The Issue Whether the Board of Professional Engineers should penalize Respondent because of negligence in the practice of his profession.
Findings Of Fact Respondent Mr. Walker holds professional engineer's license no. P.E. 40276. His license was issued by the Florida Board of Professional Engineers. During times pertinent he was employed by the U.S. Army Corps of Engineers (Corps). The Corporation is charged with providing investigative and prosecutorial services to the Board in accordance with Sections 455.32, 471.005(9), and 471.038, Florida Statutes. The Board has the authority to assess penalties against professional engineers pursuant to Section 471.033(3), for violations of Section 471.033(1). Mr. Walker has been the Resident Engineer, Construction Division, with the Corps at Hurlburt Field, Florida during all times pertinent. Hurlburt Field is a U. S. Air Force Base. The Corps of Engineers administers major construction projects at Hurlburt Field. During times pertinent Mr. Walker supervised about eight people. In late 2001 or early 2002, the Corps awarded a contract to widen Cody Road and Independence Road, which are located on the premises of Hurlburt Field. Both required the relocation of water lines. The Corps gave a design contract for the road widening project to an architect engineer firm named JE/Sverdrup, of Jacksonville, Florida. JE/Sverdrup prepared an Application for a Public Drinking Water Facility Construction Permit for submission to the Florida Department of Environmental Protection (DEP). DEP was involved in this construction contract because it required the relocation of over 5,000 linear feet of potable water lines. The person who actually signed the permit application was Ronald J. Lowe, Professional Engineer, for a permittee identified as Colonel Timothy Boone, U. S. Air Force. The permit request was submitted to DEP on May 24, 2001. Base Civil Engineering acted as liaison with DEP through its employee Andrea Bishop (Ms. Bishop). The Corps, and Mr. Walker, had no contact with DEP. Permit/Certification No. 0184807-001-DS/C, addressing the road widening project, was granted on June 15, 2001. DEP expected the permit to be closed out upon completion of the construction or upon completion of part of the construction. In order to close out a permit, DEP required a certification by a licensed professional engineer, to the effect that the construction was in accordance with the plans submitted with the permit; that the record drawings for the substantially completed portions of the project were adequate; and that all deviations from the construction permit were indicated, must be provided. Also, a satisfactory analysis of bacteriological samples must be provided. On August 16, 2002, subsequent to the completion of substantial construction work, a Certification of Construction Completion and Request for a Letter of Clearance to Place a Public Drinking Water Facility into Service (Certificate of Completion) was signed by Lieutenant Colonel Jeffrey L. Pitchford, Commander, 16th Civil Engineer Squadron. During the course of construction of this project, Lieutenant Colonel Pitchford, at least weekly toured the sites with Mr. Walker. Lieutenant Colonel Pitchford was aware of what the status of the project was on an on-going basis. At the time the Certificate of Completion was fully executed, work on Independence Road had been completed. Work on Cody Road had not been completed. Lieutenant Colonel Pitchford was aware of that fact. The Certificate of Completion contained attachments that included pressure gauge information, bacterial test results, and red line "as built" drawings. The pressure gauge information said that the tests were conducted on Independence Road. The red line "as built" drawings submitted were drawings of Independence Road. The bacterial analysis does not reveal on what road samples were taken. A careful reading of the Certificate of Completion, as submitted, reveals that it addresses only the completion of Independence Road. The Certificate of Completion is divided into four parts. Part I is entitled "Project Name and Construction Permit Number, Permittee, Etc." It identifies the project and the permit number, among other items of information. Ms. Bishop, the Compliance Program Manager, at Base Civil Engineering at Hurlburt Field, completed Part I of the form. As representative of the U. S. Air Force, Ms. Bishop is the only liaison to DEP. There is no controversy with regard to the manner in which Part I was completed. Upon completion of Part I, Ms. Bishop, in accordance with established procedure, sent the Certificate of Completion to the Corps. Mr. Walker executed Part IV and returned it to Ms. Bishop. Thereafter, Parts II and III were executed by Lieutenant Colonel Pitchford, as described below. Part II of the Certificate of Completion is entitled "Statement by Permittee." The person who signed Part II, Lieutenant Colonel Pitchford, certified as authorized representative of Hurlburt Field, that the contractor had furnished Hurlburt Field with record drawings for the substantially completed portion of the project and that record drawings were available in his office. Lieutenant Colonel Pitchford also certified that, "if this project involves the construction of any new or altered treatment facilities, an operation and maintenance manual for the new and altered treatment facilities included in the substantially completed portion of this project is available for review at the site of the new and altered treatment facilities." Lieutenant Colonel Pitchford signed Part II on August 16, 2002. Part III is entitled "Statement by Owner/Operator of Project After It Is Placed into Service." This was signed by Lieutenant Colonel Pitchford. In this part he certified that as representative of Hurlburt Air Force Base, he will be the owner/operator after it is placed in service. He also certified that he received a copy of the record drawings and that they were available for his review at his command. Part III of the Certificate of Completion also stated that the project, 0184807-001-DS/C, was substantially complete. This block was signed by Lieutenant Colonel Pitchford on August 16, 2002. As noted earlier, when Mr. Walker executed Part IV, Parts II and III were not completed. Part IV of the Certificate of Completion is entitled, "Certification of Construction Completion by Professional Engineer in Responsible Charge of Inspecting Construction of Project." Part IV was executed by Mr. Walker on August 15, 2002. By his signature he certified that as a professional engineer in Florida he was responsible for inspecting the construction of the road widening project in order to determine if the work "is proceeding in compliance with the construction permit and approved plans and specifications." In Part IV of the Certificate of Completion he also certified that, ". . . the substantially completed portion of this project has been constructed in accordance with the construction permit. . . ." Moreover, he certified, among other things, that the record drawings for the substantially completed portion of the project are accurate, and, that to the best of his knowledge all water mains have been disinfected and bacteriologically tested in accordance with certain DEP rules. He certified that the certification was based upon an on-site observation. Importantly, Part IV, signed by Mr. Walker, also asserted that, "This certification does not necessarily constitute a certification of final completion of construction. Additional construction may be needed to satisfy all conditions of the construction contract documents." Part IV has an inked stamp impression upon it, which was also signed by Mr. Walker, which averred that the project was designed by the Mobile District of the U. S. Army Corps of Engineers and that the initials or signatures on the document were made within the scope of his employment. The fully executed Certificate of Completion was submitted to DEP by Ms. Bishop. Mr. Walker was not involved in submitting it. DEP received the Certificate of Completion and erroneously concluded that both the Cody Road Project, as well as the Independence Road project, had been completed. Accordingly, they closed out the project. Subsequently, a former employee in Mr. Walker's Office sent letters to government agencies asserting that due to Mr. Walker's negligence, impure water had been provided to personnel at Hurlburt Air Force Base. This was investigated. The investigation determined that impure water had not been provided to those using the potable water system on the base. Because of the erroneous assumptions made by DEP based on the Certificate of Completion, the permitting process was reviewed by DEP, the Corps, and the U. S. Air Force. It was determined that Hurlburt's permit certification process needed review because the erroneous conclusions drawn by DEP were the result of systemic problems with the procedures used. Following this review, Hurlburt Air Force Base developed a new Standing Operating Procedure, so that this type of error and miscommunication might be avoided in the future. This was sent to DEP on December 8, 2003. DEP revised their Certificate of Completion form effective August 28, 2003. The revision was not done solely because of the incident with the form used in the Hurlburt Field construction. When Mr. Walker signed Part IV of the Certificate of Completion, the only other part of the form that was completed was Part I. The information certified by Mr. Walker was entirely correct and truthful. Moreover, the language in Part IV specifically noted that, "This certification does not necessarily constitute a certification of final completion of construction." Dr. Chen H. Lin is a professional engineer with an ecology and environmental consulting firm. He is a graduate of a university in Taiwan with a Bachelor in Civil Engineering degree, has a Master in Civil Engineering degree from Auburn University, and a Ph.D. in Environmental Engineering from the University of Florida. He is licensed as a professional engineer in Florida, Alabama, South Carolina, and Michigan. He was accepted as an expert in civil engineering and in the permitting process with DEP in reference to water, waste-water, and waste-water treatment. It is Dr. Lin's opinion that Mr. Walker did not exercise due care and was negligent as a professional engineer because he filled out and signed Part IV of the Certificate of Completion at a time when Parts II and III were blank. Dr. Lin is a credible expert witness and his testimony is given great weight as to generally accepted standards applicable to professional engineers. However, his experience with specific military procedures is limited. Therefore, his opinion that Mr. Walker was negligent is rejected because of the factual context and procedures that existed at the time within the Corps and Base Civil Engineering at Hurlburt Field. James J. Mallett is a registered professional engineer in Florida and has been since 1963. He is also licensed in Alabama, Georgia, Tennessee, and Louisiana. He graduated from Auburn University in 1955 and received a Master of Civil Engineering degree from the University of Illinois. He also has a Master of Business Administration degree from the University of Alabama at Birmingham. Mr. Mallett has worked in the area of water system projects in many states and with the military and the U. S. Army Corps of Engineers since the late 1970s. He has worked on water projects at Hurlburt Field and is familiar with the processes used there. It is his opinion that it is standing operating procedure at Hurlburt to complete the Certificate of Completion in the manner in which the form at issue was completed. It is his opinion that Section IV does not imply that the project is completed and that if DEP had read the form closely they would have known that the Certificate of Completion addressed only Independence Road. Mr. Mallett believes the form is confusing. He does not believe that it was negligent for Mr. Walker to sign Part IV prior to the completion of Parts II and III. Mr. Mallett's testimony is more credible than the testimony of Mr. Lin as to the presence or absence of negligence, because Mr. Mallett is more familiar with the specific procedures used at Hurlburt Field and military construction projects in general. It is his opinion that Mr. Walker's actions, in the context of the procedures employed at Hurlburt Field, were entirely correct and were not negligent. This opinion is accepted as fact. Ms. Bishop's testimony provided the actual cause of the error, which was a result of the lack of communication among the Corps and the Base Civil Engineering Section and herself.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Florida Board of Professional Engineers enter a final order dismissing the Administrative Complaint against Mr. Walker. DONE AND ENTERED this 22nd day of September, 2005, in Tallahassee, Leon County, Florida. S HARRY L. HOOPER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of September, 2005. COPIES FURNISHED: Douglas D. Sunshine, Esquire Florida Engineers Management Corporation 2507 Callaway Road, Suite 200 Tallahassee, Florida 32303-5267 Pamela A. Moine, Esquire Assistant United States Attorney Northern District of Florida 21 East Garden Street, Suite 400 Pensacola, Florida 32502 Paul J. Martin, Executive Director Florida Board of Professional Engineers 2507 Callaway Road, Suite 200 Tallahassee, Florida 32303-5256 Leon Biegalski, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
The Issue Whether Petitioner is entitled to licensure by endorsement, pursuant to Section 489.115, Florida Statutes (2003).
Findings Of Fact On or about April 4, 2003, Petitioner applied for a certified plumbing contractor's license by endorsement. Applicants who seek a licensure by endorsement must have passed an examination that is substantially equivalent to the examination given in Florida or hold a license in another state or territory of the United States where the criteria for issuance of the license is substantially equivalent to Florida's criteria. At all times relevant to this proceeding, Petitioner was licensed or certified as a plumber in Georgia, Alabama, and Tennessee. For the purpose of his application for licensure by endorsement, Petitioner submitted information to the Board regarding the examination he took in Georgia. Petitioner was not precluded from submitting information regarding the examinations he took in Alabama and Tennessee. However, Petitioner submitted the information regarding the examination he took in Georgia because it was the one he had taken most recently. Georgia gives three different plumbing examinations and issues three different plumbing licenses. One examination is for a journeyman's license. Another examination is for a Class I restricted plumbing license. Still, another examination is given for a Class II unrestricted plumbing license. In order to obtain his plumbing license in Georgia, Petitioner successfully completed the Class I Restricted Georgia Examination (Georgia Examination). Florida issues only one certified plumbing contractor's license and that license is the equivalent of Georgia's Class II unrestricted plumbing license. To meet the examination requirement for licensure as a plumber in Florida, an applicant must successfully complete the Certification Examination for Plumbing Contractors (Florida Examination or Certification Examination for Plumbing Contractors). Stephen Allen, a psychometrician employed by the Department of Business and Professional Regulation, evaluated the Georgia Examination to determine if it were substantially equivalent to the Florida Examination. In determining whether the Georgia Examination and the Florida Examination were substantially equivalent, Mr. Allen considered and compared the material covered; the emphasis placed on various topics; the actual content of the examinations; the general characteristics of the examination; the number of questions; the amount of time allowed to complete the examination; the weight given to various areas or categories of the examinations; and the method of measuring knowledge in the various content areas. Based on a comprehensive review and analysis of the Georgia Examination and the Florida Examination, Mr. Allen properly determined that the Georgia Examination was not substantially equivalent to the Florida Examination. The area in which the examinations are significantly different is the isometric area or category. First, the relative weight on the isometric area of the examinations varies greatly. On the Florida Examination, the weight given to the isometric area is 31 percent. On the Georgia Examination, the weight given to the isometric area is, at most, only 6 percent. Second, the knowledge of isometrics is measured differently on the examinations. The Florida Examination requires that the candidate demonstrate knowledge of isometrics by having the candidate draw five different isometric drawings, which show the room's plumbing based on the fixtures to be installed. The five drawings are graded on legibility, orientation, flow, angles, piping, labeling, and vents. The Georgia Examination is a multiple choice examination and measures knowledge of isometrics by the candidate's selecting the correct answer from four possible answers. The Georgia Examination successfully completed by Petitioner to obtain his master plumber's restricted license is not substantially equivalent to the Florida Examination. Petitioner is ineligible for licensure by endorsement because the examination he took in Georgia is not substantially equivalent to the Florida Examination.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Construction Industry Licensing Board enter a final order denying Petitioner's application for licensure by endorsement. DONE AND ENTERED this 15th day of December, 2003, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of December, 2003. COPIES FURNISHED: Barbara Rockhill Edwards, Esquire Department of Legal Affairs The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 William Lantrip 927 Lakewood Drive Dunedin, Florida 34698-7218 Timothy Vaccaro, Executive Director Construction Industry Licensing Board Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Nancy Campiglia, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
The Issue The issue in this case is the amount of attorney's fees and costs Petitioner, Florida Cities Water Company, should be awarded pursuant to Section 120.595(5), Florida Statutes (Supp. 1996).
Findings Of Fact The Parties. Petitioner, Florida Cities Water Company (hereinafter referred to as "Florida Cities"), is a utility providing water and wastewater service to two communities in Florida. Respondent, the Florida Public Service Commission (hereinafter referred to as the "PSC"), has exclusive jurisdiction over water and wastewater service utility providers in Florida, including the determination of rates that utility providers may charge for their services. Section 367.011, Florida Statutes (1995). Florida Cities' 1992 Approved Rate. In arriving at an allowable rate which a water and wastewater service utility may charge, the PSC must determine, among other things, the amount of a utility's plant that is considered "used and useful." Section 367.081(2)(a), Florida Statutes (1995). In determining the amount of Florida Cities' plant that was considered "used and useful" in 1992, the PSC determined the amount of investment costs in its North Fort Myers, Florida, plant which was potentially recoverable. Recoverable costs are limited to those expenditures which are considered to be for the public benefit. Florida Cities' recoverable costs as of 1992 were determined to total $6,343,868.00. The amount of Florida Cities' recoverable costs was then multiplied by a fraction, the numerator of which was the average daily flow of the plant (calculated on a peak month basis) and the denominator of which was the capacity of the plant (this fraction is hereinafter referred to as the "Capacity Ratio"). In 1992, the average daily flow of the plant on a peak month basis was determined to be in excess of 1.0 million gallons per day (hereinafter referred to as "MGD"), and the capacity of the plant was determined to be 1.0 MGD. Therefore, the Capacity Ratio was determined to be 100 percent and Florida Cities' recoverable costs of $6,343,868.00 was determined to be 100 percent "used and useful." Florida Cities' "rate base" for 1992 was, therefore, determined to be $6,343,868.00. Florida Cities' 1995 Application for Rate Increase and the PSC's Reduction of Rate Base. Subsequent to the determination of Florida Cities' rate base and its approved utility rates in 1992, Florida Cities was required by the Florida Department of Environmental Protection (then known as the Florida Department of Environmental Regulation)(hereinafter referred to as "DEP"), to expand its North Fort Myers plant. As a result of DEP's action, Florida Cities incurred additional plant costs of approximately 1.6 million dollars. As a consequence of having incurred additional plant costs, Florida Cities requested that the PSC treat the additional costs, plus other costs incurred by Florida Cities since 1992, as recoverable costs and as an addition to its rate base. Florida Cities' application was filed in 1995. After consideration of Florida Cities' application for rate increase, the PSC issued a Notice of Proposed Agency Action Order Granting Final Rates and Charges on November 2, 1995. In this order the PSC essentially determined that all additional plant expansion costs incurred by Florida Cities constituted recoverable costs. The PSC also determined that Florida Cities' Capacity Ratio was 100 percent and, therefore, all of its recoverable costs was treated as "used and useful." The decision of the PSC resulted in an increase of Florida Cities' utility rate of approximately 17.89 percent. The proposed decision of the PSC was, however, challenged and proceeded to hearing before the PSC. On September 10, 1996, the PSC entered a Final Order Denying Application for Increased Wastewater Rates, Reducing Rates, Requiring Refund and Requiring Reports (hereinafter referred to as the "PSC Final Order"). In the PSC Final Order, the PSC treated all of the 1.6 million dollars in costs associated with the expansion of the plant required by the DEP as recoverable costs. The PSC, however, reduced the Capacity Formula to 65.9 percent. This resulted in a reduction in Florida Cities' rate base of approximately 2.4 million dollars. The reduction in the Capacity Formula to 65.9 percent was caused, in part, by the manner in which the PSC determined the numerator of the Capacity Formula. The PSC modified the manner in which it calculated the numerator of the Capacity Formula: Instead of using the average daily flow calculated on a peak month basis, it used the average daily flow calculted on an annual basis (to which it added a "reserve" of 4.58 percent) . . . . The reduction in the Capacity Formula from 1992 to 1995 was also caused by the plant capacity figure used by the PSC. The PSC used a permitted capacity of 1.5 MGD instead of the actually designed and built capacity of 1.25 MGD. Florida Cities had urged use of the 1.25 MGD actual capacity figure. As a result of the PSC's conclusion that only 65.9 percent of the amount of recoverable costs was used and useful, Florida Cities' rate base was reduced to $5,525,915.00, a decrease of Florida Cities' used and useful plant as determined in 1992 of over $800,000.00. Although the PSC included the additional costs incurred by Florida Cities in order to comply with DEP regulations, the PSC's use of a Capacity Ratio of 65.9 percent to determine the amount of the recoverable costs considered used and useful had a net effect of disallowing approximately 2.4 million dollars in proposed rate base (1.6 million dollars incurred to meet DEP regulations plus the $800,000.00 reduction of 1992 rate base). Florida Cities' Appeal of the PSC's Final Order. Florida Cities appealed the PSC Final Order to the District Court of Appeal, First District (hereinafter referred to as the "First District Court"). Florida Cities Water Company v. Florida Public Service Commission, 23 Fla. L. Weekly D238 (Fla. 1st DCA January 12, 1998). On appeal, Florida Cities raised two grounds for reversal of the PSC's Final Order: The Capacity Ratio used by the PSC to determine the amount of its recoverable costs which was considered used and useful was flawed. Florida Cities urged the First District Court to increase its Capacity Ratio to 100 percent; and The PSC should have included all costs Florida Cities had incurred in order to comply with DEP regulations as part of its rate base without regard to the Capacity Ratio. Florida Cities argued that the 1.6 million dollars it had incurred to comply with DEP regulations should be included as part of its rate base without regard to what the Capacity Ratio was determined to be. Florida Cities' challenge to the Capacity Ratio used by the PSC was based upon two alleged errors: The PSC's use of permitted capacity of 1.5 MGD was improper. Florida Cities argued that the PSC should have used actual plant capacity of 1.25 MGD; and The method elected by the PSC to determine the average daily flow of the plant was a novel and unexplained deviation from past PSC policies. Florida Cities argued that the PSC should have continued to determine average daily flows based upon a peak month basis rather than an annual basis. As to the 1.6 million dollars in costs Florida Cities sought to have included in its rate base, Florida Cities' two arguments were alternative theories advanced to support the same end: 100 percent inclusion of the 1.6 million dollars it had incurred as a result of meeting DEP regulations. While the two arguments were interrelated with regard to the starting point (it had spent 1.6 million dollars on plant) and the result Florida Cities was attempting to achieve (inclusion of 1.6 million dollars in rate base), the two arguments involved different methods of reaching the desired result: (a) direct inclusion; or (b) inclusion through an increase in the Capacity Ratio. As to the remaining $800,000.00 reduction in Florida Cities' rate base, only one of the arguments raised by Florida Cities applied to this amount: the argument that the Capacity Ratio utilized by the PSC was flawed. The First District Court's Decision. The First District Court agreed with Florida Cities' contention that the Capacity Ratio used by the PSC was flawed. The First District Court found that both the calculation of the numerator and the denominator of the Capacity Ratio by the PSC was in error. With regard to the numerator, the First District Court concluded that the PSC's determination of average daily flows by using annual flows constituted a shift in agency policy which was "'unsupported by expert testimony, documentary opinion, or other evidence appropriate to the nature of the issue involved.'" The First District Court remanded the matter to the PSC to "give a reasonable explanation, if it can, supported by record evidence (which all parties must have an opportunity to address) as to why average daily flow in the peak month was ignored." With regard to the denominator, the First District Court opined that "no competent evidence of any substance supports the PSC's determination" of plant capacity. The First District Court concluded that the denominator should be 1.25 MGD. The First District Court rejected Florida Cities' contention that amounts it had expended to comply with DEP regulations should be included in its rate base without regard to the Capacity Ratio. The First District Court concluded that the 1.6 million dollars spent to comply with DEP regulations could be included in rate base "only to the extent the improvements they effect or the facilities to which they relate are 'used and useful in the public service.'" The ultimate impact of the First District Court's decision depends upon what action the PSC takes on remand with regard to determine the appropriate numerator for the Capacity Formula. The PSC issued an Order of Remand on April 14, 1998. In the Order of Remand, the PSC indicated its position that the decision of the First District Court regarding flows was "an invitation" to take additional testimony and evidence on the issue. The PSC, therefore, reopened the record and scheduled a second evidentiary hearing to determine how average daily flows should be calculated. Florida Cities filed a Motion to Stay the PSC's second evidentiary hearing, pending resolution of an appeal of the PSC Order of Remand. Until a final determination is made concerning the intent of the First District Court in remanding the matter to the PSC, it cannot be absolutely concluded what the "result obtained" in this case will be. The parties have, however, assumed for purposes of the matter that the Capacity Ratio should be approximately 98.6 percent. That is the best "result" which can be obtained by Florida Cities in this matter. Florida Cities' Motion for Attorney's Fees. As part of its appeal, Florida Cities also filed a Motion for Attorney's Fees. Florida Cities sought an award of attorney's fees pursuant to Section 120.595(5), Florida Statutes (Supp. 1996). In particular, Florida Cities requested that the First District Court: Grant attorneys [sic] fees to Appellant for this appeal; Remand this case to the Division of Administrative Hearings to determine attorneys fees; and Grant such other relief as the Court may deem appropriate. The First District Court entered the following order on Florida Cities' Motion for Attorney's Fees: The motion by appellant for attorney's fee is granted. If the parties are unable to agree on an amount of attorney's fees, the question should be referred to the Division of Administrative Hearings. The Parties' Effort to Agree. Florida Cities submitted copies of invoices to the PSC documenting the attorney's fees and costs incurred by it in connection with the appeal of the PSC's Final Order. Florida Cities proposed several findings of fact, which are hereby accepted by reference, relating to the manner in which it determined attorney's fees and costs. Those findings of fact include paragraphs 27 through and including 32. The PSC reviewed the invoice copies submitted by Florida Cities and stipulated and agreed that the number of hours and the hourly rates attributable to the appeal of the PSC Final Order were reasonable. The parties stipulated that the total amount of attorney's fees and costs incurred by Florida Cities on the appeal of the PSC Final Order amounted to $74,648.14. On March 18, 1998, the PSC and Florida Cities filed a Joint Petition for Resolution of Attorney's Fees with the Division of Administrative Hearings. The parties stipulated in the joint petition that they had negotiated in good faith but were unable to agree on the amount of attorney's fees which should be paid to Florida Cities. The parties stipulated and agreed that $74,648.14 is the appropriate lodestar figure. The parties were unable to agree, however, whether the lodestar figure should be adjusted in light of the "results obtained" by Florida Cities on appeal. Therefore, consistent with the order of remand from the First District Court, the matter was referred to the Division of Administrative Hearings for the limited purpose of determining whether the agreed upon lodestar figure of $74,648.14 should be reduced based upon the "results obtained" by Florida Cities on appeal. The "Result Obtained" on Appeal. On appeal, Florida Cities argued that it was entitled to a total increase in its rate base of approximately 2.4 million dollars: (a) the 1.6 million dollars it expended to comply with DEP regulations; and (b) the $800,000.00 reduction in rate base which resulted from the PSC's modification of the Capacity Ratio. In effect, Florida Cities argued that it should be allowed to treat 100 percent of its recoverable costs as its rate base. As a result of the First District Court's decision and assuming a Capacity Ratio of 98.6 percent will be achieved, Florida Cities was successful on appeal in increasing its rate base by approximately 2.2 million dollars. Of this amount, approximately $879,000.00 was attributable to the First District Court's conclusion that the PSC had used the incorrect plant capacity. The remaining 1.3 million dollars was attributable to the First District Court's conclusion that the methodology used by the PSC to determine average annual daily flows was a policy change which was unsupported by the record. Had Florida Cities succeeded on both issues it raised on appeal, it would not have resulted in any appreciable increase in Florida Cities' rate base over the increase in rate base allowed by the First District Court. A utility plant cannot be treated as used and useful in excess of 100 percent of its costs. The two issues Florida Cities raised on appeal, at least as to the 1.6 million dollars it was required to expend to meet DEP regulations, were alternative theories for achieving the same result: total inclusion of the 1.6 million dollars in its rate base. Florida Cities contended that the 1.6 million dollars should have been included directly in its rate base because it was required to make the expenditure by a government agency. In the alternative, it argued that the Capacity Ratio used to determine the amount of recoverable costs considered used and useful should have been increased to 100 percent. This alternative argument would also have resulted in inclusion of the 1.6 million dollars in its rate base. Regardless of which argument was accepted by the First District Court or whether the First District Court had accepted both arguments, Florida Cities could not have achieved any substantially greater result than it did. As to the remaining $800,000.00 reduction in 1992 rate base, Florida Cities' argument concerning the direct inclusion of amounts required to be expended to comply with DEP regulations did not relate to this amount. Only Florida Cities' two-pronged argument concerning the Capacity Ratio supported Florida Cities' argument that its rate base should be increased by this amount. Florida Cities' arguments concerning this amount was successful. I. The Consequences of Florida Cities' Failure to Prevail on All Issues. Had Florida Cities prevailed in its contention that costs incurred as the result of meeting government requirements should be included directly in rate base, such a decision would have had significant consequences to most, if not all, utilities in Florida. Such a decision would also have probably had an impact on future rates approved for Florida Cities. Having failed to prevail on this issue, however, prevented the application of this theory by other utilities in Florida to the determination of their rate bases and to the determination of the appropriate rate base for Florida Cities in the future. The loss of the benefit to other utilities and Florida Cities in future rate cases, which would have occurred had Florida Cities prevailed, did not have any impact on the "results obtained" by Florida Cities in the immediate proceedings. While the failure of the argument and the avoidance of the impact on rate-making, which would have resulted had Florida Cities prevailed, was of great consequence to the PSC, the rejection of the argument by the First District Court did not reduce the result Florida Cities hoped to have obtained on appeal. J. Attorney's Fees and Costs of Proceedings Before the Division of Administrative Hearings. Florida Cities incurred attorney's fees and costs in the instant proceeding before the Division of Administrative Hearings. Florida Cities has sought recovery of those fees and costs. The parties have not agreed upon the appropriateness of the inclusion of such fees and costs. Mr. Schiefelbein acted as lead counsel during the attorney's fees phase of this matter. As of April 23, 1998, four days before the hearing before the Division of Administrative Hearings, Florida Cities had incurred the following attorney's fees during the attorney's fees phase of this matter: Attorney Hourly Rate Total Fees Mr. Schiefelbein $150.00 $6,135.00 Mr. Gatlin $175.00 490.00 Ms. Cowdery $150.00 37.50 Total $6,662.50 It was estimated that an additional 22 hours of Mr. Shiefelbein's time would result in an additional $3,300.00 of fees attributable to completion of the attorney's fees phase of this proceeding "through a Final Order of the Administrative Law Judge." This estimate was based upon 4 hours for witness preparation, 4 hours for other hearing preparation, 4 hours to attend the hearing, and 10 hours for review of the hearing transcript and submittal of a proposed order. The hourly rate charged by counsel for Florida Cities for the attorney's fees phase of this proceeding was reasonable and a combined total of 66 hours to complete this phase of the proceeding was a reasonable number of hours to pursue this matter. Mr. Melson, an expert witness for Florida Cities in this proceeding, charged $220.00 per hour for his preparation for and attendance at the hearing before the Division of Administrative Hearings. Mr. Melson spent 2.6 hours preparing for the hearing and 2.5 hours attending the hearing. Mr. Melson's fee amounted to $1,122.00. Mr. Seidman, another expert witness for Florida Cities, charged an hourly rate of $90.00 and spent 20.75 hours in preparing for and attending the hearing. It was stipulated that Mr. Seidman's total fee of $1,867.50 was reasonable. Although Florida Cities did not argue that all fees and costs incurred by it during the attorney's fees phase of this proceeding should be recovered, it did seek recovery of the foregoing fees and costs. Those fees and costs totaled $12,952.00.
The Issue The issues in this bid protest are whether, in making a preliminary decision to award a staff augmentation contract, Respondent acted contrary to a governing statute, rule, policy, or project specification; and, if so, whether such misstep(s) was/were clearly erroneous, arbitrary or capricious, or contrary to competition.
Findings Of Fact The parties' Joint Pre-Hearing Stipulation2 and the evidence presented at final hearing established the facts that follow. The Request for Proposals On July 26, 2001, the District issued Request for Proposals C-11940 (the "RFP"). The purpose of the RFP, as set forth on page one thereof, was to solicit technical and cost proposals from qualified respondents [for a staff augmentation contract.3] The South Florida Water Management District (District) is interested in establishing a single qualified information systems/technology contracting firm to provide the services defined herein on an as-needed basis. Contingent upon the responses received as a result of this Request for Proposals (RFP), the District will determine which respondent meets the required standards and qualifications through an evaluation process. The Vendor meeting the required standards and qualifications will be determined to be “pre-qualified” to provide information systems/technology services to the District. The deadline for submission of proposals in response to the RFP was Monday, August 27, 2001 at 2:30 p.m. Section 1.12 of the RFP, which is relevant to this protest, stated as follows: REJECTION OF RESPONSES The District reserves the right to reject any and all responses when such rejection is in the District's interests. Minor irregularities contained in a response may be waived by the District. A minor irregularity is a variation from the solicitation that does not affect the price of the contract or does not give a respondent an advantage or benefit not enjoyed by other respondents, or does not adversely impact the interests of the District. The District further reserves the right to cancel this solicitation at any time if it is in the best interest of the District to do so. Section 1.13 of the RFP stated, in pertinent part:
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the District enter a Final Order that declares DUA’s proposal to be materially non-responsive and, accordingly, rescinds the proposed award to DUA. In addition, while recognizing that the choice of remedies for invalid procurement actions is within the agency’s discretion, it is nevertheless recommended that, rather than reevaluate or reject all responsive proposals, the District award the contract to the highest-ranked responsive proposer, Syslogic. DONE AND ENTERED this 18th day of January, 2002, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 18th day of January, 2002.
The Issue The issue is whether Respondent's decision to reject all proposals on RFP No. 008-02 to design and build an ancillary building at the Tampa Service Office was arbitrary, as alleged by Petitioner.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: On May 21, 2002, Respondent, Southwest Florida Water Management District (District), through its contracts manager, issued an Invitation to Proposal inviting interested persons to submit competitive sealed proposals on Request for Proposal No. 008-02 (RFP No. 008), which called for the design and construction of an ancillary building at its District Service Office (Tampa Service Center) located at 7601 Highway 301 North, Tampa, Florida. The proposed facility is an approximately 5,000 square foot metal building which will house the District's field staff. The last paragraph of the document provided that "[t]he District shall reserve the right to reject any or all bids/proposals received with or without cause." On May 24, 2002, the District placed an advertisement of its Invitation to Proposal in three local newspapers in Hillsborough County. The last paragraph of each advertisement also provided that the District reserved the right to reject all bids with or without cause. A mandatory pre-proposal conference was held on June 6, 2002, which was attended by various interested persons, including Petitioner, Paul J. Sierra Construction, Inc. (Sierra), a large construction firm located in Tampa, Florida. Although Sierra engages in general construction, it also has a division which specializes in projects using Butler building systems. A Butler building utilizes a combination of a metal roof with a pre-engineered structural system. At the pre-proposal meeting, Sierra requested a copy of RFP No. 008-02, which contained the general conditions for the project, nature of the services required, insurance requirements, and evaluation procedures. Section 1.13 of that document provided in relevant part that "the District reserves the right to reject all proposals and not grant any award from the issuance of this RFP." Five proposals, including Sierra's, were received and opened on June 26, 2002. All proposals were reviewed and independently scored by a three-person selection committee composed of District staffers. Although Sierra's proposal of $374,038.00 was not the lowest dollar amount submitted, it received the highest numerical score of 279, edging out two other proposers who both received scores of 277. The lowest dollar proposal submitted was $337,000.00. Under the process in place, the selection committee then referred the results of its evaluation to a three-person Facilities Ad Hoc Committee (Committee), comprised of the Governing Board's chairman, Mr. Ronnie E. Duncan, the Governing Board's vice-chairman, Mr. Thomas D. Dabney, II, and the treasurer of the Governing Board, Watson L. Haynes, II. The Committee was delegated the authority to reject any proposal without further action by the District's Governing Board; however, approval of a proposal had to be confirmed by the Governing Board. Committee members Duncan and Dabney are developers with extensive experience in construction while Mr. Haynes has a background in accounting. The Committee was formed in late 2001 for the purpose of achieving more efficiencies in the construction process, particularly in light of a newspaper's criticism of the money spent by the District while renovating Building 2 at its Brooksville office. The Committee was not obligated to accept the selection committee scoring. Rather, the Committee had a duty to make the ultimate decision as to how taxpayer dollars are best spent. The Committee met on July 30, 2002, to consider the results of the evaluation. Mr. Haynes was not present. The two other members voiced concerns regarding the cost of Sierra's proposal, which was more than $74.00 per square foot. For that reason, the Committee continued the decision on awarding the contract to its next meeting on August 28, 2002. It also requested the staff to determine how costs on the project could be reduced. On July 31, 2002, Sierra contacted the District's contract manager, Steven M. Long, by telephone and was told that Sierra had received the highest ranking from the selection committee, but that the Committee had postponed a decision until its next meeting because of concerns over the cost of the project. On August 28, 2002, the Committee reconvened. Due to a personal conflict, Mr. Haynes was not present. By a 2-0 vote, the Committee determined that because of the cost concerns, all proposals should be rejected, and that the 5,000 square foot ancillary building should be combined with two other projects being undertaken at the Tampa Service Center under a single construction manager to reduce costs and realize other benefits. This decision was conveyed by telephone to Sierra on September 1, 2002. On September 3, 2002, formal Notice of Rejection letters were sent to all five proposers. On September 5, 2002, Sierra filed its Notice of Protest. This was followed by a Formal Written Protest filed on September 12, 2002, in which Sierra contended that the Committee's decision was arbitrary. The Tampa Service Center is a branch office of the District and includes office, technical, maintenance, and garage facilities with accompanying parking and roadways. Existing Building 1 is outdated, crowded, and inadequate and must be replaced. It will be demolished once the new Building 1 is constructed. Although the District initially decided that the new building would need 30,000 square feet, it later determined that the approximately 5,000 square feet needed to house District field staff could be separated out as an ancillary building from Building 1 and built as a metal building. A preengineered metal building was selected since it would be cheaper and faster to build, and some of the field staff could be moved out of the crowded existing Building 1 to the ancillary building while new Building 1 was being constructed. In addition to the construction of the new Building 1 and the ancillary building, the District intends to re-roof existing Building 2, demolish Building 1, re-route traffic flow, install security gates, improve parking, improve the stormwater system, and install new landscaping. As a general rule, as a project gets larger, there are economies of scale that result in cost reductions because the cost per unit becomes less as a greater quantity is purchased. In deciding to reject all proposals, and combine all of the work at the Tampa Service Center, the Committee considered the following advantages to having a construction manager supervise the entire project: It would reduce potential confusion by better coordinating the number of contractors and subcontractors on the job and create a more efficient work flow. Task coordination is essential for safety since District employees and members of the public will have continuing access to the Tampa Service Center while all components of the project are under construction. There will be considerable underground construction work for the installation of electrical lines, telephone lines, computer cabling, water lines, fire protection water service lines, sewer lines, irrigation lines, and stormwater lines. Improved coordination reduces duplication and the possibility of putting recently completed work at risk for damage. By working with the architect and the construction manager, the District could use value engineering to reduce costs. Value engineering would allow the District to look at creative ways to reduce costs by substituting similar, less expensive items for more expensive items. Because the District is exempt from paying state sales tax, the District would save the 7 percent sales tax since the construction manager sets up accounts with vendors directly for the District. The District would also save the contractor's percentage markup that typically encompasses the 7 percent sales tax when it has to be paid. The construction manager system produces a better selection process and cost savings since the construction manager can be required to obtain at least three proposals for each of the sixteen divisions of labor. There will be benefits of accountability and uniformity from having only one person or entity responsible for any problems encountered. In addition, the following savings could be realized through economies of scale by including the ancillary building in the larger project and under a construction manager: mobilization; demobilization; site work; excavation for foundation; concrete for foundation; rough-in electrical work; rough-in plumbing; fire protection service line; electrical lines; water lines; computer cabling lines; plumbing; electrical; insulation; drywall; floor tile; ceiling grid; ceiling tiles; doors; air conditioning system; painting; landscaping; irrigation sprinkler system; paving work; stormwater system; and one project manager. At the same time, when the earlier decision was made to separate the construction of the ancillary building out from the rest of the Tampa Service Center project to save time and money, the Committee believed that the ancillary building would obtain its utility and communication services from an existing, adjacent building. After later learning that this was not the case, and that the scope of the work for the ancillary building had expanded to require considerable underground site work for its new utility and communication services, the Committee realized that the cost and other benefits originally intended had been lost. Finally, new Building 1 is only sixty feet from the ancillary building and will require considerable underground site work for its new utility and communication services. Therefore, the Committee concluded that it made more sense to combine the construction of the new Building 1 and the ancillary building to achieve cost savings and efficiencies in the installation of utility and communication services and to reduce other overlapping aspects of the Tampa Service Center project. Given the foregoing considerations, the Committee's decision to reject all proposals was not arbitrary in any sense. While it is true that the precise amount of savings to be realized cannot be quantified, the greater weight of evidence shows that some savings can be achieved, and that the Committee's decision was based on facts, sound reasoning, and logic.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Southwest Florida Water Management District enter a final order rejecting all proposals on RRP 008-02. DONE AND ENTERED this 4th day of December, 2002, in Tallahassee, Leon County, Florida. ___________________________________ DONALD R. ALEXANDER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 4th day of December, 2002. COPIES FURNISHED: E. D. "Sonny" Vergara, Executive Director Southwest Florida Water Management District 2379 Broad Street Brooksville, Florida 34604-6899 Stephen H. Kurvin, Esquire 7 South Lime Street Sarasota, Florida 34237-6105 Stephen O. Rushing, Esquire Southwest Florida Water Management District 2379 Broad Street Brooksville, Florida 34604-6899
