The Issue Whether Respondent should sustain Petitioner's challenge to the preliminary determination to reject Petitioner's bid as not responsive to Respondent's Invitation to Bid No. SB 91C-284V and to award the contract to another bidder that submitted a higher bid?
Findings Of Fact Based on the record evidence, the following Findings of Fact are made: On March 12, 1991, Respondent issued Invitation to Bid No. SB 91C-284V (hereinafter referred to as the "ITB") through which Respondent solicited the submission of bids to supply Respondent with prestressed concrete poles for a one year period beginning May 16, 1991. The ITB was a multi-page document with various component parts. Bidders were instructed on the first page of the ITB to complete and "RETURN ONE COPY OF ALL BID SHEETS AND THIS [BIDDER ACKNOWLEDGMENT] FORM." They were advised elsewhere on the first page of the ITB that "[o]ne copy of all bid documents that ha[d] page numbers, and this executed Invitation to Bid [Bidder Acknowledgment] [F]orm [had to] be returned for the Bid to be considered." The advisement concerning the requirement that all numbered pages had to be returned for a bid to be considered was repeated at the bottom of each numbered page of the ITB. Directly beneath the Bidder Acknowledgment Form on the first page of the ITB was the following provision: This Invitation to Bid, General Conditions, Instructions to Bidders, Special Conditions, Specifications, Addenda and/or any other pertinent document form a part of this proposal and by reference are made a part thereof. The ITB further provided, among other things, that "[i]n the best interest of [Respondent], [Respondent] reserve[d] the right to reject any and all bids and to waive any irregularity in bids received." Petitioner and South Eastern Prestressed Concrete, Inc. (South Eastern) submitted the only bids in response to the ITB. In accordance with the ITB'S instructions, Petitioner completed and returned to Respondent the Bid Summary Sheet, on which it indicated its price offer. It also completed and executed the Bidder Acknowledgment Form and returned it, along with the entire first page of the ITB, to Respondent. Petitioner, however, failed to return, as part of its bid submittal, all of the numbered pages of the ITB. Omitted from Petitioner's submittal were numbered pages 3 and 4. These missing pages contained paragraphs A. through N. of the ITB's Special Conditions, which covered the following subjects: A. Scope; B. Delivery; C. Award; D. Term of Contract; E. Brand Name; F. Catalog Cuts; G. Estimated Quantities; H. Bid Exempt; I. Bidders Responsibility; J. Corrections; K. Joint Bidding, Cooperative Purchasing Agreement; L. Withdrawal; 1/ M. Minority Certification Application; and N. Public Entity Crimes. There was nothing on numbered pages 3 and 4 of the ITB that the bidder needed to fill out or sign. While paragraphs M. and N. of the ITB's Special Conditions did make reference to certain forms that the bidder had to complete and submit to Respondent, these forms did not appear on either numbered page 3 or numbered page 4. They were separate documents. Petitioner completed these forms and submitted them to Respondent pursuant to the requirements of the Special Conditions. Petitioner did not propose in its bid submittal any contract terms or conditions that were at variance with those set forth in paragraphs A. through N. of the ITB's Special Conditions. Petitioner did not intend to signify, by failing to return numbered pages 3 and 4, any unwillingness on its part to adhere to contract terms and conditions set forth on those pages. Of the two bids submitted in response to the ITB, Petitioner's was the lowest. A preliminary determination, though, was made to reject Petitioner's bid because Petitioner had not returned numbered pages 3 and 4 of the ITB and to award the contract to South Eastern as the lowest responsive bidder. It is this preliminary determination that is the subject of the instant bid protest filed by Petitioner.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Palm Beach County School Board enter a final order sustaining the instant bid protest and awarding to Petitioner the contract advertised in Invitation to Bid No. SB 91C-284V. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of June, 1991. STUART M. LERNER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of June, 1991.
The Issue At issue in this proceeding is whether the Department of Environmental Protection's decision to reject all bids submitted for the project entitled BDRS 52-01/02 was illegal, arbitrary, dishonest, or fraudulent.
Findings Of Fact Parties Petitioner, All America Homes of Gainesville, Inc. (All America), is a corporation doing business in the State of Florida. All America submitted a timely written bid in response to the Department's ITB and filed timely protests to the Department's actions. The Respondent, the Department of Environmental Protection, is an agency of the State of Florida which manages and operates state parks under its jurisdiction, and solicits construction projects in state parks, pursuant to Chapter 258, Part I, Florida Statutes, through its Division of Recreation and Parks, Bureau of Design and Recreation Services. The ITB In November, 2001, the Department issued an ITB on a construction project entitled Hillsborough River State Park Concession Building, project number BDRS 52-01/02. The ITB included the Bid Specifications for the project. Bids were required to be submitted no later than 3:30 p.m. on Tuesday, December 18, 2001, at the Bureau's Tallahassee, Florida, office. The written Specifications define several terms, including, but not limited, to the following: ADDENDUM: A written explanation, interpretation, change, correction, addition, deletion, or modification, affecting the contract documents, including drawings and specifications issued by the OWNER [Department] and distributed to the prospective Bidders prior to the bid opening. ALTERNATE BID: Separate optional bid item for more or less project requirement used for tailoring project to available funding. Also may consist of alternate construction techniques. BASE BID: Formal bid exclusive of any alternate bids. BID FORM: The official form on which the OWNER requires formal bids to be prepared and submitted. ORAL STATEMENTS: Verbal instruction. NOTE: No oral statement of any person, whomever shall in any manner or degree modify or otherwise affect the provisions of the contract documents.[1] SEALED BID: The formal written offer of the Bidder for the proposed work when submitted on the prescribed bid form, properly signed and guaranteed. The Bid Specifications also contained the following relevant sections: Alternatives If the OWNER wishes to learn the relative or additional construction cost of an alternative method of construction, an alternative use of type of material or an increase or decrease in scope of the project, these items will be defined as alternates and will be specifically indicated and referenced to the drawings and specifications. Alternates will be listed in the bid form in such a manner that the Bidder shall be able to clearly indicate what sums he will add to (or deduct from) his Base Bid. The OWNER will judge for himself that such alternates are of comparable character and quality to the specified items. The Order of the alternate may be selected by the Department in any sequence so long as such acceptance out of order does not alter the designation of the low bidder. ADDENDA If the Consultant[2] finds it would be expedient to supplement, modify or interpret any portion of the bidding documents during the bidding period, such procedure will be accomplished by the issuance of written Addenda to the bidding documents which will be delivered or mailed by the OWNER'S Contracts section to all bidders who have requested bidding documents. Interpretation No interpretation of the meaning of the drawings, specifications or other bidding documents and no correction of any apparent ambiguity, inconsistency or error therein will be made to any Bidder orally. Every request for such interpretation or correction should be in writing, addressed to the Consultant. All such interpretations and supplemental instructions will be in the form of written Addenda to the bidding documents. Only the interpretation or correction so given by the Consultant in writing and approved by the OWNER shall be binding, and prospective Bidders are advised that no other source is authorized to give information concerning, or to explain or interpret, the bidding documents. B-16 Bid Modification Bid modification will be accepted from Bidders, if addressed as indicated in Advertisement for Bids and if received prior to the opening of bids. No bid modification will be accepted after the close of bidding has been announced. Modifications will only be accepted if addressed in written or printed form submitted with the bid in sealed envelopes. Telegrams, facsimiles, separate sealed envelopes, written on printed modifications on the outside of the sealed envelopes will not be accepted. All bid modifications must be signed by an authorized representative of the Bidder. Modification will be read by the OWNER at the opening of formal bids. B-21 Rejection of Bids The OWNER reserves the right to reject any and all bids when such rejection is in the interest of the State of Florida, and to reject the bid of a bidder who the OWNER determines is not in a position to perform the work. B-23 Award of Bid . . .The qualified Bidder submitting the lowest bid will be that Bidder who has submitted the lowest base bid plus any selected alternates. . . . The OWNER reserves the right to waive any minor irregularities in bids received when such waiver is in the interest of the OWNER. The Award of Bid will be issued by the OWNER only with responsible Bidders, found to meet all requirements for Award of Bid, qualified by experience and in a financial position to do the work specified. Each bidder shall, if so requested by the OWNER, present additional evidence of his experience, qualifications and ability to carry out the terms of the Agreement. (Emphasis in original, except for Section B-10.) The Bid Form is included with the Specifications and provides in part: Base Bid: Furnish labor, equipment, Lump Sum $ supervision and material to construct a new concession building of 2940 square feet located at the Hillsborough River State Park along with the alteration of the existing concession building according to plans and specifications. Alternate #1: Furnish labor, equipment, Add Amt.$__ supervision and material to renovate the existing concession building according to plans and specifications. There is a separate section for "Allowances," i.e., Section 01210, for the Hillsborough State Park. This section provides in part: SECTION 01210 – ALLOWANCES * * * 1.2 SUMMARY This Section includes administrative and procedural requirements governing allowances. Certain materials and equipment are specified in the Contract Documents and are defined by this [sic] specifications as material and labor to be provided against a pre-determined allowance. Allowances have been established in lieu of additional requirements and to defer selection of actual materials and equipment to a later date when additional information is available for evaluation. If necessary, additional requirements will be issued by Change Order. * * * 3.3 SCHEDULE OF ALLOWANCES A. Allowance #1: Include in the base bid an allowance for the purchase and installation of. . . kitchen equipment. . . . The total dollar amount of the allowance to be included shall be $12,000.00. There is also a separate section for "Alternates," i.e., section 01230, for Hillsborough River State Park, which provides in part: SECTION 01230 – ALTERNATES * * * 1.3 DEFINITIONS Alternate: An amount proposed by bidders and stated on the Bid Form for certain work defined in the Bidding Requirements that may be added to or deducted from the Base Bid amount if OWNER decides to accept a corresponding change either in the amount of construction to be completed or in the products, materials, equipment, systems, or installation methods described in the Contract Documents. The cost or credit for each alternate is the net addition to or deduction from the Contract Sum to incorporate alternate into the Work. No other adjustments are made to the Contract Sum. . . . . 3.1 SCHEDULE OF ALTERNATES A. Alternate No. 1: Renovate the existing concession building in its entirety as shown in the drawings and specified herein. (emphasis added.) At this stage of the bidding documents, the contractor/bidder is requested to provide a Base Bid/Lump Sum on the Bid Form to "[f]urnish labor, equipment,. . .to construct a new concession building," and to provide an additional and separate amount for Alternate No. 1 to "[f]urnish labor, equipment, . . . to renovate the existing concession building." On December 13, 2001, the Bureau issued "Addendum No. One (1)" (written by the architect) to the ITB on the "Hillsborough River State Park – Concession Building." The Addendum contained the following relevant sections: Specification Section 01210: Allowances Add the following new paragraph 3.3.B: ”Allowance #2: Include in the base bid an allowance for the renovations of the existing concession building; renovations shall be defined by the Owner. The total dollar amount of the allowance to be included shall be $25,000." Specification Section 01230: Alternates Modify paragraph 3.1.A. as follows: "Alternate No. 1: Renovate the existing concession building as defined by the Owner, and as provided for under Section 01210, Allowances." (emphasis added.) Each contractor was required to sign the Addendum and attach it to the bid. By definition, and pertinent here, an addendum is an additional written instruction to a contractor during the bidding process. Based on the weight of the evidence, the purpose of this Addendum was to require the contractor to include a $25,000.00 Allowance (for Allowance # 2) in the Base Bid, for the work which might be performed if the Department requested the work to be performed for Alternate No. 1, i.e., for the renovation of the existing concession building.3 (The Department's architect decided it would cost approximately $25,000.00 to renovate the existing concession building, hence Allowance # 2.) In other words, the Addendum does not have a specific dollar amount to be included for Alternate No. 1. Rather, the $25,000.00 is an Allowance for the work described as Alternate No. 1, but the amount is to be included in the Base Bid and not as a separate line item, dollar amount. But, importantly, the Addendum did not delete the potential work to be performed as described in Alternate No. 1, although Mr. Bowman and others believed that the Addendum deleted Alternate No. 1. It deleted the necessity to place a specific dollar amount on the Bid Form for Alternate No. 1. (Mr. Bowman is a registered Professional Engineer and a licensed contractor. He has worked for the Department for 15 years and has served as Bureau Chief for two years. He supervises the contract section and the design section, which was responsible for preparing the technical plans and specifications and bidding out the job.) Mr. Bowman offered the following explanation why he believed the Addendum was confusing: Okay. I think the confusion that was created, you know, I think the addendum in itself, you know, said add $25,000 to the base bid, but then on the bid form, it still had the space down there for alternate number one, which alternate number one, which alternate number one had become $25,000 that was to be allowed for the concession building, and I think that's where the confusion came in because I think they were still confused, that they weren't really sure that they should not put that 25 down there but they knew they had been told in the addendum to do it and I think that's the reason for the notes and we got to the correspondence on the bid form, was they wanted to make sure that that's what we were wanting to do. And I think that's where the confusion came in. Like I said, it's always, if you could go back and do it again, it would be much wiser just to issue a whole new bid form and then we wouldn't be here today. But, we didn't do that. Okay. So, that's why we are here. The language in this Addendum, when read with the original Bid Specifications, apparently caused confusion with some of the bidders on the project. Several bidders called Marvin Allen (an architect and project manager for the Department's Bureau of Design and Recreation Services) prior to the submission of the bids, to clarify how the $25,000.00 Allowance should be shown on the Bid Form. (Mr. Allen did not author any of the specifications, including the Addendum.) He was listed as a contact person. He did not contact any bidders. But, Mr. Allen recalled telling each bidder who asked that the Allowance of $25,000.00 should be included in the Base Bid. But, he does not recall the names or numbers of the bidders who called, "possibly" three, four or five. Mr. Allen believed the Addendum was clear. According to Mr. Allen, the bidders who called him found the Addendum confusing. The oral responses to the bidders can be construed as interpretations of the Addendum. However, pursuant to Section B- 10 of the Specifications, any such interpretations were required to "be in the form of written Addenda to the bidding documents." Also, any such questions should have been in writing. If Section B-10 were complied with, all bidders would have been potentially on the same footing, or, at the very least, would have had access to a written clarifying document. Opening of the Bids On December 18, 2001, the bids were opened by Mike Renard, Contracts Manager with the Bureau of Design and Recreation Services, and Susan Maynard, Administrative Assistant. Mr. Dwight Fitzpatrick, a representative of All America, also attended the bid opening. The Bid Form submitted by Nelco showed a Base Bid of $355,478.00 (Lump Sum $355,478.00), and also showed an amount of $25,000.00 on the Alternate # 1 line (Add Amt. $25,000.00). See Finding of Fact 6. (It was clear to Mr. Renard that the $25,000.00 should have been included on Nelco's Base Bid. But Mr. Renard believed that Nelco submitted a responsive bid because the Department only accepted the Base Bid. Mr. Bowman agreed.) Nelco was the only one of five bidders to have a dollar amount in the Alternate #1 line under "Add Amt. $ ." All America submitted the second lowest Base Bid of $362,000.00. There was also a hand-written note on the All- America Bid Form that stated: "Addenda # 1 instruction to place $25,000 allowance in both Base Bid and as alternate # 1." Another hand written note was located below the "Add Amt. $-0-" line: "amount added in Base Bid with $25,000 allowance per Marvin Allen." The Department considered All America's bid responsive. It is a fair inference that three out of five of the other Bid Forms contained language indicating that the bidders were relying on Addendum No. One by placing the $25,000.00 Allowance in the Base Bid.4 It is uncertain whether they did so in light of the instructions of Mr. Allen concerning how to complete the Bids Forms. However, given the nature of the calls to Mr. Allen, there is a reasonable inference that there was some confusion among some of the bidders. The Department determined that Nelco submitted the lowest Base Bid, but the Department's staff had a question as to whether Nelco had included the $25,000.00 in its Base Bid. After conferring with his superiors, Mr. Renard was instructed to call Nelco to make certain that its Base Bid included the Allowance amount ($25,000.00). Mr. Renard spoke with Steve Cleveland, Nelco's Project Manager, "to verify the fact that [Nelco] had the allowance in their base bid." Mr. Cleveland orally confirmed that Nelco's Base Bid included the $25,000.00 Allowance. Mr. Renard asked Mr. Cleveland to send him a letter verifying this statement. Mr. Renard viewed this inquiry as a request for clarification or verification, not an opportunity for Nelco to modify its bid. Mr. Bowman agreed. (Mr. Renard did not believe Addendum No. 1 was confusing.) In a letter dated December 20, 2001, Mr. Cleveland confirmed that Nelco’s Base Bid of $355,478.00 included the Allowance amount and that Nelco could still perform the contract if the $25,000 Allowance was removed from its Base Bid pursuant to the ITB, i.e., that Nelco would perform the contract for $355,478.00 less $25,000.00, or $330,478.00, if the Department did not accept Alternate # 1 and the Allowance. (An alternate does not have to be accepted by the Department.) According to Mr. Renard, Mr. Cleveland never mentioned modifying, changing, or altering Nelco's bid. The Department only accepted the Base Bid for each bid. Mr. Renard did not consider it unusual to call a bidder or contractor to verify information to determine whether they can or cannot perform the work at the stipulated price. He considered it common to make this inquiry. Also, it was common in Mr. Bowman's experience to call a bidder to get clarification. Mr. Renard was not aware of any statute or rule which authorizes the Department to request clarification from a bidder after the bids are opened. Mr. Renard was more familiar with the bid forms than Mr. Allen. After receiving Mr. Cleveland's letter, the Department determined that Nelco submitted the lowest Base Bid and that the $25,000.00 amount that Nelco wrote on the Bid Form Alternate # 1 line, was a minor irregularity in the bid which the Department, as the Owner, could waive pursuant to the ITB. On December 20, 2001, the Department posted the Tabulation of Bids showing the anticipated award of the contract to Nelco. At the hearing, an unsigned letter on Department letterhead was introduced, which was addressed to Nelco and stated that Nelco submitted the apparent low bid. However, Mr. Renard testified that these letters are prepared routinely, but not mailed out without his signature. Mr. Renard did not recall signing the letter or ever sending out such a letter to Nelco. On December 21, 2001, the Department received a Notice of Intent to Protest letter from Allen E. Stine, the President of All America. In his letter, Mr. Stine stated that Nelco’s bid should have been rejected for failure to follow the specified format as per Addendum No. 1, or adjusted to have the $25,000.00 amount added to their Base Bid. Bid Protests All America filed a written formal bid protest on January 4, 2001. On January 9, 2001, Cindy Otero of All America, notified Mr. Renard by letter, and stated that Mr. Stine was available for a hearing regarding the bid protest. On January 28, 2002, Mr. Renard returned All America's check for the bond, stating that it was unnecessary. Mr. Stine recounted a number of unanswered telephone calls after the first protest was filed. During one conversation, Mr. Renard recalled Mr. Stine saying to him, "You can't do this, you can't do this." After receiving the first formal protest, the Department staff consulted with legal staff and reviewed the documents and bid procedures. Based on the number of questions received concerning the Addendum and the hand-written notes on several of the bid forms, Mr. Bowman, Bureau Chief, determined that the bid documents were confusing and ambiguous. (Mr. Bowman stated that this was their first bid protest in his 15 years with the Department.) Therefore, Mr. Bowman decided that it would in the best interest of the State of Florida to reject all of the bids pursuant to the Bid Specifications. Mr. Bowman felt that the ITB should be re-written in order to make it clearer and allowing all of the bidders to re-bid the project without any confusion or ambiguity. Mr. Stine stated that his "senior estimator" told him that the bid language "could be confusing." He and his "senior estimator" had a discussion about whether the Allowance should have been placed in the Base Bid or not. At the time of submission of All America's bid, Mr. Stine was clear that the Allowance should be placed in the Base Bid, especially after calling Mr. Allen. But, his senior estimator was not so clear. In order to appease him, Mr. Stine placed the hand-written note on All America’s proposal. Mr. Stine essentially, "cleaned" up his proposal. At the hearing, Mr. Bowman testified Rule 60D-5.0071, Florida Administrative Code, see Conclusion of Law 59, does not list "confusing or ambiguous bid specifications" as one of the circumstances allowing for the rejection of all bids. However, Mr. Bowman later stated during the hearing that he believed the circumstances listed in Rule 60D-5.0071 were not the only circumstances authorizing the Department to reject all bids. Mr. Bowman testified that he believed that general confusion among the bidders caused by the ambiguous ITB constituted sufficient grounds for rejecting all bids. Mr. Bowman was advised by legal counsel that rejecting all of the bids would probably result in another bid protest by Nelco, All America, or both. Thus, the Department decided to delay addressing All American’s first protest until after posting the rejection of all bids and receiving the subsequent protests, so that all of the protests could be resolved at once in an efficient and economical manner. Notwithstanding the Department's justifications for rejecting all bids and not proceeding on All America's initial protest, the record is unclear why the Department waited several months to reject all bids. On May 13, 2002, the Department posted the rejection of all bids. On May 16, 2002, the Department received a formal written protest of the rejection of all bids filed by All America. On May 17, 2002, Jerome I. Johnson, attorney for the Department, contacted Mr. Robert A. Lash, All America's counsel at the time, concerning the resolution of All America’s formal protest. (Before the final hearing, Mr. Lash, with All America's consent, withdrew as counsel for All America.) The parties agreed to suspend formal bid protest procedures until a meeting could be held between the parties in an attempt to resolve the protests. Mr. Johnson sent a letter dated May 21, 2002, to Mr. Lash confirming this conversation. On June 26, 2002, a meeting was held among the Department staff, legal staff, and Mr. Lash and Mr. Stine, representing All America. The parties were unable to resolve the protests. At the conclusion of the meeting, the parties agreed that formal protest procedures would not be implemented until Mr. Stine could confer further with his counsel. In a letter dated July 5, 2002, Mr. Lash stated that his client wished to proceed with formal protest procedures and requested an administrative hearing on the protests. Are the Specifications and Bid Documents Ambiguous and Was There Confusion? The parties stipulated that "[t]he Addendum language was confusing," notwithstanding the testimony of several witnesses that they were not confused. The Department's determination that the bid Specifications, including the Addendum, and the Bid Form, which remained unchanged after the Addendum was issued, were confusing and ambiguous, is supported by the weight of the evidence. This is particularly true regarding the Bid Form. The Addendum required the bidder to include an Allowance of $25,000.00 in the Base Bid for work described as Alternate # 1. But the Bid Form was unchanged to reflect the Addendum changes. The Bid Form retained a line for the bidder to submit an additional amount for Alternate # 1. Further, it appears that several bidders were confused, including, Mr. Stine, who spoke with Mr. Allen and requested and received clarification. Further, it is unclear whether all of the bidders, including Nelco, were aware of the oral interpretations or clarifications of the Addendum rendered to some of the bidders. Rejection of All Bids Based upon the foregoing, given the standard of review in this proceeding discussed in the Conclusions of Law, the weight of the evidence indicates that the Department's action, in rejecting all bids, was not illegal, arbitrary, dishonest, or fraudulent. The Department's staff was well-intended and made some mistakes along the way, e.g., by not changing the Bid Form, which they readily admit. But there was a rationale for rejecting all bids under the circumstances.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department issue a final order dismissing All America’s Petition to Prevent Rejection of Bids and Award Contract to Petitioner and denying All America's request for attorney’s fees and costs. DONE AND ENTERED this 24th day of September 2002, in Tallahassee, Leon County, Florida. CHARLES A. STAMPELOS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 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 24th day of September 2002.
The Issue The issue in this case is whether the bid of Kimball International Marketing, Inc., and Corporate Interiors, Inc., (Petitioners) is the lowest responsible bid which was received by the Pinellas County School Board (Respondent) for systems furniture (partitions) for the New District Administration Building, or in the alternative, whether all bids should be rejected as urged by The Harter Group (Intervenor).
Findings Of Fact On or about February 27, 1990, the Respondent sought competitive bids for systems furniture (partitions) for the New District Administration Building. In response thereto, Respondent timely received three bids, including those of the Petitioners and Intervenor, and one no bid. The bid opening occurred on April 17, 1990, and neither Petitioners nor Intervenor were determined to be the lowest responsible bidder. However, the Petitioners' bid was lower than that of the bidder to whom the Respondent proposes to award this contract. Petitioners' bid was $932,502.39, Intervenor's bid was highest at $1,101,509.90, and the bid of lowest responsible bidder, Haworth, Inc., was $1,072,286.50. The first reason given by Respondent for its determination that Petitioners' bid was not responsive to the bid specifications is that it did not include an amount for sales tax. Intervenor also did not include sales tax in its bid, but Haworth, Inc., which was determined by Respondent to be the lowest responsible bidder, did include sales tax. However, there was no dispute at hearing that the Respondent does not pay sales tax on transactions involving the acquisition of furnishings for the Pinellas County School System, and that Section 9.2.2 of the bid specifications erroneously stated that this contract would not be exempt from sales tax. The second reason given by Respondent for rejecting Petitioners' bid was that it omitted a required page from the approved form which was to be used to list those items in the bid proposal that were not in strict compliance with the Respondent's specifications. Petitioners admit that the required page numbered 00310-7 was not included in their bid, but maintain that it was not necessary to include this exact page since all items in their bid do meet specifications, and since a statement to this effect was included elsewhere in the bid. The lowest responsible bidder, as determined by the Respondent, did include this required page with a statement thereon that "all items comply". Intervenor also included this page listing 11 items in its bid which differed from the specifications. The purpose of this required page is to allow the Respondent to have a uniform, clearly identifiable place in each bid proposal where it can look to determine if the items in that bid meet specifications, without having to check every page of each bid. The third reason given by Respondent for rejecting Petitioners' bid was that it included numerous pages of unit costs which were not called for in the specifications, without any explanation as to their meaning or the purpose for which they were included in the bid. Section 4.1.1 of the bid specifications, found at page 00100-11, makes it clear that no bid form other than that which is set forth in the specifications will be accepted, and specifically states that bidders are not even to retype the form on their letterhead, but are to simply fill-in a copy made from the form in the specifications. The Petitioners admit that their bid includes additional, unexplained information that was not called for in the specifications. A final reason given by Respondent at hearing for rejecting Petitioners' bid was that it was accompanied by a bid bond, required by Section 4.2.4 of the specifications, in the name of Kimball International Marketing, Inc., while the public entity crime affidavit, required by Section 2.1.5, was subscribed to by Corporate Interiors, Inc. Petitioners' bid did not include a resolution or other evidence of authority that Corporate Interiors, Inc., had authority to submit a public entity crime affidavit on behalf of Kimball International Marketing, Inc., or that the affidavit submitted was valid as to Kimball. Thus, while Petitioners maintain that their bid was jointly filed on behalf of the manufacturer, Kimball, and the vendor, Corporate Interiors, their bid includes a bond from the manufacturer only, and a crime affidavit from the vendor only. Section 1.8 of the specifications, found at page 00100-2, specifies that the bidder is the person or entity that submits a bid. Petitioners urge that theirs is a joint bid, but they have failed to submit a joint bond or affidavit. Section 5.2.1 of the specifications allows the Respondent to reject any bid which fails to include a required security, or other required data. The bid which was determined by the Respondent to be the lowest responsible bid contains no technical flaws, errors or omissions, and the proposal meets all specifications for this project. The Respondent properly posted notice of its intent to award this contract to Haworth, Inc., the lowest responsible bidder. Under Section 5.3.1 of its bid instructions, the Respondent has the right to waive "any informality or irregularity in any Bid or Bids received and to accept the Bid or Bids which, in (its) judgment, is in (its) own best interest." Respondent chose not to waive any of the irregularities in the Petitioners' bid. This decision was made, in part, because of Respondent's previous experience with Petitioners in their installation of similar systems for Respondent at the Walter Pownall Service Centers in which there had been problems involving service during installation, coordination of the installation work, and verification that invoices received from Corporate Interiors did not exceed the bid base price, and that all items being paid had actually been received.
Recommendation Based on the foregoing, it is recommended that the Respondent enter a Final Order dismissing Petitioners' and Intervenor's protests of its intent to award a contract for systems furniture (partitions) for the New District Administration Building to Haworth, Inc., as the lowest responsible bidder. DONE AND ENTERED this 6th day of July, 1990, 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 6th day of July, 1990. APPENDIX TO RECOMMENDED ORDER, CASE NO. 90-2863BID Petitioner and Intervenor filed letters, but no proposed findings of fact upon which rulings could be made. Rulings on Respondent's Proposed Findings of Fact: Adopted in Finding 1. Adopted in Finding 3. 3. Adopted in Findings 4-6. 4. Adopted in Finding 6. 5. Adopted in Findings 4-6. 6. Adopted in Finding 6. 7. Adopted in Findings 6, 8. 8. Adopted in Finding 1. 9. Adopted in Findings 2, 3. 10-12. Adopted in Finding 6. 13. Adopted in Finding 4. 14. Adopted in Finding 3. 15. Adopted in Finding 5. 16-17. Adopted in Finding 7. 18. Adopted in Finding 1. 19. Adopted in Finding 8. COPIES FURNISHED: Allen D. Zimmerman, President Corporate Interiors, Inc. 1090 Kapp Drive Clearwater, FL 34625 Bruce P. Taylor, Esquire P. O. Box 4688 Clearwater, FL 34618-4688 Sue Olinger 1284 West Fairbanks Avenue Winter Park, FL 32789 Dr. Scott N. Rose Superintendent P. O. Box 4688 Clearwater, FL 34618
The Issue The first issue to be determined is whether the BOARD can reject all bids, with or without cause. The second issue is to determine if the BOARD is required to have cause, was there a sufficient basis for the rejection of all bids in Bid NO. 3996?
Findings Of Fact On December 14, 1987, the BOARD sent invitations to bid to a list of approved vendors in Bid NO. 3996. The purpose of the invitation was to obtain the lowest responsible bid on a purchase of one hundred and fifty typewriters. The bids were to be submitted prior to January 11, 1988 at 2:00 P.M.. They were opened by the BOARD on the same day. OFFICE did not receive an invitation to bid despite its request to be placed on the approved vendor's list in November of 1987. When OFFICE learned of the outstanding invitation to bid, its representative, Mr. Richard Foss, went to the BOARD's Purchasing Department and requested a bid package. The bid documents given to OFFICE mistakenly gave January 14, 1988 at 2:00 P.M. as the deadline for the bid submission. Because of the later date given by the BOARD to OFFICE, the company's bid was received after the opening of the bids. When the results of the bidding were made known at the public bid opening, NAPLES bid was the lowest received. On January 14, 1988, after 10:42 A.M., it was discovered by the BOARD that OFFICE's bid price was lower than the price submitted by NAPLES. At this time, NAPLES bid had not yet been accepted by the BOARD, and no formal announcement had been made awarding the contract to NAPLES. During the BOARD's Purchasing Department's bid analysis, a request was made to reject all bids in Bid NO. 3996. The reason given by Purchasing for the request for rejection was that the specifications were being revised. The bids were rejected on the same date. The written reason sent to the vendors on January 14, 1988 for the bid rejection was that one vendor had been given an incorrect opening date. Attached to the written notice to the vendors was a new bid invitation for Bid NO. 4013. The BOARD explained its mistake was unfair to the one vendor. A new bid opening date was given of February 1, 1988. On January 14, 1988, in addition to the required bid documents, OFFICE submitted a letter which listed additional offerings or incentives that OFFICE would give the BOARD if OFFICE was awarded the contract. These additional purchasing incentives were: wall charts and teacher/student manuals for each typing classroom in the county. OFFICE also informed the BOARD that one of the BOARD's own service personnel was already trained in the servicing of Swintec typewriters. The bid submitted by OFFICE did not meet either the weight or the print wheel specifications as set forth in Bid NO. 3996. The specifications as written in Bid NO. 3996 were not written to eliminate all other typewriters but the Brothers 511-11. Weight specifications required were below the Brother's minimum weight, and at least two other manufacturers provide protected drop-in cassette print wheels in electronic typewriters. The Invitation to Bid contained specific provisions which encouraged the bidding of typewriters other than the Brother 511-11, and set up procedures under which other typewriters, which substantially meet the specifications, could be reviewed on their merits. NAPLES was the lowest responsible bidder for the electronic typewriter contract in the prior school year. The BOARD had rejected all bids at that time because of the decision to consider a different brand of typewriter once bids were opened. A notice of protest was filed by NAPLES, and the BOARD agreed to honor NAPLES bid and award the company the contract. The BOARD revised its bid specifications from last year prior to its solicitations for bids in Bid NO. 3996. The protected drop-in cassette print wheel and the weight requirements were two new technical specifications. During the hearing, the BOARD was unable to determine whether the weight factor or the protected drop-in cassette print wheel requirement will continue to be included in future revisions of the specifications.
Recommendation Based on the foregoing, it is RECOMMENDED: That the BOARD reject the bid submitted by OFFICE as it was nonconforming and sought an advantage not enjoyed by the other bidders. Reinstate the bids which were rejected in Bid NO. 3996, consider the bids, and make an award of the contract to NAPLES. DONE and ENTERED this 30th day of March, 1988, in Tallahassee, Florida. VERONICA D. DONNELLY 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 30th day of March, 1988. COPIES FURNISHED: Stephen Emens, President Naples Business Equipment and Systems, Inc. 859 4th Avenue South Naples, Florida 33940 Harry A. Blair, Esquire 2138-40 Hoople Street Ft. Myers, Florida 33901 Richard Foss, Typewriter Sales Manager 8A-Del Prado Boulevard Cape Coral, Florida 33904 Karl Engel, Superintendent Lee County Public Schools The School Board of Lee County 2055 Central Avenue Fort Myers, Florida 33901
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 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.
Findings Of Fact A request for bids to remodel and make additions to Washington Elementary School was issued by Respondent on August 15, 1990, for Project No. 0191-8210. The request for bids included requests for a base work (the "base bid") and additional work described in various alternates (the "total bid"). Respondent had the option of selecting one or more alternates or none of the alternates. Bids were filed by four bidders on January 15, 1990. Bid tabulations were posted on January 23, 1991. Petitioner was the lowest bidder, and Select Contracting, Inc. ("Select"), was the second lowest bidder. Petitioner's base bid was in the amount of $1,406,500. Petitioner's bid for the alternates eventually selected by Respondent was in the amount of $1,594,300. 2/ The bid documents required bidders to include a bid bond in an amount not less than five percent of the bid. Petitioner included a bid bond with its bid in the amount of $75,000 which was more than five percent of its base bid but less than five percent of the total bid calculated after taking into account the alternates selected by Respondent. Respondent recommended to its Superintendent that the contract should be awarded to Petitioner. Select filed a bid protest on January 25, 1991, seeking an informal hearing. Select alleged that Petitioner's bid was not responsive because it failed to include a bid bond for five percent of Petitioner's total bid, including the alternates selected by Respondent. Select included a bid bond for five percent of its total bid, including the alternates selected by Respondent. Respondent conducted an informal hearing on February 6, 1991, and proposed that all bids should be rejected and the project re-advertised. Respondent determined that Petitioner's bid was non-responsive in that it failed to include a bid bond in an amount equal to five percent of the total bid, including all alternates selected by Respondent. Respondent further determined that relevant language in the bid documents is ambiguous and may create an economic advantage for bidders who provide a bid bond in an amount less than that provided by other bidders. In a written analysis of the basis for recommending the rejection of all bids, the General Counsel stated: In the instant case, since bid amount is not specifically defined by the SCHOOL BOARD, one bidder may receive an unfair economic advantage over another by only including in its bid amount the cost for obtaining a bond which was less than the actual bid amount, (i.e. base bid plus alternates). The only reason that Respondent did not regard the amount of Petitioner's bid bond as a minor irregularity was that Respondent wanted to assure that all bidders were placed on ". . . an equal playing field . . ." by avoiding an unfair economic advantage for one or more bidders. 3/ Relevant language in the bid documents which defines the amount of the required bid bond is ambiguous. The Advertisement For Bid, in relevant part, requires that bids ". . . must be accompanied by a bid bond or cashier's check in an amount not less than five percent (5%) of the bid . . . ." Section 3.05(d) of the Instructions to Bidders refers bidders to Section 3.08 for purposes of the bid bond. Section 3.08 in relevant part requires bids to be accompanied by a bid bond ". . . of not less than five percent (5%) of the amount of the Bid . . . ." The bid proposal form, however, provides that the bidder ". . . further agrees that the security in the form of a Bid Bond, or Cashier's Check in the amount of not less that five percent (5%) of the total Bid Price . . . accompanies this Bid " A bid bond in an amount equal to five percent of the base bid satisfies the requirements in the bid documents for a bid bond in all but one instance. A bid bond in an amount not less than five percent of the base bid is not consistent with the representation in the proposal form that a bidder has included a bid bond equal to five percent of the total bid price. Respondent's bid documents have historically required a bid bond for only five percent of the base bid. The reference in the bid proposal form to a bid bond equal to five percent of the total bid is a recent change made by Respondent and is limited to the bid proposal form. The inclusion of a bid bond for only five percent of the base bid is consistent with Petitioner's historical practice in bidding previous jobs offered by Respondent. Petitioner obtained no unfair economic advantage over Select by including a bid bond for only five percent of the base bid while Select included a bid bond equal to five percent of the total bid, including the alternates selected by Respondent. The uncontroverted evidence establishes that both Petitioner and Select obtained their respective bid bonds at no cost to either bidder. Companies that issue bid bonds, including the companies that issued bid bonds to Petitioner and Select, do not impose a charge for issuing a bid bond in the ordinary course of doing business. Such companies make their money if and when they issue a performance and payment bond for the successful bidder. 4/ Respondent did not know at the time it formulated its proposed agency action that no unfair economic advantage was gained by a bidder who submitted a bid bond for five percent of the base bid rather than five percent of the total bid. Respondent was uncertain of the economic advantage derived from submitting a lower bid bond, if any. Counsel for Select represented that an economic advantage was gained by Petitioner. Respondent decided to reject all bids and look ". . . for . . . direction from a Hearing Officer. " Petitioner is ready, willing, and able to contract for and perform the work necessary to complete the Project. Petitioner is a pre-qualified contractor for projects undertaken by Respondent. Petitioner has a bonding limit substantially in excess of that required to complete the Project and substantial experience in similar projects for the Broward County School Board. Respondent is confident and has no concern over Petitioner's ability to complete the Project. 5/
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner's written formal protest be GRANTED and the contract awarded to Petitioner. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 3rd day of April, 1991. DANIEL 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 3rd day of April, 1991.
The Issue Whether Respondent acted contrary to the agency's governing statutes, rules, or policies or the bid specifications in its proposed decision to award Contract No. T7380 to Astaldi Construction Corporation ("Astaldi").
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, and on the entire record of the proceeding, the following Findings of Fact are made: The Department is a state agency authorized by section 337.11 to contract for the construction and maintenance of roads within the State Highway System, the State Park Road System, and roads placed under its supervision by law. The Department is specifically authorized to award contracts under section 337.11(4) to “the lowest responsible bidder.” On April 15, 2016, the Department advertised a bid solicitation for Contract T7380, seeking contractors for the widening of a 3.8 mile portion of U.S. Highway 301 in Hillsborough County from two lanes to six lanes between State Road 674 and County Road 672 and over Big Bull Frog Creek. The advertisement provided a specification package for the project and the “Standard Specifications for Road and Bridge Construction” (“Standard Specifications”) used on Department roadway projects. The work included seven components: bridge structures (Section 0001), roadway (Section 0002), signage (Section 0003), lighting (Section 0004), signalization (Section 0005), utilities (Section 0006), and intelligent transportation systems (Section 0007). The advertisement identified 666 individual items of work to be performed and quantity units for each item. The project was advertised as a low-bid contract with a budget estimate of $51,702,729. The Department’s bid proposal form contains five columns with the following headings: Line Number; Item Number and Item Description; Approximate Quantities and Units; Unit Price; and Bid Amount. The bid proposal form contains line items for the seven components of the project. The utilities component contains 42 line items, each with an Item Number and Item Description. For example, Line Number 1410 corresponds with the following Item Number and Item Description: “1050 11225 Utility Pipe, F&I, PVC, Water/Sewer, 20–40.9 [inches].” Each bidder inserts a Unit Price for the line item in the corresponding “Unit Price” column. The “Bid Amount” column for each line item is an amount generated by multiplying a bidder’s Unit Price by the Quantities (determined by the Department) for each Line Number. The Bid Amount for each Line Number is then added together to generate the “Total Bid Amount” representing the bid for the entire project. Astaldi, Prince, Hubbard, and other potential bidders attended the mandatory pre-bid meeting. Prequalified contractors were given proposal documents that allowed them to enter bids through Bid Express, the electronic bidding system used by the Department. Plan revisions were issued by addenda dated May 10, 2016, and June 7, 2016. A Question and Answer Report was published and updated as inquiries were addressed. Bids were opened on the letting date of June 15, 2016. Bids for Contract T7380 were received from Astaldi, Prince, Hubbard, the DeMoya Group (“DeMoya”), Ajax Paving Industries of Florida, LLC (“Ajax”), and Cone & Graham, Inc. (“Cone & Graham”). The bids were reviewed by the Department’s contracts administration office to ensure they were timely, included a Unit Price for each line item, and contained the completed certifications required by the specifications. Bidders were checked against the Department’s list of prequalified bidders to confirm they possessed a certification of qualification in the particular work classes identified by the bid solicitation. Each bidder’s total current work under contract with the Department was examined to ensure that award of Contract T7380 would not place the bidder over its Department-designated financial capacity limit. Astaldi submitted the lowest bid, a total amount of $48,960,013. Prince submitted the next lowest bid, a total amount of $57,792,043. Hubbard’s total bid was the third lowest at $58,572,352.66. The remaining bidders came in as follows: DeMoya, $63,511,686.16; Ajax, $68,617,978.10; and Cone & Graham, $70,383,697.74. All bidders were prequalified in the appropriate work classes and had sufficient financial capacity, in accordance with section 337.14 and Florida Administrative Code Chapter 14-22. The Department’s construction procurement procedure, from authorization to advertisement through contract execution, is outlined in the Department’s “Road and Bridge Contract Procurement” document (“Contract Procurement Procedure”). The scope statement of the Contract Procurement Procedure provides: “This procedure applies to all Contracts Administration Offices responsible for advertising, letting, awarding, and executing low bid, design-bid-build, construction, and maintenance contracts.” Limited exceptions to the procedure may be made if approved by the assistant secretary for Engineering and Operations. If federal funds are included, the Federal Highway Administration division administrator, or designee, must also approve any exceptions from the procedure. The stated objectives of the Contract Procurement Procedure are: “to standardize and clarify procedures for administering low-bid, design-bid-build, construction, and maintenance contracts” and “to provide program flexibility and more rapid response time in meeting public needs.” The Department’s process for review of bids is set forth in the “Preparation of the Authorization/Official Construction Cost Estimate and Contract Bid Review Package” (“Bid Review Procedure”). The scope statement of the Bid Review Procedure states: This procedure describes the responsibilities and activities of the District and Central Estimates Offices in preparing the authorization and official construction cost estimates and bid review packages from proposal development through the bid review process. Individuals affected by this procedure include Central and District personnel involved with estimates, specifications, design, construction, contracts administration, work program, production management, federal aid, and the District Directors of Transportation Development. The Bid Review Procedure contains a definitions section that defines several terms employed by the Department to determine whether a bid or a unit item within a bid is “unbalanced.” Those terms and their definitions are as follows: Materially Unbalanced: A bid that generates reasonable doubt that award to that bidder would result in the lowest ultimate cost or, a switch in low bidder due to a quantity error. Mathematically Unbalanced: A unit price or lump sum bid that does not reflect a reasonable cost for the respective pay item, as determined by the department’s mathematically unbalanced bid algorithm. Official Estimate: Department’s official construction cost estimate used for evaluating bids received on a proposal. Significantly Unbalanced: A mathematically unbalanced bid that is 75% lower than the statistical average. Statistical Average: For a given pay item, the sum of all bids for that item plus the Department’s Official Estimate which are then divided by the total number of bids plus one. This average does not include statistical outliers as determined by the department’s unit price algorithm. For every road and construction project procurement, the Department prepares an “official estimate,” which is not necessarily the same number as the “budget estimate” found in the public bid solicitation. The Department keeps the official estimate confidential pursuant to section 337.168(1), which provides: A document or electronic file revealing the official cost estimate of the department of a project is confidential and exempt from the provisions of s. 119.07(1) until the contract for the project has been executed or until the project is no longer under active consideration. In accordance with the Bid Review Procedure, the six bids for Contract T7380 were uploaded into a Department computer system along with the Department’s official estimate. A confidential algorithm identified outlier bids that were significantly outside the average (such as penny bids) and removed them to create a “statistical average” for each pay item. Astaldi’s unit pricing was then compared to the statistical average for each item. The computer program then created an “Unbalanced Item Report,” flagging Astaldi’s “mathematically unbalanced” items, i.e., those that were above or below a confidential tolerance value from the statistical average. The unbalanced item report was then reviewed by the district design engineer for possible quantity errors. No quantity errors were found.1/ The Department then used the Unbalanced Item Report and its computer software to cull the work items down to those for which Astaldi’s unit price was 75 percent more than or below the statistical average. The Department sent Astaldi a form titled “Notice to Contractor,” which provided as follows: The Florida Department of Transportation (FDOT) has reviewed your proposal and discovered that there are bid unit prices that are mathematically unbalanced. The purpose of this notice is to inform you of the unbalanced nature of your proposal. You may not modify or amend your proposal. The explanation of the bid unit prices in your proposal set forth below was provided by ASTALDI CONSTRUCTION CORPORATION on ( ) INSERT DATE. FDOT does not guarantee advanced approval of: Alternate Traffic Control Plans (TCP), if permitted by the contract documents; Alternative means and methods of construction; Cost savings initiatives (CSI), if permitted by the contract documents. You must comply with all contractual requirements for submittals of alternative TCP, means and methods of construction, and CSI, and FDOT reserves the right to review such submittals on their merits. As provided in section 5-4 of the Standard Specifications for Road and Bridge Construction you cannot take advantage of any apparent error or omission in the plans or specifications, but will immediately notify the Engineer of such discovery. Please acknowledge receipt of this notice and confirmation of the unit bid price for the item(s) listed below by signing and returning this document. Section 5.4 of the Bid Review Procedure describes the Notice to Contractor and states: “Contracts are not considered for award until this form has been signed and successfully returned to the Department per the instruction on the form.” State estimating engineer Greg Davis testified that the stated procedure was no longer accurate and “need[s] to be corrected” for the following reason: Since the procedure was approved back in 2011, we’ve had some subsequent conversations about whether to just automatically not consider the award for those that are not signed. And since then we have decided to go ahead and just consider the contract, but we are presenting a notice, of course, unsigned and then let the technical review and contract awards committee determine. Astaldi signed and returned the Notice to Contractor and noted below each of the ten listed items: “Astaldi Construction confirms the unit price.” Mr. Davis explained that the purpose of the Notice to Contractor form is to notify the contractor that items have been identified as extremely low and to ask the contractor to confirm its understanding that in accepting the bid, the Department will not necessarily approve design changes, methods of construction, or maintenance of traffic changes. Section 6.6 of the Contract Procurement Procedure sets forth the circumstances under which an apparent low bid must be considered by the Department’s Technical Review Committee (“TRC”) and then by the Contract Awards Committee (“CAC”). Those circumstances include: single bid contracts; re-let contracts; “significantly mathematical unbalanced” bids; bids that are more than 25 percent below the Department’s estimate; 10 percent above the Department’s estimate (or 15 percent above if the estimate is under $500,000); materially unbalanced bids, irregular bids (not prepared in accordance with the Standard Specifications); other bid irregularities2/; or “[a]ny other reason deemed necessary by the chairperson.”3/ Bids that are not required to go before the TRC and CAC are referred to as “automatic qualifiers.” Because it was mathematically unbalanced, the Astaldi bid was submitted to the TRC for review at its June 28, 2016, meeting. The TRC is chaired by the Department’s contracts administration manager, Alan Autry, and is guided by a document entitled “Technical Review Committees” (“TRC Procedure”). The TRC Procedure sets forth the responsibilities of the TRC in reviewing bid analyses and making recommendations to the CAC to award or reject bids. The TRC voted to recommend awarding Contract T7380 to Astaldi. The TRC’s recommendation and supporting paperwork was referred to the CAC for its meeting on June 29, 2016. The duties of the CAC are described in a document entitled “Contracts Award Committees” (“CAC Procedure”). Pursuant to the CAC Procedure, the CAC meets approximately 14 days after a letting to assess the recommendations made by the TRC and determines by majority vote an official decision to award or reject bids. Minutes for the June 29, 2016, CAC meeting reflect 21 items before the committee including: two single bid contracts; four bids that were 10 percent or more above the official estimate; one bid that was 15 percent or more above the official estimate on a project under $500,000; three bids that were more than 25 percent below the official estimate; and 11 bids with significantly unbalanced items, including Contract T7380 with an intended awardee of Astaldi. The CAC voted to award Contract T7380 based on the low bid submitted by Astaldi. A Notice of Intent to award the contract to Astaldi was posted on June 29, 2016. As noted at Finding of Fact 2, supra, Contract T7380 consisted of seven components: structures, roadway, signage, lighting, signalization, utilities, and intelligent transportation system. The Department does not compare bids by component, but looks at the total bid amount to find the lowest bidder. The Department also reviews the bids for discrepancies in individual unit items using the process described above. Astaldi’s bid of $48,960,013 was approximately $8.8 million below Prince’s bid of $57,792,043, $9.6 million less than Hubbard’s bid of $58,572,352, and $2.7 million below the Department’s public proposal budget estimate of $51,702,729. As part of its challenge to the intended award, Prince performed a breakdown of bids by individual components and discovered that nearly all of the differences between its bid and Astaldi’s could be attributed to the utilities component. Astaldi’s bid for the utilities component was $7,811,720, which was roughly $8.5 million below Prince’s utilities bid of $16,305,903 and $5.8 million below Hubbard’s utilities bid of $13,603,846.4/ The utilities component was included pursuant to an agreement between the Department and Hillsborough County, the owner of the water and sewer lines, relating to the improvement of water and sewer lines along the roadway limits of the project. The utility work consists of installing a new water- line and force main sewer. The existing water main and the existing force main conflict with the proposed location of the new storm drainage system. The new water main and force main must be installed, tested, and approved before being put into active service. To prevent water utility outages to customers, the new system must be installed and approved before the existing waterline and existing force main can be cut off and removed. Utility work is therefore the first task to be performed on Contract T7380. Once the utility component is completed, the contractor will furnish and install the stormwater system, the roadway, the bridgework, and all other components. Article 3-1 of the Standard Specifications5/ reserves to the Department the right to delete the utility relocation work from the contract and allow the utility owner to relocate the utilities. Utilities are the only portion of a Department contract subject to deletion because the funding is provided by the utility owner, which usually has allocated a certain dollar figure to contribute towards the contract prior to the bidding. If the bid for utilities comes in over the utility owner’s budget, the owner can opt out of the contract and self-perform. In this case, Hillsborough County had contracted with the Department to contribute $8.9 million for utility relocation work. The Department did not exercise the option to delete the utilities portion of the contract. Jack Calandros, Prince’s chief executive, testified that Prince uses a computer program called HeavyBid, created and supported by a company called HCSS, to build the cost components of its bids. Every witness with industry knowledge agreed that HeavyBid is the standard program for compiling bids in the construction field. Mr. Calandros testified that cost components include material quotes provided by third-party vendors and quotes from potential subcontractors. Labor and equipment costs are ascertained by using historical rates and actual cost estimates that are tracked by the HeavyBid software. Prince maintains its own database of costs derived from 20 years’ experience. Mr. Calandros stated that Prince’s internal labor and equipment rates are checked and adjusted at least once a year to ensure they are current and accurate based on existing equipment and personnel. Prince received three vendor quotes for the materials to perform the utility work on Contract T7380. In compiling its bid, Prince ultimately relied on a final quote from Ferguson Waterworks (“Ferguson”) of $8,849,850. Based on this materials quote and Prince’s overall utilities bid of $16,305,903, Mr. Calandros opined that it would not be possible for Astaldi to perform the utilities component for its bid amount of $7.8 million. Prince’s estimating expert, John Armeni, reviewed Astaldi’s bid file, read the deposition testimony of Astaldi’s chief estimator, Ed Thornton, and spoke to Mr. Thornton by telephone. Mr. Armeni also reviewed Prince’s bid and the bid tabulation of all bidders’ utilities component line items. Based on his review and his extensive experience in the industry, Mr. Armeni concluded that Astaldi’s bid does not include all costs for labor, material, and equipment necessary to construct the utilities portion of this project. Mr. Armeni reviewed the materials quote from Ferguson that Prince used in its bid. He noted that Astaldi’s bid file contained an identical quote from Ferguson of $8.8 million for materials, including some non-utilities materials. Mr. Armeni noted that the Ferguson quote for utilities materials alone was approximately $8 million, an amount exceeding Astaldi’s entire bid for the utilities portion of the project. Mr. Armeni also noted that Astaldi’s overall bid was 18 percent below that of the second lowest bidder, Prince. He testified that 18 percent is an extraordinary spread on a bid where the Department is providing the quantities and all bidders are working off the same drawings and specifications. Mr. Armeni believed that the contracting authority “should start looking at it” when the difference between the lowest and second lowest bidder is more than 10 percent. In his deposition, Mr. Thornton testified he was not aware of how Astaldi arrived at its bid prices for the utility section of the project. Mr. Thornton indicated multiple times that he was not Astaldi’s most knowledgeable person regarding the bid submitted by Astaldi on Contract T7380 project. He testified that Astaldi intended to subcontract the utilities work and acknowledged that the company received a subcontractor quote of $14.9 million after the bids were submitted. Mr. Thornton did not know if Astaldi had solicited the quote. He said it is not unusual for a company to receive subcontractor bids after it has been named the low bidder on a project. Mr. Thornton conceded that Astaldi’s bid did not include all the costs necessary to construct the utilities portion of Contract T7380. At his deposition, he did not have before him the materials needed to determine which items of cost Astaldi had omitted. Mr. Thornton testified that Astaldi was not missing any information it needed at the time of bid submission and understood that its price was to include all labor, materials, and subcontracting costs to perform the contract. After the proposed bid award, Astaldi used HeavyBid to produce a report indicating that the company now estimates its cost of performing the contract at $53,708,129.03, or roughly $4.75 million more than its winning bid. Mr. Thornton testified that Astaldi nonetheless stood ready to execute the contract and perform the work at its bid price. Central to the dispute in this case is Standard Specifications Section 9, “Measurement and Payment,” article 9-2 of which is titled “Scope of Payments.” In particular, subarticle 9-2.1 provides: 9-2.1 Items Included in Payment: Accept the compensation as provided in the Contract as full payment for furnishing all materials and for performing all work contemplated and embraced under the Contract; also for all loss or damage arising out of the nature of the work or from the action of the elements, or from any unforeseen difficulties or obstructions which may arise or be encountered in the prosecution of the work until its final acceptance; also for all other costs incurred under the provisions of Division I. For any item of work contained in the proposal, except as might be specifically provided otherwise in the payment clause for the item, include in the Contract unit price (or lump sum price) for the pay item or items the cost of all labor, equipment, materials, tools and incidentals required for the complete item of work, including all requirements of the Section specifying such item of work, except as specially excluded from such payments. Prince contends that the second paragraph of subarticle 9-2.1 renders Astaldi’s bid nonresponsive because Astaldi admittedly failed to include “the cost of all labor, equipment, materials, tools and incidentals” in its bid. Prince points out that the “Technical Special Provisions” governing the utilities portion of the project reinforce the requirement that each bidder include all costs for the work. Technical Special Provisions Section 1-7.1 provides that “[p]ipe installation cost shall include all necessary work, equipment, and labor needed for installing the pipe, such as, coordination with existing utilities and support during construction and support of existing power poles during construction.” Technical Special Provisions Section 1-8.1 goes on to say that “[n]o separate payment will be made for the following items for work under this Technical Special Provision and the cost of such work shall be included in the applicable contract pay items of work,” followed by a comprehensive list of 30 items. Prince concludes that the requirement that each bidder include all costs, including costs of all necessary labor, equipment, and materials, in the Unit Price for each work item is “manifest” in the bid specifications and requires rejection of any bid that does not include all costs. Mr. Armeni opined that if one bidder excludes a portion of its costs, the other bidders are placed at a competitive disadvantage. Alan Autry, the Department’s central contracts administration manager, testified that five other projects were let as part of the bid package that included Contract T7380. He stated that it is typical for the Department to list multiple projects on one day. Mr. Autry’s office usually performs one bid letting per month, with the holiday months of November and December rolled together in a single letting. Mr. Autry stated that his office lets between 200 and 300 projects per year, not counting contracts that are let at the district level. Twenty other contracts were before the CAC at the June 29, 2016, meeting at which the Astaldi award in this case was approved. As noted at Finding of Fact 2, supra, Contract T7380 included 666 line items. Six companies submitted bids, meaning there were a total of 3,996 line items in this single contract. Assuming that the 200 to 300 other projects let by the Department’s Tallahassee office contain similar numbers, there are more than one million line items bid in any given year. If Prince’s reading of the bid specifications is correct, the Department is required to examine each of these line items and somehow make a determination whether the item includes all of the bidder’s costs. This problem of determining bidder cost is complicated by the presence of “companion” or “sister” items in bids, i.e., two items that must be considered in tandem to arrive at something like the actual cost of the work. Prince provided an example of such companion items in its analysis of the bids in this project. Two bid items included in the structures section of the bid proposal form were concrete culverts and reinforcing steel. The contractor may cast the culverts in place at the worksite or purchase them precast. If the concrete culvert is cast in place at the worksite, then reinforcing steel must be used to strengthen the culvert. If the concrete culvert is precast by a materials supplier, then the reinforcing steel has already been incorporated into the culvert at the time of installation. Mr. Calandros explained that when a contractor uses precast culverts, there is no need to list a separate additional cost for reinforcing steel; all costs are captured in the line item for concrete culverts. In this bid, Prince used precast culverts and therefore bid a penny per unit for reinforcing steel.6/ Bidders who cast the culverts in place showed a much higher cost for reinforcing steel but a lower cost for the concrete culverts. When the “companion items” were considered in tandem, the total cost for each vendor was fairly consistent. Prince’s explanation for companion items was coherent but did not explain how the Department is supposed to know which items are companion items as it undertakes the line-by-line cost examination of each bid in accordance with Prince’s reading of the bid specifications. Prince also failed to provide an explanation as to how the Department is to determine a bidder’s costs for any one line item or, for that matter, for its overall bid on a project. Bidders consider their cost information and the processes by which they build bids to be confidential proprietary information. In the instant case, Prince disclosed its own information (aside from materials costs) only under seal during litigation. In its ordinary course of business, the Department does not have access to this information. In fact, as noted at Finding of Fact 23, supra, the Department does not compare bids by component. It looks only at the total bid amount in determining the lowest bidder. Standard Specifications Article 3-8 reserves to the Department the right to perform an audit of the contractor’s records pertaining to the project upon execution of the contract. No authorization is provided to audit records of bidders prior to contracting. Standard Specifications Subarticle 2-5.1 allows bidders to indicate “free” or “$.00” for items that will be supplied at no cost to the Department. Though the Department’s practice, according to Mr. Autry, is to include zero bid items on the Notice to Contractor for confirmation of the price, subarticle 2-5.1 requires no Department investigation as to whether the bidder’s cost for a zero bid is actually zero. Bidders often bid a penny on items, as Prince did on reinforcing steel in this case. Standard Specifications Article 3-5 requires all contracts to be secured by a surety bond such that, in the event of a default by the contractor, the surety company will indemnify the Department on all claims and performance issues. Standard Specifications Section 4 provides that the scope of work is to be determined within the contract, including the furnishing of all labor, materials, equipment, tools, transportation, and supplies required to complete the work. The Department is authorized to make changes to the scope of work and make equitable adjustments of payments. If necessary, the Department may enter into supplemental agreements for additional or unforeseen work. Prince cautions that these change provisions could become relevant because Astaldi’s bid contains no information explaining how Astaldi will cover the $4.75 million difference between its bid price and its actual cost to perform the contract. Prince accurately states that nothing in Astaldi’s bid demonstrates that it has cash reserves to cover the loss and still complete the entire scope of the work.7/ Prince contends that this lack of demonstrable reserves renders Astaldi nonresponsible as to this project. Prince argues that it is error for the Department to rely on Astaldi’s certificate of qualification as proof of the company’s responsibility. The certificate of qualification process considers a contractor’s financial status at the time it submits its financial statements and other information regarding company resources. Prince contends that the Department’s assessment of the contractor’s financial statements and issuance of a certificate of qualification is insufficient to determine the contractor’s responsibility on a given bid. Prince argues that the Department is required by its governing statutes and the Standard Specifications to award a particular contract to the particular bidder that is the lowest, responsive, and responsible bidder, and that “responsible” for a given project is not synonymous with “prequalified.” Prince hypothesizes that under the Department’s practice, a bidder could possess a certificate of qualification issued in January, be indicted in another state for fraud and bribery in February, submit the lowest bid for a Department project in March, and be awarded the contract. By relying solely on the bidder’s certificate of qualification to determine responsibility, the Department could award a contract to a nonresponsible bidder. Section 337.14 provides that any person desiring to bid on any construction contract in excess of $250,000 must first be certified by the Department. Mr. Autry explained that the Department prequalifies contractors to submit bids on certain types of contract, such as major bridges and structures. Contractors applying for certification are required to submit their latest annual financial statements. The Department is charged with reviewing applications to determine “whether the applicant is competent, is responsible, and possesses the necessary financial resources to perform the desired work.” § 337.14(3), Fla. Stat. The Department assigns the contractor work classes and a total capacity after evaluating its experience and financials. The Department’s certificate is good for 18 months, though the contractor’s capacity is reviewed annually. At the time of a particular bid, the Department verifies the contractor’s available capacity, which is simply its total assigned capacity minus current work the contractor is performing for the Department. Mr. Autry testified that the Department does not go back and look at a bidder’s financials to determine whether it can sustain a loss on a given project. The Department does not repeat its capacity analysis during the year, regardless of how many projects the company bids on. The Department’s analysis is limited to whether the company’s current capacity is sufficient for the project on which it is bidding.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Transportation enter a final order dismissing Prince Contracting, LLC’s, second amended formal written protest and awarding Contract T7380 to Astaldi Construction Corporation. DONE AND ENTERED this 22nd day of December, 2016, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of December, 2016.
The Issue Whether the Department of Health and Services acted fraudulently, arbitrarily, capriciously, illegally or dishonestly in issuing an award of bid or HRS Lease No. 590:2069 to Harpaul S. Ohri.
Findings Of Fact Sometime before March, 1989, the Department of Health and Rehabilitative Services (HRS) requested and received approval from the Department of General Services (DGS) for additional office space to provide social services in the western portion of Orlando, Orange County, Florida, including a food stamp distribution office. HRS was authorized to procure, through competitive bidding, a lease for 17,250 net rentable square feet of existing office space, plus or minus 3 percent. The said lease was to provide for a full service period of seven years and two options to renew for three years each at specified rates, with occupancy no later than December 1, 1989 or 175 days after the bid award is finalized. The geographic area designated in the bid package for the office space was limited to the following area of Orange County, Florida: Beginning at the intersection of Colonial Drive and Kirkman Road to the intersection of L.B. McLeod Road, then east on L.B. McLeod Road to the, intersection of Rio Grande Avenue then north on Rio Grande Avenue to the, intersection of Colombia Street,, then east on Colombia Street to Interstate 4, then north on Interstate 4 to the intersection of Colonial Drive, then west on Colonial Drive to the point of Beginning. Public notice that HRS was seeking competitive bids was given and HRS prepared a document entitled Invitation to Bid for Existing Office Space (ITB), which set forth in detail all of HRS requirements. The purpose of the ITB was to inform all potential bidders of the minimum requirements for submitting a responsive bid, and the specific criteria by which the bids would be evaluated. Specific areas of importance to Respondent as reflected in the ITB and addressed by the evidence herein were as follows: 17,250 net rentable square feet (plus or minus 3 percent) of existing office space. General office use for use, as a client service center. Seven year term with two options to renew of three years each. 120 off-street, on-site, full size parking spots designated exclusively for use of Department employees and clients, suitably paved and lined, with a minimum of two for the handicapped. Availability of public transportation within reasonable proximity. Availability to adequate dining facilities within two miles. Photographs of the exterior front of the facility, along with documentation of present facility configuration and parking areas including access and egress to public roadways. Availability of elevator for multi-story use. i). Space requirement criteria: Minimum telephone requirements. Back-up interior emergency lighting. Three separate sets of rest rooms, male and female, one meeting the needs of the handicapped General security requirements. Specific security requirements for food stamp distribution center. Window covering over exterior widows to allow both sunlight and energy control; if bidded space without existing windows, then all rooms comprising the exterior of the building would require windows measuring approximately 24 x 36, all secured and inoperable. Full Service including all utilities and janitorial. The evaluation factors and their relative weights were stated in the ITB as follows: Evaluation Criteria The successful bid will be that one determined to be the lowest and best. All bids will be evaluated on the award factors enumerated below: Associated Fiscal Costs Rental rates for basic term of lease Evaluated using present value methodology by application of the present value discount rate of 8.69 percent. (Weighting: 25) Rental rates for optional renewal of terms of lease. Rates proposed are within projected budgeting restraints of the department. (Weighting: 10) Associated moving costs, i.e., furniture, equipment, telephone systems, etc,. (Weighting: 5) Location Proximity of offered space in central or preferred area of map boundaries. (Weighting: 10) Frequency and availability of satisfactory public transportation within proximity of the offered space. (Weighting: 10) The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on the efficient and economical conduct of the departmental operations planned for the requested space. (Weighting: 10) Facility Susceptibility of design of the space offered to efficient layout and good utilization. (Weighting 15) Provision of the aggregate square footage in a single building. Proposals will be con- sidered, but fewer points given, which offer the aggregate square footage in not more than two locations provided the facilities are immediately adjacent to or within 100 yards of each other. (Weighting: 10) TOTAL POSSIBLE 100 percent The bid package contained various bid specifications, bid evaluation criteria and the numerical weight assigned to each of those criteria. Sealed bids were submitted by three bidders, Petitioner, Harpaul S. Ohri and Kensington Gardens Builders Corp. The bids were opened on April 25, 1989, and Ernie Wilson, HRS District 7 Facilities Services Manager, determined that all three bids were responsive, and within the mandatory geographical area designated in the bid package. The District Administrator appointed a bid evaluation committee to review and grade, the responsive bids under the criteria established in the bid package, and to recommend to him the committees choice of the lowest and best bid. Four individuals who were familiar with the type of work to be done in the proposed space and familiar with the bid process were appointed to the Committee. On or about May 1, 1990 the bid evaluation committee determined that the bid of Harpaul S. Ohri was the "lowest and best bid" and submitted its determination, in writing, to the District Administrator who, subsequently approved the selection. On or about June 26, 1989, on behalf of the Department, Ernie Wilson, Facilities Services Manager, notified the bidders of the Departments intent to award the bid to Harpaul S. Ohri, as being in the best interest of the Department. The bid evaluation committee consisted of four representatives of the Department who visited two of the three bidders sites and questioned the bidders representatives. The members of the committee were familiar with the Petitioners site from previous experience. They choose not to make an on-site visit prior to completing the bid evaluation sheet, although instructed to do so on the Evaluation Committee Duties and Responsibilities/Real Property, Leasing instruction sheet. Each committee member completed an evaluation sheet and gave a higher total score to Mr. Ohri. The three major bid evaluation criteria were Fiscal Cost, Location and Facility. Under the Fiscal Cost criterion were three sub-categories: Rental Rates, Renewal Rates, and Moving Costs. For Rental Rates, Petitioner received an average of 22.7 points out of 30 possible,, while Ohri received 21.7, and Kensington Gardens received 23.7 points. The points were individually assessed by the evaluation committee, after the rental rates were compared by Ernie Wilson based on the present value analysis of bidders proposed rates. For Renewal Rates, each of the bidders, including Petitioner, received 5 points out of 10 possible. The present value analysis was not applied, as was noted in the ITB. However, even a cursory examination of the renewal rates submitted by the bidders shows that there is a 15 percent to 33 percent yearly differential in the rates, with the Petitioners rates as the lowest and Kensington Gardens as the highest. Although the committee assigned all three bidders an equal rating, the renewal rates submitted by the bidders were not equal should the Department wish to exercise its options, the rates submitted by Petitioner were substantially lower than the other two bidders and would result in a cost savings to the Department of several hundred thousand of dollars. The award factor points should not have been awarded equally. For Moving Costs, Petitioner received 5 points on each of the committee members sheets, while Ohri received 4 points and Kensington Gardens received, an average of 3.7 points. The maximum points possible was 5 points. Petitioner was awarded the maximum points because HRS is presently in the same building and no moving costs would be experienced. The other two bidders were awarded 4 points each by committee members. That determination was based on each members personal experiences. No cost or time lost data was provided or requested. The LOCATION criterion also had three sub-categories: Proximity to other governmental agencies - 10 points - with all three bidders receiving the same rating; Public Transportation -10 points - with all three ,bidders, receiving the same rating; and Environmental Factors - 10 points - out of which Petitioner received an average of 5.7 points; Ohri - 9.7 points and Kensington Gardens - 6.5 points. In considering the proximity to other governmental agencies of each of the facilities being considered, the committee relied on their own knowledge of the area. They determined that since each was within the geographical area designated in the ITB, each was equally distant from the most frequently visited government agencies in the vicinity. However, Petitioners facility is the most centrally located of the three facilities offered, while the two other facilities were considerably distant from other government agencies. The award factor points should not have been awarded equally. For Public Transportation, the committee determined that local bus service went near each of the three facilities. They were neither provided, nor did they request, route maps, schedules or passenger capacity for buses servicing each facility. Petitioners facility is centralized in the area served within the bid district, and serviced by, numerous bus lines which pass near the facility ten times per hour. The bus service to the other two facilities are limited to four buses per hour, with buses having a smaller capacity. In addition, most clients would be required to travel to the central bus terminal and transfer to a different route in order, to reach the Ohri or Kensington Gardens facilities, making bus transportation a very time-consuming process. No other form of transportation is available, except for taxi service. In addition, in order for a client to walk from the nearest bus stop to the Ohri facility, a person would cross two heavily traveled six lane streets and then walk across an open shopping center parking lot. This would require approximately a fifteen minute walk. In order to reach Petitioners facility, a client would require approximately a five minute walk utilizing public sidewalks. The committee did not consider these facts in its evaluation. The award factor points should not have been awarded equally. (c)(1). For Environmental Factors, the committee considered each buildings physical characteristics and the surrounding area. The committee, in their letter to the District Administrator, dated May 1, 1989, identified this category as "a very critical area for the new lease." The letter also stated: "The committee took the following into account when evaluating this section: Cleanliness of the building aid surrounding areas. Lack of traffic congestion by motorized vehicles close to the facility. Easiness of getting to and from the facility by vehicle. Safety for clients and staff walking to and from the facility. Upkeep of the surrounding buildings or other sections of the bidders building." The following was also taken into account when evaluating this section, but was not so stated in the letter. At least one committee member believed the lack of window space in Petitioners facility was disabling to his bid, and that the willingness of the Ohri representative to install windows on exterior walls was a significant factor in her determination of award. At least one committee member indicated that future expansion was a substantial factor in her favoring the Ohri bid, and that there was janitorial and security problems at Petitioners facility. The committee received no other information other than the committee members opinion regarding the same. The committee as a whole erroneously believed that the extra square footage visible at the Ohri facility at the time of their inspection would necessarily be available to HRS if and when it might expand its offices. Future expansion was specifically removed from the ITB at the pre-bid conference and it was clearly erroneous for them to have included this factor in their bid evaluation. The ITB specifically calls for the installation of exterior windows by the winning bid prior to occupancy. However, none of the committee members reviewed the ITB or the actual bids submitted. They relied primarily on the synopsis of the bids prepared by Ernie Wilson. The ITB states substantial general and specific security requirements in detail; however, the evaluation criteria forms do not provide a category for evaluating security other than generally under the sub-category of environmental factors. The ITB, under General Specifications and Requirements, called for the availability of adequate dining facilities within two miles of the proposed facility. The evaluation criteria did not provide a category for the committee to rate dining facility availability. In consideration of the environmental factors, the committee overlooked or failed to consider a hazardous unfenced high voltage transmission station adjacent to the Ohri facility. In addition, the photographs submitted by Ohri as the front of the building (as required by the ITB) are in fact the rear of the building which was not offered as part of the proposed leased facility. Of the three sub-categories under FACILITY, out of 15 possible points, Petitioner received an average rating of 9.5, Ohri received an average of 13.7 and Kensington Gardens received 11.2 for Layout/Utilization. Ohri received the most points because his building configuration was a, shell and was more flexible and could be reconfigured for more efficient layout to suit the Departments needs. All three bidders submitted proposals wherein the total square footage of rentable space was to be contained in a Single Building. Therefore, all three bidders received the maximum 10 points. A maximum 5 points was provided for facilities with Street-level space. All three bidders were awarded the maximum 5 points. However, a portion of Petitioners space was offered on the second floor, a fact which the committee overlooked. The Petitioner should not have received the full 5 points for having street-level space. The unanimous recommendation of the evaluation was to award the lease to Ohri. In reaching that conclusion, the committee did not properly utilize the weighted bid criteria and, in addition, included improper bid considerations in their evaluation of the three facilities. Some of the reasons given by the committee for distinguishing and preferring one bid over another were rational and reasonable considerations and were covered by the bid evaluation criteria. However, others were erroneous and improper.
Recommendation Based on the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that the Secretary of the Department of Health and Rehabilitative Services enter a Final Order rejecting all bids for lease number 590:2069 and issue a new invitation to bid. DONE AND ENTERED this 12th day of February, 1990, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of February, 1990. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Proposed Findings of Fact submitted by the Petitioner: Accepted: paragraphs 1, 2, 3, 5, 6, 7, 9 (in substance, except for subparagraphs f, g, j and k which are not relevant), 10 (in substance), 12(a), (b), (f-in substance), (g-in substance), (h-in substance), (j), (k-in substance), (l-in substance), (p-in substance). Rejected: Not relevant: paragraphs 4, 12(c), (d), (e), (m), (n), (o), (p- the proposed future location of the Greyhound Station; insure wooded area nearby), (q), (r). Argument: paragraphs 11 and 13. Procedural matters, covered in the preliminary statement: paragraphs 8 and 14. Respondent did not submit proposed findings of fact. COPIES FURNISHED: Terrence W. Ackert, Esquire 201 East Pine Street Suite 1402 Orlando, Florida James Sawyer, Jr., Esquire District 7 Legal Counsel Department of Health and Rehabilitative Services 400 West Robinson Street Orlando, Florida Sam Power Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John Miller General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
Findings Of Fact 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
