to their responsibilities and provides the committee with evaluation criteria and with instructions as to assignment of points. Each committee member then assigns points as set forth in the criteria without consulting with other members. In this manner each committee member obtains the total points assigned each responsive bid. Ms. Goodman knows of nothing that would authorize the chairperson or any member of an evaluation committee to fill out an evaluation form after seeing the evaluation forms filled out by other members. To do so would not amount to an "independent evaluation" and would violate State policy because the requirement of independence would not be met. Ms. Goodman is aware of no policy manual, rule, or statute that would prohibit the chairperson of an evaluation committee from acting as bid officer and refraining from voting when other members vote. Typically in the public procurement process, an evaluation committee consists of three members with a committee chair as a nonvoter and guider. If three members of an evaluation committee make an evaluation, and a fourth member is asked to also make an evaluation, if the fourth member has previously had access to the other three evaluations and knows what such evaluations contain, the fourth member cannot make an independent, unbiased and unprejudiced evaluation. The results of an evaluation committee's voting is called a recommendation because of the organizational structure within a department. In most state agencies, there is an oversight person who looks at the committee recommendation to determine that the committee did in fact make an independent evaluation and that the recommendation complies with applicable statutes and rules. Even though a reviewing authority may override the committee recommendation, such authority must stay within the bid criteria. Once instructions have been given to an evaluation committee and action has been taken pursuant to such instructions, a change or rescission of previous instructions should be based on just cause; reasons that are not arbitrary, capricious, prejudiced or biased. Based upon the assumption that "the chairperson has always voted," no sufficient good reason or justification exists to warrant a change in instructions to allow a committee chairperson to vote after the committee has been instructed that the chair would not vote, and the committee has done its job and forwarded its recommendation based upon the prior instructions. The purpose in providing in the rules that an evaluation committee be formed to evaluate bids is to make evaluations impartial, unbiased, and to provide integrity in the process of public procurement of leased space. Normally, the evaluation committee recommendation is followed by the agency head. Under the facts proved in this proceeding, the change in instructions previously given the Evaluation Committee occurred after the committee had completed its evaluation and submitted its recommendation based on the prior instructions. The rescission of the prior instruction on voting by the chairperson resulted in the fourth committee member evaluating the bids and scoring_ criteria points after that member had reviewed the other evaluations, tallied the original evaluations points and prepared the original recommendation. The resulting second and different recommendation changed the results of the process such that the low bidder, originally awarded the most points by the committee, lost the bid recommendation because the scoring change resulted in a different point total. The procedure thus applied in this case was arbitrary and capricious. In the bid evaluation process in this case, relocation costs, the financial condition of the bidders, and structural engineering analysis were not included in the criteria for evaluating responsive bids. None of the evaluation criteria in the ITB for this bid pertain to or encompass past performance by a bidder. Typically, State agencies do not include past performance in bid evaluation criteria and, if such criteria was included, the ITB should require every bidder to provide documentation of past performance in any leased space offered and some criteria should be established by which the submission could be evaluated.2 None of the evaluation criteria in the ITB for this bid would allow an evaluation committee to consider Chapter 11 status in a bankruptcy proceeding. The State of Florida has had a number of leases where lessors have gone into bankruptcy, mortgage foreclosures and some instances where Savings and Loans have taken over and then gone defunct. The State has leased from receivers, including receivers in-bankruptcy. Absent a specific statement in the ITB that no bid would be received or considered from a property owner involved in reorganization proceedings, the agency should not take such matters into consideration in evaluating bids. Structural condition of the building may be considered under "physical characteristics" in the evaluation criteria but where, as in this case, the lease agreement requires any facility being offered to be kept in compliance with all existing building codes, it should be assumed that all bids declared responsive meet that requirement. Under the evaluation criteria established by HRS in this case, it is not permissible to consider the area of town the building is in as long as the building is within geographic boundaries established in the ITB. The Sowinski Evaluation of the City Centre Building Ms. Sowinski attached a typed sheet to the evaluation sheet which she filled out for her evaluation of City Centre. This attachment explains her evaluation and assignment of points. The written instructions to the Evaluation Committee require such an explanation of points in two areas of Item 2 in the evaluation criteria, both relating to the location of the space bid. (Pet. Composite Dep. Ex. 20) The Evaluation Criteria score sheet was used by all committee members including Ms. Sowinski. The portions of the score sheet at issue in this proceeding are under item 2(a) and (c). Item 2(a) calls for an evaluation of "The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on operations planned for the requested space." Ms. Sowinski deducted six of a possible twelve points under item 2(a). Ms. Sowinski indicates in her explanation under Item 2(a) that she deducted points for building location for the following reasons: City Centre is located in one of the highest rated crime areas of Tallahassee. (Ms. Sowinski also outlines problems with harassment by transients, car burglary and vandalism in and around the building.) The past performance of building management. (Problems listed include poor response to tenant needs in the past.) As part of her Item 2(a) explanation, Ms. Sowinski also states that the building owners are in "Chapter 11 bankruptcy" and that she questions the owners' financial resources to maintain the building. Ms. Sowinski testified that she did not deduct points for this; however, on the basis of the evaluation sheet there is no way to make an objective distinction in this regard. Ms. Sowinski attaches an engineering report from April 1990 to her explanation. This report addresses structural problems. As part of her Item 2(a) explanation, Ms. Sowinski also notes such problems are being corrected. Item 2(c) on the Evaluation Criteria score sheets calls for an evaluation of the "Character of adjacent properties compatible with office use." Ms. Sowinski deducted four out of eight possible points under Item 2(c). In her explanation of points deducted under Item 2(c), Ms. Sowinski states that the deductions are based on the fact that the bus station is located across the street, there is a Salvation Army housing unit nearby and that these factors contribute to the transient problems in the area. The written instructions to the Evaluation Committee note that scoring pursuant to Item 2, "Location," is subjective. Therefore, evaluators are instructed to provide an explanation less than the maximum points are given for each weighting factor in that category. In assigning evaluation criteria points under Item 2(a), the evaluator's consideration of "physical characteristics of the building and area surrounding it" is limited to factors which have an effect on the operations planned for the requested space. If an evaluator assigned less than the maximum available points under Item 2(a) to a building based upon "crime rate" and/or "problems with transients" in the area of the building, then the evaluator, pursuant to the written instructions, must explain how such factors have or would have a negative effect on the operation of the ODD. Ms. Sowinski's explanation under Item 2 (a) fails to provide sufficient information in this regard to reasonably justify the deduction of six out of a possible twelve points that were available to City Centre in this category. Under the facts and circumstances of this case, such action was unreasonable.3 Pursuant to the wording of Item 2(c), evaluators are limited to considerations of how the "character of adjacent properties" might not be "compatible with office use" when assigning less than the maximum points allowable in this category. If an evaluator assigned less than the maximum available points under Item 2(c) to a building based upon such factors as the proximity of a bus station and/or a "Salvation Army housing unit," then, based upon the written instructions given, the evaluator must explain how such factors are incompatible with office use. Ms. Sowinski's explanation, which states that the bus station and housing units "account for a large portion of the transient population, which is a direct cause for many of the problems in the area" does not sufficiently explain how the character of these adjacent properties are so incompatible with ODD "office use" as to warrant the deduction of four out of a possible eight points that were available to City Centre. Under the facts and circumstances of this case, such action was unreasonable. Ms. Sowinski's evaluation of the City Centre bid was not reasonably based on the evaluation criteria HRS established. Therefore, even if Ms. Sowinski's evaluation of these bids was not tainted, her evaluation of the City Centre bid was materially improper. De novo Application of Evaluation Criteria to These Bids Item 1 (Associated Fiscal Costs) is, as noted in the written instructions to the Evaluation Committee, objectively based upon present value methodology computations. All bid evaluations in the record are consistent. In each evaluation, City Centre, the low bidder, receives the maximum of 40 points and Fort Knox receives 36.2. Points awarded pursuant to Item 1 on the Evaluation Sheet are not at issue. Therefore, in a de novo evaluation, City Centre is awarded 40 points and Fort Knox receives 36.2 points under Item 1. The Evaluation Criteria Score Sheet lists Item 3(a) as "Facility, Susceptibility of the design of the space offered to efficient layout and good utilization, which will be determined by evaluation committee." As noted in the written instructions to the committee, this item is subjective and an explanation of the assignment of fewer than allowed points is required. Item 3(a) is not at issue, and the maximum 13 points are awarded each building for the purpose of the de novo evaluation. The remainder of Item 3 is not in issue and is objective. All evaluations in the record award 6 points to City Centre and 8 points to Fort Knox. In the de novo evaluations, the same approach is taken. The application criteria in dispute in this case are those listed on the Evaluation Criteria Score Sheets under Item 2, Location, specifically 2(a) "The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on operations planned for the requested space" and 2(c) "Character of adjacent properties compatible with office use." Based upon the facts proved in this case, an independent review of the evaluation criteria and other appropriate exhibits, both the City Centre and Fort Knox buildings should receive the maximum allowed points in Items 2(a) and 2 (c). Therefore, each building is awarded twelve points in Item 2(a) and eight points in Item 2(c). The application of a de novo evaluation of the bids in this case, as described above, results in total scores of 87 for City Centre and 85.2 for Fort Knox. No party in this case, to and including the final hearing has contended that the votes of Mr. Odom, Ms. Young or Ms. Gunter were affected by any irregularity or argued that these evaluations should be discarded or ignored. None of the parties make such a contention in their proposed recommended orders and made no proposed findings of fact in this regard.4 Petitioner has proved, by a preponderance of the evidence, that the original recommendation, based upon the evaluation by Mr. Odom, Ms. Young and Ms. Gunter was in material compliance with the ITB as well as applicable statutes and rules. Petitioner is therefore entitled to the award of Lease NO. 590:2251 as provided in the original Evaluation Committee Recommendation. A de novo evaluation of the bids in this case proves, by a preponderance of the evidence, that Petitioner submitted the lowest and best bid. Petitioner is entitled to the award of Lease No. 590:2251 as provided in the original Evaluation Committee order.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, and the evidence of record, it is RECOMMENDED: That Respondent HRS enter a Final Order awarding Lease No. 590:2251 to Petitioner. It is further RECOMMENDED that Respondent return the cash bond posted by Petitioner pursuant to Section 255.25(3)(c), Florida Statutes. DONE and ORDERED this 21st day of March, 1991, in Tallahassee, Florida. JAMES W. YORK, 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 21st day of March, 1991.
