The Issue The issue in this case is whether the bid protest of Petitioner should be sustained.
Findings Of Fact Respondent owns and operates a city pool known as the George A. Pierce Swimming Pool at the Ferran Park complex in Eustis. The pool is nearly 40 years old and is in need of renovations and repairs. Deciding to renovate the old pool and build a new one next to it, Respondent obtained plans for the intended work from Project Engineering. These plans, which are dated January 31, 1990, consist of seven pages of blue-line drawings of the site, the existing pool, a new training pool, and various details, such as gutters (Blue Drawings). The Blue Drawings formed the basis of a request for proposals that Respondent issued at some point prior to the events at issue in the present case. The offers submitted in response to the request for proposals were unsuitable because they exceeded the money that Respondent had available for the job. At this point, employees of Petitioner learned that Respondent was seeking to repair and renovate the pool. Bill West, who is responsible for sales for Petitioner, visited with Norma Showley, who is in charge of purchasing for Respondent. She showed him the Blue Drawings and informed him that the proposals that had been submitted were double the budget. Mr. West agreed, at no charge, to prepare a new set of drawings for Respondent. Ms. Showley did not agree that Petitioner's drawings would necessarily be incorporated into a new request for proposals or invitation to bid. However, Ms. Showley explained that time was critical, and she needed his drawings in a hurry. She gave Mr. West the original set of Blue Drawings for his company to use in preparing the new drawings. Mr. West asked Jack Arthur to prepare the new drawings. Mr. Arthur does estimates and drawings for Petitioner and is a registered professional engineer licensed to practice in Florida and several other states. He is also a Florida-licensed commercial pool contractor. Mr. Arthur met with Ms. Showley a few days prior to March 12, 1990. Also attending this meeting was Harvey Spears, who, although not an employee of Respondent, assisted Ms. Showley on this project. Apparently, Mr. Spears was the contractor in charge of other work in the pool area, such as the construction of a bathhouse. Working 40-50 hours over the next three days, Mr. Arthur finished the plans, which bear the date of March 12, 1990 (Black and White Drawings). Mr. West then delivered the plans to Ms. Showley. Ms. Showley discussed with the City Comission the possibility of using the Black and White Drawings instead of the Blue Drawings as the basis of a new bid solicitation. The Commission directed her not to abandon the specifications contained in the Blue Drawings, but revise them as appropriate. No decision was ever made to use the Black and White Drawings, except for the purposes expressly indicated in the later-issued invitation to bid, such as to indicate the location of the bathhouse relative to the existing pool and the details of an alternate gutter system. On April 13, 1990, Respondent issued an invitation to bid, which was identified as Bid NO. 026-90. The invitation to bid was accompanied by the Blue Drawings and the Black and White Drawings. The text, Blue Drawings, and Black and White Drawings are collectively referred to as the "ITB." Each of the pages of the Black and White Drawings were marked "Attachment `A,' `B,' `C,' or `D."' The ITB required that the bids, which had to be sealed, were to be delivered to a certain place, where they would be opened at a specified time on May 14, 1990. The ITB provided for a "bid evaluation period" of up to 30 days after opening. Other relevant provisions in the unlabelled introductory section of the ITB include: ACCEPTABLE FORMAT--Bid format provided by "the City is the only acceptable format on which a bidder may return his bid. Bids submitted, on any other format shall be disqualified. (Any additional information relative to the bid, should be submitted on a separate format.) * * * CLARIFICATION/CORRECTION OF BID ENTRY--The City of Eustis reserves the right to allow for the clarification of questionable entries and for the correction of obvious mistakes. ADDITIONAL TERMS AND CONDITIONS--The City of Eustis reserves the right to reject bids containing any additional terms or conditions not specifically requested in the bid/proposal solicitation. * * * AWARD--This bid may be awarded in part or whole as best serves the interest of the City. All awards made as a result of this bid shall conform to all applicable ordinances of the City of Eustis. RESERVATION--The City of Eustis reserves the right to accept any bid which in its opinion best serves the interest of the City, and/or to reject any or all bids or any part thereof, to make awards by individual items, groups of items, or a combination thereof, or to waive minor technicalities or informalities in bids received. * * * For information regarding bid specification, contact Norma M. Showley, General Services, Coordinator [telephone number provided in ITB]. The Scope section of the ITB provides that this is a bid to provide all labor, materials, equipment, supplies and incidental necessary for the performance of all work required for the proper and professional renovation of the existing City Pool with an additive alternate for addition of a . . . training pool . . . The following are suggested methods of renovating the existing pool and constructing the new pool. Plans that differ will be considered for award if determined to be in the best interest of the City. The Scope section explains that the existing pool was built in 1951 and is a "poured-in place pool . . . with no flood inlets." This part of the ITB also informs the bidder that separate contracts have been executed for the construction of a new bathhouse, including a new chemical and filter room, and the work may be performed concurrently with the renovation of the existing pool. The bathhouse layout is shown on Attachment "A". NOTE: Funding for this project is from sales surtax which must be used for construction purposes and must be fully expended before the end of October, 1990. The Scope section continues with a description of the base bid and alternates. The alternates are provided "[d]ue to the time restraint involved with the funding for this project" and Respondent's desire to complete the project quickly. The Scope section of the ITB states that the base bid for the renovation of the existing pool includes replacement of the filtering system with a D.E. filter system, replacement of the circulation system, replacement of the existing guttering system with a one foot open face overflow gutter, replacement of the Marcite on the walls, and addition of underwater lighting "as per plans prepared by Project Engineering (i.e., the Blue Drawings). Additive Alternate 1 eliminates the overflow gutter system and adds a stainless steel facing overflow system as shown on Attachment "B." Additive Alternate B eliminates the recirculating system shown in the Blue Drawings and provides for a proprietary system manufactured by Petitioner. Additive Alternate 3 eliminates the D.E. filter system, as shown in the Blue Drawings, and adds a high rate vacuum sand filter system. Deductive Alternate 1 eliminates the underwater lighting. The Scope section of the ITB describes the base bid for the new pool, which in fact is not an additive alternate, as located west of the existing pool and having a D.E. filter system and underwater lighting. Additive Alternate 1 eliminates the D.E. filter system and adds a pressure sand filter system. Deductive Alternate 1 eliminates underwater lighting. The next section of the ITB is the Instructions to Bidders. Among the provisions listed under the "Submittals" subsection are: License--Bidders shall submit with the bid response a copy of their license from the State of Florida Construction Industry Licensing Board. * * * Bidder Qualification-- * * * References shall be furnished with bid response Other relevant subsections of the Instructions to Bidders section of the ITB provide: Visit to Site--The bidder/contractor shall visit the site of the work to become fully informed as to the conditions that exist and under which he/she must work, and by bidding, represents that he/she has read and understands the bid documents. * * * Evaluation and Award--Bids will be evaluated on the basis of cost, bidder's ability to perform, previous experience, experience of personnel and required completion time. It is the City's intent to award a contract to the lowest responsive bidder. However, the City of Eustis reserves the right to accept any bid which in its opinion best serves the interest of the City, and/or to reject any or all bids or any part thereof, to make awards by individual items, groups of items, or a combination thereof, or to waive technicalities or informalities in bids received. NOTE: Funding for this project is from sales surtax which must be used for construction purposes and must be fully expended before the end of October, 1990. Negotiation of Contract--If deemed in the best interest of the City, the City may, either before or after receipt of bids, select one or more persons or companies and negotiate a contract for the proposed work. The decision of the City as to the firm or firms with whom the City will negotiate will be final. During the negotiations, the right is also reserved to change the plans and specifications as the City may at that time determine to be in the best interest of the City. The section of the ITB devoted to Requirements and Specifications restates the base bids and alternates set forth above in the Scope section. Under the subsection entitled, "Work and Products Not Included," the ITB lists, among other items, "Concrete decking--bleacher area, bathhouse area." Under the subsection entitled, "Description of Work--Existing Pool," the ITB includes the demolition necessary to remove the existing overflow system, install a new one, and provide a recirculation system. Under a similar subsection for the new pool the ITB provides: Provide decking around new pool to match height of existing decking, 4" thickness, 3000 psi concrete, as shown on attachment showing pool layout. Decking shall slope three inches (3") in ten feet (10') away from pool or to deck drains. Minimum unobstructed deck width shall befour [sic] feet (4'). This subsection also refers the bidder to the Black and White Drawings for the curing of the floor of the new pool. For the renovation of the existing pool, the bid form contains blanks for the bidder to include prices for the base bid, three additive alternates, and one deductive alternate. For the construction of the new pool, the bid form contains blanks for the bidder to include prices for the base bid, one additive alternate, and one deductive alternate. Two bid addenda were issued. The first concerned additive alternate 3 for the existing pool and additive alternate 1 for the new pool. This addendum adds, respectively, a vacuum sand filter (instead of a high rate vacuum sand filter) and a high rate pressure sand filter system (instead of a pressure sand filter system). The second addendum, which was accompanied by "a new bid form for prices, adds an automatic water level sensor unit, as described in the Black and White Drawings, to the base bids for the existing and new pools. For the existing pool, the addendum added alternate 4, which replaces the existing main drain with a stainless steel drain, as described in the Black and White Drawings. The Blue Drawings contain four special notes and ten general notes. The first special note is that the final location of "pool and configuration of deck to be determined by architect." The first general note is that the bathroom floors, pool deck, and first 15 feet of connecting walkway are to be concrete or other impervious material, positively drained, and slip resistant. Three unrelated items are noted in red handwriting to be "in bathhouse contract," and one unrelated item is similarly noted to be "by City." Notes on the Black and White Drawings indicate that the contract does not include pool decking around the new pool and a retaining wall beside the new pool, which is in close proximity to a lake. The new pool clearly has to be built to the elevation of the existing pool because, among other reasons, the lake contributes to a high water table in the area of the pool. In order to achieve this elevation, the construction of the decking around the new pool would require either a retaining wall (with some fill) or a larger amount of fill sloped down to the ground level. Due to the close proximity of the lake, it is not entirely clear that the latter approach would work. Even though Mr. Arthur detected inconsistencies between the Black and White Plans and the remainder of the ITB, neither he, Mr. West, nor any other representative of Petitioner contacted Ms. Showley regarding the decking and retaining wall. Following the issuance of the ITB but before the submission of bids, Mr. West met with Ms. Showley, but the conversation involved only the replacement of the main drain and installation of the automatic water level sensor unit. Ms. Showley covered these matters by the addenda described above. They also discussed the possibility of alternate bids with one based exclusively on the Blue Drawings and one based exclusively on the Black and White Drawings. However, Ms. Showley's ability to deviate significantly from the specifications depicted in the Blue Drawings was limited by the lack of time and the earlier directive of the City Commission to revise, rather than abandon, the specifications in the Blue Drawings. Ultimately, timely bids were submitted by only Petitioner and Intervenor, ignoring one or two "no-bid" bids. Petitioner's base bid for the existing pool was $92,399. Additive alternate 1 added $22,897. Additive alternate 2 added $12,383. Additive alternate 3 added $18,500. Additive alternate 4, which was the replacement of the main drain, was included in the base bid and all alternates, even though the only alternate specifying that the main drain be replaced was Additive alternate In fact and as evident from the bid, Petitioner would not perform the job without replacing the main drain due to concerns about the durability of the existing main drain. Deductive alternate 1 subtracted $2500. For the new pool, the base bid was $38,389. Additive alternate 1 subtracted $3103. Deductive alternate 1 subtracted $798. Intervenor's base bid for the existing pool was $107,170. Additive alternate 1 was not bid. Additive alternate 2 added $25,601. The bid was apparently incorrectly filled out. Additive alternate 2, which was the proprietary system manufactured by Petitioner, in fact was not bid, and Additive alternate 1 was bid. Additive alternate 3 added $22 927. Additive alternate 4, which called for the replacement of the main drain, added $5340, but Intervenor noted on its bid form that it did not recommend this alternative. Deductive alternate 1 subtracted $3444. Intervenor's based bid for the new pool was $50,472. Additive alternate 1 was not bid. Deductive alternate 1 subtracted $920. Intervenor also bid three "Voluntary alternates." These alternates, which were not requested in the ITB, involved variations on equipment for the existing pool. Voluntary alternate 2, which totalled $143,253, included a full stainless steel gutter with grating and a high rate pressure sand filter with automatic backwashing feature. Petitioner's base bid for both pools was $130,788. Intervenor's base bid for both pools was $157,642. Intervenor's base bid for both pools, using Voluntary alternate 2, was $193,725. Both bid packages disclosed obvious problems. Petitioner had not bid on any decking or the retaining wall and fill. Ms. Showley and Mr. Spears called Mr. West and, after confirming these omissions, asked for a price. The additional labor and materials added $13,526 for the decking and fill, but apparently not the retaining wall as the slope approach would be used around the new pool. This would have raised Petitioner's base bid to $144,314. However, Petitioner still did not address the issue of the replacement of the main drain. Based on advice from Mr. Spears, Respondent did not want to replace the main drain. The process would require cutting the bottom of the pool. Due to the pool's location, age, and type (poured-in), Mr. spears felt, and Respondent agreed, that the main drain should not be disturbed. Intervenor's bid did not include a copy of its contractor's license or references. Ms. Showley obtained this information after the bid opening. She and Mr. Spears also spoke with Harold von Weller, owner and president of Intervenor, concerning the filtration and gutter systems described in Voluntary alternate 1 and where they had been used. In response to a question concerning the 2 approximate cost of the retaining wall and decking, for the purpose of making a deduction that would facilitate comparison with Petitioner's bid, Mr. Weller wrote a letter estimating the cost of these items as $7004.43. An informal committee consisting of Mr. Spears, Ms. Showley, the architect for the bathhouse, and the City Manager, Michael G. Steerman, considered the bids and determined, after consulting with staff, that Petitioner's bid was not responsive. The City Commission met on May 17, 1990, to award a contract for the renovation and construction of the pools. Mr. Steerman recommended that Respondent reject Petitioner's bid as nonresponsive and award the contract to Intervenor on its Voluntary alternate 2 bid for the existing pool and its base bid for the new pool less the Deductive alternate 1. The amount of $189,361 was derived by subtracting from the Voluntary alternate 2 amount of $143,253 the sum of $3444 for Deductive alternate 1, for a net amount of $139,809 for the existing pool. The new pool net of $49,552 thus generated a total figure of $189,361. It is not entirely clear whether Respondent viewed any of Intervenor's bids as responsive. Most likely, it was assumed by staff and the City Commission that the base bid and possibly the Voluntary alternate 2 bid were responsive. Petitioner and Intervenor are responsible bidders. They are highly qualified and experienced in the construction of commercial pools.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the City of Eustis enter a final order dismissing the bid protest of Petitioner. ENTERED this 18th day of July, 1990, in Tallahassee, Florida. ROBERT D. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 18th day of July, 1990.
The Issue On May 12, 2004, did Respondent, Department of Transportation (DOT), act illegally, arbitrarily, dishonestly, or fraudulently when it cancelled the posting and noticed its intent to reject the bid of Rosiek Construction Co., Inc. (Rosiek), in relation to financial project Nos. 256903-1-52-01 and 256903-1-56-01, Pinellas Bayway Bridge Replacement, SR 682 (the Project)? § 120.57(3)(f), Fla. Stat. (2004).
Findings Of Fact The subject of this protest is financial project Nos. 256903-1-52-01 and 256903-1-56-01, Pinellas Bayway Bridge Replacement. Respondent and 12 other pre-qualified bidders received copies of the bid solicitation notice, plans and specifications for the Project at issue. Rosiek submitted a responsive bid for the Pinellas Bayway Bridge Replacement on April 28, 2004. There were no other bidders. Rosiek is pre-qualified to bid and receive the contract for the Project and therefore is a responsible bidder. On May 12, 2004, DOT posted its notice of intent to reject all bids. Rosiek timely filed this bid protest on May 14, 2004, with DOT, along with the statutorily required bid protest bond. DOT's 2004 Standard Specifications for Road and Bridge Construction is applicable to this project. FACTS BASED UPON ROSIEK'S ADMISSIONS DOT had advertised its bid solicitation notice for Financial Project Nos. 256903-1-52-01 and 256903-1-56-01, Pinellas Bayway Bridge Replacement on or about March 4, 2004. Rosiek received the copy of the Bid Solicitation Notice for the Project. Rosiek did not file a specifications challenge with respect to the referenced Project. DOT advertised the amount of $37,087,000.00 as its budgeted amount for the Project. Rosiek submitted a total bid of $50,470,378.12 for the Project (total bid A+B). ADDITIONAL FACTS Juanita Moore is a manager of the DOT Contracts Administration Office. She served as a member of the Technical Review Committee and the Awards Committee in relation to the Project. When the Technical Review Committee is confronted with a bid, such as the Rosiek bid, which is from a single bidder, something is missing from the bid or for certain differentials in price between the bid received and the official cost estimate, the Technical Review Committee considers these to be "problem jobs." In connection with terminology, Ms. Moore explained that the budget figure, referred to in the Bid Solicitation Notice for the Project as a Proposal Budget Estimate, is derived from an earlier estimate in the process and in turn an official cost estimate was established for the Project. The official cost estimate is also referred to simply as the estimate. The official cost estimate has not been disclosed as has been explained in the Preliminary Statement to the Recommended Order. The official cost estimate here is broken down into component items within the Project pertaining to cost for Mobilization, Concrete Class IV, Concrete Class V, etc. After the Technical Review Committee considered the Rosiek bid, the bid was passed on to the Awards Committee where it was decided to reject the bid. According to Ms. Moore the bid was rejected as too high when compared to the official cost estimate. The reference to a bid being too high relates to a bid which is more than 10 percent in excess of the official cost estimate. The budget figure and the official cost estimate are not necessarily the same in a given instance. The fact that it was the only bid was also a factor considered in the rejection. As Ms. Moore explained, at the time the Rosiek bid was rejected, it was principally because it was too high in relation to the official cost estimate. Given the posture in this case, the rejection as the only bid will form the basis for resolving this dispute, absent DOT's willingness to divulge the amount of the official cost estimate or how it was established. DOT does not have an established policy for rejecting bids based upon the fact that only a single bidder responded to the solicitation. In her experience, Ms. Moore does not remember DOT rejecting a bid solely on the ground that there was only one bidder. The minutes of the Awards Committee meeting held on May 12, 2004, detail the response by that committee to the Rosiek bid. In the copy of that document provided for this proceeding, DOT's official cost estimate is redacted. The percentage differential between the official cost estimate and the Rosiek bid is likewise redacted. The item number 0101-1 for Mobilization reflects Rosiek's bid of $4,900,000.00 compared to the official cost estimate which is redacted. Similarly, Item No. 0400-4-4, Concrete Class IV refers to the contractor bid price of $800.00 per cubic yard compared with the official cost estimate which is redacted. There are other comparisons between several additional categories or items in which the contractors bid price is reflected but the official cost estimate in comparison is redacted. The minutes go on to describe how the review being made by the Awards Committee led to the conclusion that the official cost estimate could be adjusted, placing the bid received by Rosiek a certain percentage above the estimate on a 10 percent criteria job but the differential between the adjusted official cost estimate and the Rosiek bid is not revealed as a percentage because of redaction. The DOT district where the project would be located is District 7, the Tampa office. The minutes of the Awards Committee meeting indicate that the district and the Technical Review Committee recommended to the Awards Committee that it reject the Rosiek bid and re-advertise. That was the decision made by the Awards Committee on May 12, 2004, to re-let in June. Nothing in the minutes prepared by the Awards Committee refers to the significance of Rosiek as the only bidder and any concern which the Awards Committee had about that fact. On May 12, 2004, when DOT provided a Cancellation of Posting and a Notice of Intent to Reject to Rosiek, it did not state the rationale for that decision. It merely indicated to Rosiek that it was DOT's intent to reject all bids on the project and advised Rosiek of its opportunity to contest that decision. On May 5, 2004, Kenneth A. Hartmann, P.E., the District 7 Secretary, prepared the District Response to Post- Bid Evaluation of Bids in Excess of Approved Award Criteria. The document is presented in question-and-answer form. In response to the question numbered 4 within the document, related to the prospect of critical safety deficiencies in the existing system being corrected by the construction of a new bridge, Mr. Hartmann responded with the answer "No." In relation to question numbered 2, excluding normal inflation, the question was asked whether re-advertising the project would likely result in a higher bid. Mr. Hartman answered "No." In response to question numbered 16, related to his recommendation as the district secretary, for action that should be taken by the Awards Committee he stated "This project should be rejected and re-advertised for a June 2004 1st [sic]. Considering that the project is medium to large and was competing against two other large bridge projects on the same day it is understandable that the contractor's bid was higher than our estimate." In response to question numbered 15 concerning the work load level of the contracting industry in the locality where the project would be constructed, Mr. Hartmann referred to "a high level of work load." At hearing Donald Skelton, P.E., the District 7 Secretary testified in support of the rejection of the Rosiek bid. In the past he had served as Director of Transportation Development with DOT, a position that made him responsible for preparation of the design plans and contract packages that are bid. He had involvement with this Project pertaining to the preparation of design plans and getting the Project to contract letting. He reviewed the Rosiek bid. In discussions related to the Rosiek bid during the post-bid evaluation period, there was a concern over a lack of competition and the differential between, what Mr. Skelton refers to, as the budget amount and the bid amount by Rosiek. Mr. Skelton was mindful of potential safety issues that might warrant the prospect of trying to find additional money to fund the Project, if it was necessary to replace the existing bridge for safety reasons. If the bridge were structurally deficient or in bad shape, that would need to be addressed, versus the additional time necessary to potentially rebid the project. No safety issues of that sort were found by Mr. Skelton. Mr. Skelton explained that the fact that there was single bidder made it difficult, if not impossible, to make a comparison between that bid and what the true market value of the bridge construction would be. Mr. Skelton expressed the hope by the DOT, that there would be more than one bidder in the future to truly get an impression of the degree of competition and whether the competition would result in a realistic price for the public. He recognized that there is no guarantee that DOT is going to get a lower bid if the project is re-bid. Mr. Skelton indicated that when you have multiple bids you can compare what the economic system would support in relation to the affordability of the project. That comparison is of similarity in prices among the competitors trying to win the job, with the belief that bidders put their best effort forward to prevail in the competition. A single bid does not give any indication of market factors, in his view. Michael Rosiek is the vice-president for Rosiek. In his testimony, he expressed a concern that if the project was re-let for bid, Rosiek's competitive position would not be good, in that the other contractors would have read the Rosiek bid that was made in the first letting, informing the competitors of the Rosiek price to its detriment. Further, Mr. Rosiek expressed a concern that in a re-letting the company would be bidding "against ourselves." Louis Wenick, P.E., has a business consulting service. The nature of the business is consulting work relating to the construction industry. A considerable part of the business involves DOT projects. In his work Mr. Wenick is involved with scheduling, cost analysis, and entitlement analysis in DOT projects. He is familiar with DOT's specifications, policies, and procedures. Mr. Wenick is a registered engineer in Florida and a certified general contractor in Florida. Mr. Wenick obtained information from DOT concerning its history in receiving sole bids for a project and the instances in which the sole bidder was awarded the contract. Mr. Wenick looked at procedures followed by DOT in awarding contracts. Mr. Wenick looked at the DOT experience in re- letting bids to determine if a company was a low bidder in the first letting when bids were rejected, and what percentage of the time that low bidder would succeed in being awarded the contract upon a re-letting. Mr. Wenick prepared certain charts intended to depict the DOT response in the areas examined by the witness. Rosiek's Exhibit numbered 3 is referred to as Problem Jobs for the April 28, 2004, letting, with two posting dates of May 20, 2004, and June 7, 2004, respectively. The chart depicts the proposal I.D. number (bid), the project number and the type of problem identified in reviewing bid responses and a brief statement of the Technical Committee's comments and the Awards Committee's disposition in those projects depicted. Nothing more is described in the chart. In no case set forth in the chart was the type of problem described in any detail or, limited to an experience with a single bidder, as opposed to perceived problems in relation to the bid that was too high, as well as having a single bidder or to the problem of having a bid that was too high alone. Seven projects were awarded. Two were not. The rejections were based upon the bids being too high. One of the projects initially awarded was later rejected due to the unavailability of local funding to support the project. Mr. Wenick prepared a chart, Rosiek's Exhibit numbered 4. This reflects the DOT award results for sole or single bidders from the period July 1999 through April 2005. The columns in the chart show the numeric count of sole bids, at certain letting dates, with the contracts numbers, the name of the low bidder, and the disposition of the bids. The numeric count of sole bids is a running tally over the period. This reflects 52 sole bids of which eight were rejected, making the percentage accepted 84.62 percent. Again the nature of the projects is not shown in the chart, and this chart does not indicate the basis for rejection. Rosiek's Exhibit numbered 5 is another chart prepared by Mr. Wenick. It reflects instances in which projects were re-let for bid in the period July 1999 to April 2005. The letting dates are reflected. The project numbers, the low bidders names, if known, and the amount quoted is set out. The re-let date if the project was re-let is reflected. The low quote on re-bid and the low bidder's name on re-bid are reflected, as is the percentage difference between the low quote in the first letting and the low quote in the re- letting. Where data is established in all columns in the chart, 18 of the projects are shown to have been re-bid out of 24 projects that were bid initially. Within that group, five bidders who bid in the initial letting were awarded the contract in the re-letting, while 13 low bidders in the first letting were disappointed in the re-letting. This equates to 27.78 percent success rate by the low bidder in the initial letting when re-bidding in the re-letting. Having considered the exhibits prepared by Mr. Wenick, the information is insufficient to discern the reason for DOT's past policies and practices and to compare them to the present case for consistencies in the application of those policies and practices when rejecting bids. Additionally, the reason for the choices in any single project described in the charts cannot be appropriately understood from the charts and compared to the experience here. On the topic of the success rate for contractors who provided the low bid in the original letting and the low bid in the re-letting, it is so general an analysis, that it cannot be relied upon to determine the real significance for contractors who provided the low bid in the original letting, only to be disappointed in the re-letting when the contractor did not receive the contract.
Recommendation Upon consideration, it is RECOMMENDED: That a final order be entered dismissing the Rosiek Amended Formal Written Protest challenging the DOT decision to reject its bid. DONE AND ENTERED this 17th day of August, 2005, in Tallahassee, Leon County, Florida. S ___________________________________ CHARLES C. ADAMS 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 17th day of August, 2005.
The Issue The Issue in this case is whether the subject bid protest should be sustained.
Findings Of Fact On January 22, 1991, Respondent issued Specifications for Replacement of Air Conditioning, Apopka School, Apopka, Florida. The specifications were contained in a spiral-bound book, which contained bidding and contract requirements and technical descriptions of mechanical systems and electrical systems. A set of drawings dated January 22, 1991, accompanied the spiral-bound book. Collectively, these documents constitute the invitation to bid (ITB). 1/ The ITB announced that Respondent would receive bids for the replacement of air conditioning and related systems until February 11, 1991, which evidently was later extended to February 19. The ITB scheduled a pre-bid conference on January 31, 1991. Section A-3.6 of the ITB provides: For clarity of description and as a of comparison, certain equipment, materials, etc., have been specified by trade names or manufacturers. To insure a uniform basis for bidding, the Bidder shall base his Proposal on the particular system, equipment or material specified. After the contract is let, other equipment, materials, etc., as manufactured by other manufacturers may be accepted only if, in the opinion of the Engineer, same is equivalent in quality and workmanship and will perform satisfactorily in its intended purpose. Section A-3.8 of the ITB states: Except as provided in Paragraph A3.(3, above each bidder represents that his bid is based upon the materials and equipment described in the [ITB]. Prior approval of substitution of other materials and equipment will be considered if written request is submitted to the Engineer for approval at least twelve days prior to the date for receipt of bids. If the Engineer approves any such proposed substitution, such approval will be set forth in an Addendum and will be forwarded to all bidders . . .. If any bidder is unable to procure written approval of any substitution from the Engineer prior to the opening of bids, he shall base his bid on the Exact items specified; if said bidder wishes to bid substitutes, he must then do so as alternates to the base bid, and so note. Each such alternate submitted shall include a complete description of the proposed substitute, the material or equipment for which it is to be substituted, drawings, cut sheets, performance or test data other data or information necessary for a complete evaluation. If additional information is required by the engineer for a complete evaluation, in his sole judgment, the Contractor shall submit such additional information as required within five (5) days of such notification, or the Alternate will not be considered. Alternates requested on the Bid Proposal Form which are approved for construction will be incorporated into the contract with the successful bidder. Alternates offered by the Bidder may be accepted and incorporated into the contract with the successful bidder. Any Substitutions which are felt by the Bidder to offer significant additional value and advantage to the Owner are encouraged to be submitted as Alternates with the Bid Proposals. Section A-14.1 contains the bid form. The first blanks are reserved for the Base Bid. Alternate #1 is for the installation of a variable air volume system, which permits localized control of air flow and temperature. Alternate #2 is for reciprocating chillers. The remaining alternates are irrelevant to this case. The bid form states that Respondent may "award such alternates that in its judgment will be for the best interest of [Respondent]." Section 1.01 of the General Requirements, which are part of the ITB, describe the work of the contract as Installing "nominal 200 ton air cooled reciprocating chillers" and related equipment. Section 1.03 A. of the Basic Mechanical Requirements, which are part of the ITB, states that the "plans and specifications are a general description of the work to be performed." Sections 2.01 under "Pumps" and "Motor," which are parts of the ITB, list several "acceptable manufactuiers" for pumps and motors. Elsewhere the ITB also lists varibus acceptable manufacturers for different types of equipment. Sometimes, as in the case of motors, the specifications describing the particular item of equipment expressly allow substitutions upon "prior approval of required submittal data by Engineer." Sometimes, as in the case of pumps, the specifications describing the particular item of eguipment are silent as to substitutes. Section 2.01 of Air Cooled Water Chillers, which is part of the ITB, describes "acceptable manufacturers" as follows: Base Bid: Bohn Heat Transfer/Wickes Manufacturing Co., air cooled screw chilled. Alternate Bid: Carrier Corp, air cooled reciprocating chiller. Other Alternates: Only as approved by Engineer. Section 2.02 B. requires that the contractor provide "three (3) nominal 200 ton air cooled water chillers" meeting certain technical specifications not relevant to this case. Section 2.03 A. sets forth requirements for reciprocating chillers, and Section 2.03 B. sets forth requirements for screw chillers. On page M-8 of the drawings included in the ITB, the "air cooled chiller schedule" notes "Bohn" as the manufacturer and provides a model number for the Bohn chiller. The schedule states that the cooling capacity of the chiller is 194.7 tons. The cooling capacity stated in the schedule was intended to describe the cooling capacity of the Bohn model air chiller noted in the schedule. The capacity of a chiller depends upon various factors, including ambient air temperature. Under certain operating conditions, the Bohn chiller noted IA the schedule operates at a 200 ton capacity, and no evidence suggests that this model chiller was not a nominal 200 ton chiller. General Note 13 on page M-7 of the drawings states: This contractor shall base his proposal upon the equipment as scheduled or specified, using the manufacturers and model numbers as called for in the specification and scheduled on the drawings. (Add alternate design is separate). If more than one manufacturer of equipment is specified, any one of the manufacturers of equipment may be used in this contractor's proposal. If this contractor wishes to use equipment not specified he must, at the time of bidding, submit separately on letterhead stationery of the bidder, the equipment he would substitute and the cost to be added or deducted from his proposal. On February 11, 1991, Respondent issued Addendum #2 to the ITB. 2/ Among other things, Addendum #2 adds to Section 2.01 A. of Air Cooled Water Chillers: "ADD Trane Co. Model No. RTAA-200 as an approved Base Bid unit for the air cooled screw chillers. Petitioner picked up the ITB on February 18, 1991. Petitioner and Intervenor submitted timely bids by the deadline of February 19. Each bidder was qualified and each bid was responsive. 3/ Petitioner's base bid was $1,539,000. Alternate #1, which was the variable air volume system, added $120,307. Alternate #2, which was the reciprocating chiller, subtracted $41,424. Next to Alternate #2 on the form, Petitioner wrote in, "Carrier." With Alternate #1 only, Petitioner's bid was $1,659,307. Alternate #1 and 2 were $1,617,883. With Alternate #2 only, Petitioner's bid was $1,497,576. Intervenor's base bid was $1,547,300. Alternate #1 added $109,000. Alternate #2 subtracted $25,000. With Alternate #1 only, Intervenor's bid was $1,656,300. Alternate - 1 and 2 were $1,631,300. With Alternate #2 only, Intervenor's bid was $1,522,300. Following review of the bids, Respondent's Engineer sent a letter dated February 25, 1991, to Respondent's director of construction. The letter recommends the acceptance of Alternate #1 because the cost is within Respondent's budget and the benefit of increased comfort is worth the cost. The Engineer's letter also recommends that Alternate #2 (as well as Alternate #3 regarding a certain type of dampers) be rejected. The letter explains: "Discussions with [Respondent's] personnel in the days prior to bid time indicate that the use of these chillers has liabilities attached (principally noise and maintenance requirements) in excess of the savings in first cost. The Engineer's letter concludes that Respondent should award the contract to Intervenor because of its apparent low bid of $1,656,300 on the Base Bid with Alternate #1. The Engineer notes that the award would result in the installation of an "essentially identical system" as that installed in another high school in the district, which would save costs in training and parts inventory. Following Respondent's decision to award the contract to Intervenor, Petitioner timely filed a written protest and formal written protest concerning Respondent's intended decision to award the contract to Intervenor. Although the record is not entirely clear, it does not appear that Petitioner filed, within three days of receipt of the ITB, a written protest of the specifications. A chiller cools water used for air conditioning. An important part of the chiller is the compressor. The reciprocating compressor operates with pistons in a back-and- forth movement. The screw compressor operates with a screw that churns continually in one direction. Reciprocating compressors, which are the older technology, contain more components, including motors, than the screw compressors, which have been available for abort ten years. The life expectancy of the screw compressor is about three to four years longer than that of the reciprocating compressor. Evidently, little data are yet available comparing the life cycle costs of the reciprocating and screw air chillers. Given the mechanical actions and numbers of parts of the compressors, as well as Respondent's experience with, screw compressors, Respondent's projection of lower costs with the screw chiller is not unreasonable. Respondent included the reciprocating chiller alternate in the ITB because of concerns that the project would cost more than Respondent had available to spend. The same motivation prompted the inclusion of Alternate #1 for the variable air volume system. Once the bids were received, Respondent determined that it could afford the enhancements of a screw chiller and variable air volume system and consequently selected the lowest bid for this package.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the Orange County School Board enter a final order dismissing the bid protest of Lake Plumbing, Inc. ENTERED this 5th day of July, 1991, in Tallahassee, Florida. ROBERT E. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of July, 1991.
Findings Of Fact Respondent advertised for bids for work to be performed on the Statewide Regional Juvenile Detention Center located in Pasco County identified as Project Number HRS 85-300000. In response to this advertisements Petitioner and Intervenor timely submitted bids on January 23, 1966. According to calculations performed by Respondent, Petitioner was low bidder and Intervenor was the next lowest bidder. The construction budget for this job is $1.5 million, and both bids are considered by Respondent to be within budget. Depending on the alternatives chosen within each bid, Petitioner's bid is lower than Intervenor's by between approximately $6,000 and $40,000. Section B-14 of the advertisement for bids requires each bidder to submit a list of the subcontractors who will perform work on the job for him and specifies that only one subcontractor shall be listed for each phase of the work. Section D of the advertisement for bids specifies the work areas for which a subcontractor must be listed and states that said list is an integral part of each bid submitted. The subcontracting areas include electrical plumbing, mechanical, roofing security control systems, food service equipment and fire protection. Petitioner's bid was rejected on February 4, 1986, because its bid failed to include a roofing subcontractor's name as required in the advertisement for bids. Petitioner does not dispute that its bid was incomplete when submitted since it failed to identify a roofing subcontractor. However, Petitioner contends this omission was a result of clerical error in typing the bide and that, in fact, it had selected Republic Roofing as its subcontractor. John Breen, Petitioner's project manager, testified that it was his intent to use Republic Roofing when he submitted the bide that he had a firm bid from Republic Roofing, and that when this omission was brought to his attention after bids were opened, he identified Republic Roofing in writing on January 24 and 29, 1986, to Brian Seufert an intern architect working for Respondent's project architect. Seufert confirms Breen's testimony through affidavit jointly filed by the parties. Seufert indicates that the project architect has no reason to believe that Petitioner could not perform the work required by the project. By affidavit jointly filed by the parties, Joyce Kleja secretary for Petitioners also supports Breen's testimony about her clerical error in omitting the roofing subcontractor when she typed the bid. Ray Scerbo, an estimator for Republic Roofing, disputes the testimony of Breen through jointly filed affidavit. Scerbo indicates it was not until a couple of days after the bid opening that he was told by Petitioner that Republic Roofing "had the job" if Petitioner was awarded the contract. This conflicts with the first written notice from Breen to Seufert dated January 24, 1986, as well as Seufert's affidavit that Petitioner told Seufert on January 24, 1986, that Republic Roofing had been selected. Scerbo is no longer employed by Republic Roofing. After considering all of the evidence, it is specifically found that Petitioner's omission of Republic Roofing from its list of subcontractors was through clerical error and that Petitioner had firmly decided to use Republic Roofing for subcontracting work prior to submission of its bid. The advertisement for bid required all subcontractors to be listed in any bid in order to allow Respondent to review prior performance and licensure of subcontractors, and also to prevent "bid shopping". Bid shopping is a practice which inflates a general contractor's bid and therefore the actual award by encouraging subcontractors to initially submit high bids to the general contractor and then negotiate a lower price with the general contractor who has received the award. The general contractor's bid remains inflated however and in this way the cost to the state is increased.
Recommendation Based upon the foregoing it is recommended that Respondent enter a Final Order awarding Project Number HRS 85-300000 to Intervenor. DONE and ENTERED this 1st day of April 1986, at Tallahassee Florida. DONALD D. CONN 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 1st day of April 1986. APPENDIX (DOAH CASE NO. 86-0495B1D) Petitioner has submitted a memorandum and a Proposed Recommended Order, both of which appear to set forth proposed findings of fact in unnumbered paragraphs. For purposes of ruling thereon, the unnumbered paragraphs which appear to set forth proposed findings have been consecutively numbered. Memorandum: Introductory material and not a proposed finding of fact. Adopted in part in Findings of Fact 1, 2, 3, 4, but otherwise rejected as cumulative and unnecessary. Adopted in Findings of Fact 5, 7. Rejected as simply a summary of testimony and evidence and not a proposed finding of fact. Rejected as irrelevant. Adopted in part in Findings of Fact 5, 6. Adopted in part in Finding of Fact 4, but rejected in part in Finding of Fact 2 and otherwise rejected as not based on competent substantial evidence. Proposed Recommended Order: Adopted in part in Findings of Fact 1, 3, but otherwise rejected as unnecessary and irrelevant. Rejected as irrelevant. Adopted in part in Finding of Fact 2, but otherwise rejected as contrary to Finding of Fact 2. Adopted in Finding of Fact 5. Adopted in Findings of Fact 5, 7. Adopted in Finding of Fact 4. Rulings on Respondent's and Intervenor's jointly filed Proposed Findings of Fact: Adopted in Findings of Fact 1, 3. Adopted in Findings of Fact 1, 2. Adopted in Findings of Fact 4, 5. Adopted in Finding of Fact 8. , 6. Adopted in Findings of Fact 6, 7. COPIES FURNISHED: Dennis R. Long Esquire 2101 U.S. Highway 19 North Suite 201 Palm Harbor, Florida 33563 Sam Powers Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee Florida 32301 William Page; Jr., Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32301 John P. Fons Esquire Post Office Drawer 11307 Tallahassee, Florida 32302
The Issue Whether Petitioner's protest challenging the Department of Transportation's Notice of Intent to Award Contract No. E-6A14, FIN Project No. 251999-1-32-01/251999-1-52-01, to A-1 Duran Roofing, Inc., should be sustained in whole or in part.
Findings Of Fact Based upon the evidence adduced at hearing, and the record as a whole, the following findings of fact are made to supplement the stipulations of fact set forth in the parties' Joint Pre-Hearing Stipulation: 3/ The District VI Warehouse. The District VI (District) warehouse is used to store archived records, paper supplies, and surplus equipment. In addition, it houses the District's divers and their gear. The District Warehouse Roof Since at least the time of the first solicitation, the District warehouse roof has had a ponding problem and been in disrepair. The condition of the roof has deteriorated to such an extent that there is now an urgent need to replace it. The current roof has five overflow drains or scuppers. The Department has determined that additional scuppers are necessary to provide adequate drainage. The List of Interested and Prequalified Contractors When the District warehouse roof replacement project was originally advertised in 1997, 25 contractors, including Petitioner, A-1, Zurqui, Grace, ART, and Southern Coast Enterprises, requested that the Department send them information about the project. The Department compiled a list containing these 25 contractors' names, addresses, and telephone and fax numbers. The Department subsequently prequalified each of these 25 contractors. Petitioner Pedro Glaria is Petitioner's president. He is now, and has been since 1981, licensed in the State of Florida as both a general contractor and a professional engineer. Petitioner currently has two contracts with the Department, the dollar values of which are $140,000.00 and $110.00.00. Both contracts were awarded during the summer of 2000. They each require Petitioner to provide "roadside mowing" and "roadside litter pickup" services. Since its incorporation in 1989, Petitioner has had a total of 10 to 12 contracts with the Department, at least one of which involved roofing work. At no time has the Department indicated to Mr. Glaria that it has been dissatisfied with Petitioner's work. The Third Solicitation In the third solicitation, as in the first two solicitations, the District warehouse roof replacement project was advertised as a design-build project (involving both design and construction services). The Notice of Informal Bid (No. 6012DS) that the Department used to solicit bids contained the following "work description," "evaluation criteria," and "project information": Work Description Sealed written bids are requested from licensed roofing contractors, general building contractors, professional architectural engineers or professional consultant services for the purpose of a design-build project consisting of roof replacement for the District warehouse building located at the District office complex, 1000 Northwest 111th Avenue, Miami, Florida. The bidder shall provide all labor, materials, supplies, travel, consultant inspection services, shop drawing reviews to design, and furnish plans and specifications necessary to perform all work required for this project. Evaluation Criteria The Florida Department of Transportation (FDOT) will evaluate the technical bid along with the price bid at the same time. The Department may award this contract to the firm whose proposal meets the needs of the Department as outlined in the technical bid criteria, and to the responsible, responsive bidder submitting the lowest total bid. Technical Bid Will Consist of the Following Experience and qualifications of personnel Plans and specifications. 3). Design Warranty Contract time Price Bid 3). Certified Minority Business Enterprise (CMBE) Participation . . . Project Information ESTIMATED BUDGET AMOUNT: N/A With respect to a protest of the specifications contained in an Invitation to Bid or in a Request for Proposals, the Notice of Protest shall be filed in writing within seventy two (72) hours after the receipt of notice of the project plans and specifications or intended project plans and specifications in an Invitation to Bid or Request for Proposals." A formal written protest stating with particularity the facts and law upon which the protest is based and in substantially the same form as a petition in accordance with Rule 60-4.012, F.A.C., shall be filed within ten (10) days after filing of the notice of protest. The ten (10) day period includes Saturdays, Sundays and Legal Holidays; provided, however, if the last day is a Saturday, Sunday or Legal Holiday the period shall run until the end of the next day which is neither a Saturday, Sunday or Legal Holiday. Any person who files an action protesting an award shall post with the Department, at the time of filing the formal written protest, a bond payable to the Department in the amount equal to one percent (1%) of the Department's estimate of the contract amount for the purchase requested or five thousand dollars ($5,000.00), whichever is less, which bond shall be conditioned upon the payment of all costs which may be adjudged against him in the Administrative hearing in which the action is brought and in any subsequent Appellate Court Proceedings. In lieu of a bond, the Department may accept a cashier's check or money order in the amount of the bond. The protest must be filed with The Department of Transportation, Clerk of Agency Proceedings, 605 Suwannee Street, Tallahassee, Florida 32399-0450 THE DEPARTMENT RESERVES THE RIGHT TO REJECT ANY OR ALL PROPOSALS RECEIVED. Exhibit "A" (Attachment V) to the Notice of Informal Bid was the "Scope of Services for Design Build of Replacement Roof at the District Warehouse Building," Section 2.5(a) of which provided as follows: Bidder shall furnish plans and specifications that comply with the South Florida Building Code, Permits Office of the Department of Management Services, and the State Fire Marshall's Office, including but not limited to the following: The design of the roof shall provide for the installation of overflow drains or scuppers in addition to the existing scuppers to prevent an accumulation of water. Petitioner's technical bid, which was prepared by Mr. Glaria, contained a roof design that did not provide for the installation of the additional scuppers required by Section 2.5(a) of Exhibit "A." In Mr. Glaria's professional opinion, these additional scuppers were unnecessary for the design of the roof to comply with the South Florida Building Code. (Petitioner, however, did not file a protest challenging the bid specifications.) By not incorporating the additional scuppers in its design of the roof, Petitioner was able to submit a price bid lower than it could have offered had its design been in compliance with the requirements of Section 2.5(a) of Exhibit "A." All three members of the Department's Technical Review and Awards Committee found Petitioner's technical bid to be non- responsive because it deviated from the requirements of Section 2.5(a) of Exhibit "A.". Had the Department not rejected the Department's technical bid on the grounds that it was non-responsive, Petitioner would have had an unfair competitive advantage over those bidders whose design of the roof included the additional scuppers required by Section 2.5(a) of Exhibit "A." Petitioner's Formal Protest of the Department's announced intention to contract with A-1 contained the following argument concerning the Department's determination that Petitioner's technical bid did not "comply with design criteria for overflow scuppers": FDOT's Technical Panel determined that SPEC failed to comply with the design criteria for overflow scuppers because SPEC did not provide for additional scuppers. . . . The roof already contains five scuppers. As engineer of this design- build project, SPEC determined that additional scuppers were not necessary for proper drainage of the roof. Rather, the roof only necessitated the installation of crickets between the existing scuppers to facilitate drainage of water between the scuppers. The drawing submitted with SPEC's bid reflects the location of the existing scuppers and the use of the crickets to drain any water on the roof. A-1's drawing reflects the use of additional scuppers, but the location of these additional scuppers cannot assist water drainage as the scuppers are located above the crickets, and therefore above roof level, thereby losing any effectiveness. . . . The additional scuppers provided by A-1 will not prevent the accumulation of water as required by section 2.5 and will only create unnecessary expenditure for FDOT. SPEC's design for the drainage of water from the roof is superior to that of A-1, complies with the requirements of the bidding documents and does not require unnecessary expenditure of funds. Accordingly, SPEC should be awarded the project. The Department's December 17, 1998, Notice of Intent Not to Award (Re: Informal Bid No. 6012DS) stated, in pertinent part, as follows: It is the intent of the Department of Transportation to not award the above Contract. This contract will be re- advertised at a later date. . . . ALL BIDS HAVE BEEN REJECTED On January 4, 1999, Petitioner's attorney, Alejandro Espino, Esquire, sent a letter to Department Assistant General Counsel Brian McGrail, which read as follows: This letter confirms our telephone conversation today wherein you stated that the Florida Department of Transportation ("FDOT") rejected all bids on the above referenced project because FDOT intends to rewrite the specification for the mansard roof wood replacement and because FDOT has no available funding for the project. However, you stated that FDOT will not provide a written explanation to SPEC Incorporated or any other bidder for the rejection of the bids for the project. If you believe that the above is not an accurate summary of our conversation, please contact me at your earliest convenience. Best regards. Mr. McGrail responded to Mr. Espino by letter dated January 4, 1999, which read as follows: I am in receipt of your letter this morning regarding our telephone conversation concerning the captioned matter. In response to your rendition of our conversation, I must clarify that I expressed my understanding that the specifications for the project will be reviewed, which may include the issues raised in the protest about the bid specifications, before any further action will be taken by the Department. However, the Department's decision to reject all bids is due to the unavailability of funding for this contract at the present time. I cannot speak to the future of the project with any degree of certainty, nor represent any to you or your client. This is a matter strictly for District VI to decide, and I am not involved in that decision making process. The Department will defend the decision to reject all bids based on the lack of available funding. I refer your attention to Attachment II of Informal Bid #6012DS, Contractual Obligation, Section 1.10 through 1.13. In particular, Cancellation Privileges, regarding the Department's obligations under the Notice of Informal Bid and subsequent agreement shall be subject to and contingent upon the availability of monies appropriated for this contract. Additionally, I am sure that you are aware that the bid documents clearly and repeatedly state the Department's reservation of rights to reject any and all bids for this bid letting. Based on the foregoing, it is clear that the Department's action in rejecting all bids is appropriate under Florida law, if not required, due to the lack of available funds at the present time. If Spec Inc. intends to p[rotest] the Department's decision to reject all bids, I feel it is my responsibility to advise you that the Department will seek any and all costs and attorney fees to which it may be entitled against the protest bond filed in this case. If however, Spec Inc. decides to withdraw the current protests against the intent to award filed on September 28, 1998, and the rejection of all bids filed on December 22, 1998, the Department will agree to return the protest bond in full. After you have had an opportunity to review this matter with your client, please advise at your earliest convenience how Spec Inc., wishes to proceed. Thank you for your cooperation in this matter. I look forward to a prompt response, as the hearing date is approaching rapidly. Mr. Glaria "realized that [Petitioner was] going to have a hard time [in its bid protest] to overcome the issue of lack of funding." In addition, he had the "hope that [Petitioner] would [have the opportunity to] bid the project again for the fourth time." Accordingly, he authorized Mr. Espino to file, on behalf of Petitioner, the following Notice of Voluntary of Dismissal of Formal Protest, dated January 11, 1999: Petitioner, SPEC Incorporated, hereby withdraws its formal protest, dated October 18, 1998, of the Florida Department of Transportation's notice of intent to award Informal Bid No. 6012DS, Financial Project Nos. 2519993201/25199915201, Dade County, to A-1 Duran Roofing, Inc. Upon agreement of counsel for the parties, SPEC Incorporated's bid protest bond will be returned to it. Mr. Espino, in addition, sent the following letter, dated January 11, 1999, to Mr. McGrail: Based on the Florida Department of Transportation's ("FDOT") representation that it rejected all bids for Informal Bid No. 6012DS, Financial Project Nos. 2519993201/25199915201, Dade County, because of the unavailability of funds and because of necessary amendments to the project specifications, SPEC Incorporated hereby withdraws its formal protest of FDOT's notice of intent to reject all bids. As we discussed earlier, FDOT will return SPEC Incorporated's protest bond thirty days after FDOT files . . . the final order in this matter. If you have any questions or comments, please do not hesitate to contact me. Fourth Solicitation The Project is funded through appropriations made by the Legislature in the fixed capital outlay category. 4/ Fixed capital outlay funds are subject to reversion if not obligated (through the execution of a contact or the issuance of a notice of intent to award a contract) within 19 months of their appropriation by the Legislature. In mid-January of 2001, Brenda Garner, the manager of the Department's Fixed Capital Outlay Program, advised Ms. Lyons that, if not obligated by February 1, 2001, a portion of the funds ($45,000.00) appropriated for the Project would revert. Ms. Lyons (who had not been involved, as the District's contract administrator, in the first three solicitations) quickly proceeded (in a day's time) to assemble the documents needed to solicit bids for the Project. These documents included detailed plans and specifications that the District's senior structural engineer and senior project manager had prepared, at Ms. Lyons' request, following the third solicitation, as well as "boilerplate" that the Department uses for non-design-build fixed capital outlay projects like the Project. Ms. Lyons determined that it was unnecessary to advertise for bids and that the Department only needed to solicit bids from three contractors. She selected these three contractors from the list of interested and prequalified contractors that the Department had compiled in the first solicitation. As Ms. Lyons was aware, each of the three contractors she selected (A-1, Zurqui, and Grace) was a Certified Minority Business Enterprise (MBE). She intentionally selected MBE contractors because the District was "trying to meet an MBE goal." Ms. Lyons had some professional familiarity with the three MBE contractors she selected. A-1 had just completed another roofing project for the District, and Zurqui and Grace were performing construction work at the District office complex. Ms. Lyons' decision to not include Petitioner among the three contractors asked to submit bids was not made in bad faith. Inasmuch as the Department was "in a big hurry to get that project done" she did not ask more than three contractors to submit bids. Ms. Lyons required each of the three contractors to first provide proof that it was a licensed general contractor qualified to work on the Project. After receiving such proof, Ms. Lyons then asked the three contractors to bid on the Project. A-1, Zurqui, and Grace submitted their bids on January 25, 2001. The Technical Review and Awards Committee met on January 26, 2001, to review the bids. All three bids were deemed to be responsive. A-1's bid of $58,300.00 was the lowest of the three bids. Neither Zurqui nor Grace protested the Department's proposed decision, announced in its January 26, 2001, Notice of Intent to Award, to award the contract for the Project to A-1. Only Petitioner, which had not been invited to submit a bid and had first learned of the fourth solicitation when Mr. Glaria saw the Notice of Intent to Award while at the District office complex on January 26, 2001, filed a protest.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department issue a final order rejecting in its entirety Petitioner's protest of the Department's announced intention to award Contract E-6A14 to A-1. DONE AND ENTERED this 5th day of June, 2001, in Tallahassee, Leon County, Florida. STUART M. LERNER 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 5th day of June, 2001.
The Issue Whether the Florida A&M University's intended action to reject all bids and re-advertise the project to construct "Utilities Improvement-Central Chilled Water Plant, Phase V", known as BR-389, is illegal, arbitrary, dishonest, or fraudulent.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: Parties Neel Mechanical Contracting, Inc., is a Georgia corporation authorized to do business in Florida and licensed by the Florida Construction Industry Licensing Board. Its business is air conditioning, and it specializes in larger projects such as the one at issue herein. Robert C. Sullivan is the President of Neel Mechanical. Thomas Gregory Lang is a project manager employed by Neel Mechanical and the chief estimator for Neel Mechanical; Mr. Lang is the person primarily responsible for preparing Neel Mechanical's bid proposal for Project BR-389. The Florida Board of Regents is a corporate body consisting of the Commissioner of Education and thirteen citizens appointed by the Governor and approved by three members of the Cabinet; it is subject to the general supervision and control of the Department of Education. Sections 240.203(2), 240.205, and 240.207(1), Florida Statutes (1999). The Board of Regents is a member of the State University System, is charged generally with overseeing the state universities, and has the authority to approve and execute contracts for "construction for use by a university when the contractual obligation exceeds $1 million." Sections 240.209 and 240.205(6), Florida Statutes (1999). 4/ Florida Agricultural and Mechanical University ("FAMU") is a public university located in Tallahassee, Florida, and is one of ten universities in Florida's State University System. Section 240.2011, Florida Statutes (1999). The university president is the chief administrative officer of the university and is responsible for its operation and administration. Section 240.227, Florida Statutes (1999). At the times material to this proceeding, Frederick S. Humphries was president of FAMU, and Samuel J. Houston was the Director of FAMU's Office of Facilities Planning and Construction. Mr. Houston has primary responsibility for supervising the bid process and the staff that prepared the bid documents and evaluated the bids for Project BR-389. Mr. Houston acts in this capacity on behalf of President Humphries and the Board of Regents. Mr. Houston also is ultimately responsible for the administration of Project BR-389. Bayou Mechanical, Inc. ("Bayou Mechanical") is a mechanical contractor which submitted a bid on Project BR-389. Call for Bids In Volume 25, Number 13, of the Florida Administrative Weekly, dated April 2, 1999, FAMU, on behalf of the Board of Regents, issued a Call for Bids on Project BR-389, which involves construction of a chilled water plant on the FAMU campus. The Call for Bids provided that all bidders must have a valid Florida license to do the work at the time of bid opening and a minimum of five years experience with similar projects. Project BR-389 involves a construction contract and is the fifth phase of the construction of an underground chilled water system on the FAMU campus. The project consists of constructing a portion of the system and connecting it to the existing system. The Call for Bids notified prospective bidders that sealed bids would be received at FAMU on May 4, 1999, until 2:00 p.m., after which time the bids would be opened and the bid tabulations posted. The Call for Bids further provided: "Bids must be submitted in full and in accordance with the requirements of the drawings and Project Manual." The Call for Bids advised that these documents were available at the offices of the Architect/Engineer for the project, Bosek, Gibson & Associates, Inc. ("Bosek, Gibson"), in Tallahassee, Florida. In Addendum #2 to the Project Manual, dated April 30, 1999, the date for submission of bids was changed from May 4, 1999, to May 11, 1999. The Project Manual contains Instructions to Bidders, consisting of pages 6 of 106 through 22 of 106 and dated October 16, 1989; General Conditions of the Contract for Construction, consisting of pages 23 of 106 through 106 of 106 and dated October 16, 1989; Special Conditions of the Contract, consisting of pages I-1 through I-10 and dated October 16, 1989; Supplement J to the Project Manual, consisting of pages 1 through 11 and dated February 13, 1996; Supplement K to the Project Manual, consisting of pages 1 through 5 and identified as the February 1999 Revision; Exhibit L, Supplementary Conditions to the General Conditions of the Contract for Construction, consisting of pages 2 through 16; and the Technical Specifications, which are separately identified and numbered. As noted in the Call for Bids, drawings are also included in the bid documents. Neel Mechanical, Bayou Mechanical, and Council Contracting submitted bids for Project BR-389 on May 11, 1999, the date on which the bids were opened and the price proposals were read. According to the Bid/Proposal Tabulation form that was posted from May 14 through 19, 1999, Neel Mechanical was the apparent low bidder on the base bid and on the two alternates 5/; Neel Mechanical's base bid and its bid on alternates were within FAMU's budget for the project. Bayou Mechanical submitted the second lowest bid on the base bid and the alternates; Bayou Mechanical was within the budget on the base bid but over budget on the alternates. No recommended award or intent to award was indicated on the Bid/Proposal Tabulation form. Shortly after the bids were opened, several issues were raised with respect to the bid process. First, the FAMU staff discovered that Neel Mechanical had failed to affix its corporate seal to the signature page of the bid Proposal Form and to the Bid Bond that was part of the bid submission. Second, York International Company ("York") sent via facsimile on May 11, 1999, a letter advising FAMU's Office of Facilities Planning and Construction that York intended to protest the bid. This letter raised the third issue: Of the two manufacturers identified in the project specifications, York and The Trane Company ("Trane"), only Trane manufactured a chiller that could meet the project specifications. Fourth, Mark A. Daughtery, a project manager for Bayou Mechanical, sent a letter dated May 14, 1999, to Craig Allen at Bosek, Gibson advising him that Bayou Mechanical intended to file a formal protest on Project BR-389 and identifying two issues of concern to Bayou Mechanical: Neel Mechanical's failure to affix its corporate seal to its bid submission and "the Chiller being sole sourced to Trane Company." Each of these issues is discussed in detail below. Corporate Seal The Instructions to Bidders contained in the Project Manual provide: B-16 Preparation and Submission of Bids Each Proposal shall be submitted on the form contained in the Project Manual and bid prices shall be indicated thereon in proper spaces, for the entire Work and for all Alternates. (See B-8) In the event of a discrepancy in the bid amount on the Proposal between the numeric and written quotes, the written amount will govern. Each Proposal must give the full business address of the Bidder and state whether it is an individual, corporation or partnership. Proposals by a corporation must be signed with the legal name and seal of the corporation followed by the name of the state of its incorporation and the manual signature and designation of an officer, agent or other person authorized to bind the corporation. (Emphasis added.) When it was submitted on May 11, 1999, Neel Mechanical's bid did not include the impression of its corporate seal on the bid Proposal Form signature page or on the Bid Bond submitted as part of the proposal. After the bid opening, an employee of Neel Mechanical received a telephone call from Henry Swift, FAMU's Project Manager for Project BR-389, in which he advised Neel Mechanical that its bid had not been sealed. This conversation was followed by a request from Mr. Swift, sent via facsimile transmittal to Neel Mechanical on May 13, 1999, requesting a "Letter of Clarification which confirms your status as a corporation licensed to do business in the State of Florida, registered with the Secretary of State, etc. Finally, please be sure to sign and seal your letter with your corporate seal." A letter to Mr. Swift, dated May 14, 1999, was signed and sealed by Robert C. Sullivan, President of Neel Mechanical. The letter was received in FAMU's Office of Facilities Planning and Construction on May 19, 1999. Shortly after Mr. Sullivan sent the May 14, 1999, letter, Neel Mechanical received another telephone call from Mr. Swift in which he advised Neel Mechanical that the seal needed to be physically affixed to the bid Proposal Form. Peter Lang, a project manager employed by Neel Mechanical, had business in Tallahassee, so Mr. Sullivan asked that he take the seal to Mr. Swift's office and affix it to the bid Proposal Form. When Peter Lang arrived at Mr. Swift's office, someone brought out the file and gave him the bid Proposal Form, and he affixed Neel Mechanical's corporate seal to the signature page of the form. Neel Mechanical's corporate seal was not affixed to the Bid Bond, although the seal of the surety company was on the Bid Bond when the bid was submitted. The Bid Bond was part of Neel Mechanical’s bid submission. FAMU verified on May 13, 1999, that Neel Mechanical was authorized to do business in Florida and held the requisite Florida license to perform the work required by the project. Centrifugal chiller specifications and York's letter of "intent to protest" Section 15685-1 of the Technical Specifications included in the Project Manual contains the specifications for the Centrifugal Chillers - Water Cooled to be installed as part of Project BR-389. Those specifications provide in pertinent part: PART 2 - PRODUCTS MANUFACTURERS Available Manufacturers: Subject to compliance with requirements, provide centrifugal chillers from one of the following: Trane Co., The York Int'l. UNIT DESCRIPTION: * * * Refrigerant: Chiller shall be provided with low pressure refrigerant HCFC-123. The size of the chiller specified for Project BR-389 was 2200 tons. 6/ Lane Jackins is the owner of Applied Mechanical Equipment and is a manufacturer's representative for York. He reviewed the technical specifications for the chiller contained in Part II of Section 15685-1 of the Technical Specifications for Project BR-389 and determined that York could not furnish a chiller that met the specifications. York does not manufacture a chiller of 2200 tons that uses R123 refrigerant, although it uses R123 refrigerant in smaller machines up to 750 tons. The equipment manufactured by York in the 2,000-ton range uses R134A refrigerant, which operates at different pressures than R123. The York equipment using R134A refrigerant is of an entirely different design than that using R123 refrigerant. In addition, York does not manufacture a chiller with the voltage required by the project specifications. Three or four days before the bids were to be submitted, either Mr. Sullivan or Mr. Lang spoke with Mr. Jackins about York's providing Neel Mechanical with a price for the chiller. Mr. Jackins responded that York would not submit a price for the equipment because York did not manufacture a chiller that would meet the technical specifications included in the bid documents. The Instructions to Bidders in the Project Manual provide: B-12 Basis for Bidding - Trade Names For clarity of description and as a standard of comparison, certain equipment and materials have been specified by trade names or manufacturers. To insure a uniform basis for bidding, the Bidder shall base the Proposal on the particular systems, equipment or materials specified and approved substitutes as provided in Paragraph 3.19, Substitutes, of the General Conditions. After bids are received, no equipment or materials will be approved as a substitute for the specified product. Paragraph 3.19 of the General Conditions provides: Substitutions Substitutions for a specified system, product or material may be requested of the Architect/Engineer, and the Architect/Engineer's written approval must be issued as an addendum before substitutions will be allowed. All requests for substitutions must be submitted prior to the opening of bids, and approvals shall be granted no less than seven (7) days prior to the bid date. Substitutions requested after that date will receive no consideration. Substitutions are changes in materials, equipment, methods, or sequences of construction, design, structural systems, mechanical, electrical, air conditioning controls, or other requirements of the Drawings or Specifications. (Emphasis in original.) In the portion dealing with "SPECIFICATIONS AND DRAWINGS," Section 15010 of the Technical Requirements, "MECHANICAL REQUIREMENTS," provides as follows: By submitting a bid for equipment or material other than the "Design Basis Equipment" (i.e., that which is shown on the Contract Drawings), the Contractor: Represents that he has personally investigated the proposed substitute product and determined that it is equal or superior in all respects to that specified and complies with all the requirements set forth in Paragraph 3.19 of the General Conditions; Certifies that the cost data presented is complete and includes all related costs under this Contract but excludes costs under separate contracts, and excludes the Engineer's redesign costs, and waives all claims for additional costs related to the substitution which subsequently become apparent; Will coordinate the installation of the accepted substitute, making such changes as may be required for the work to be complete in all respects; and, Certifies that the proposed equipment meets the requirements of the Contract Documents. Neither York nor any prospective bidder on Project BR-389 requested within the time limits specified in Paragraph 3.19 of the General Conditions that a York product be substituted for the chiller specified for Project BR-389. Mr. Lang contacted Craig Allen at Bosek, Gibson a day or two before bids were to be submitted and told Mr. Allen that York was not able to provide a chiller that met the project specifications. According to Mr. Lang, Mr. Allen responded that he "was totally surprised that they [York] didn't have a machine that was going to meet this spec." 7/ Mr. Lang based Neel Mechanical's bid on pricing information it received from Trane, which manufactures a chiller that meets the project specifications. An additional reason Mr. Lang based Neel Mechanical's bid on the Trane equipment was his belief that, all things being equal, FAMU preferred to have Trane equipment installed in Project BR-389 because other chillers installed at FAMU were manufactured by Trane. Mr. Lang believed that the specifications for the chiller had been deliberately drawn to require use of Trane equipment. In a letter dated May 11, 1999, the day the bids for Project BR-389 were submitted and opened, Mr. Jackins notified FAMU's Office of Facilities Planning and Construction that York intended to protest the bid on Project BR-389. Mr. Jackins stated in the letter: The chiller as specified is a flat specification. There is only one manufacturer that will meet the criteria as spelled out in the contract documents. This is not in the best interest of the University System of Florida or the State of Florida. An official protest outlining all the proprietary items will be forthcoming. The letter was sent via facsimile on May 11, 1999, prior to the time the bids were opened. Mr. Jackins believed that the "flat specification" was not in the best interest of the university because it precluded competitive pricing for the chiller. Mr. Sullivan learned on May 11 or May 12, 1999, that York intended to file a bid protest. Believing that Neel Mechanical would be awarded the contract as the apparent low bidder, Mr. Sullivan met with Mr. Jackins and several employees of Neel Mechanical, including Greg Lang, at which time Mr. Sullivan proposed an alternative to York's filing a bid protest. Mr. Sullivan told Mr. Jackins that, in his opinion, the situation could best be handled through a meeting between Neel Mechanical, Mr. Jackins, Mr. Houston, and the project engineers. According to Mr. Sullivan's plan, Mr. Jackins could present York's pricing, and FAMU, with the engineers’ assistance, could decide if they wanted to switch from the equipment specified in the bid documents to York equipment. If FAMU agreed to accept the York equipment, then, if it were awarded the contract, Neel Mechanical would purchase the York equipment rather than the Trane equipment Neel Mechanical had included in its proposal. After some discussion, Mr. Jackins agreed with Mr. Sullivan's proposed solution. Post-bid activity from the perspective of Neel Mechanical Immediately after the bids were opened, Craig Allen, an employee of Bosek, Gibson telephoned Mr. Lang and asked if Neel Mechanical was still happy with its bid. According to Mr. Lang, Mr. Allen stated that "this is a standard practice of mine on bid day to call the apparent low bidder and just make sure that they haven't found some colossal error in their math or whatever that made them low." 8/ Mr. Lang told Mr. Allen that Neel Mechanical was still happy with its bid. After this conversation, Mr. Lang waited for the letter from FAMU awarding the contract to Neel Mechanical. He was not concerned that the award was not made immediately because, in his experience, some time always passed between bid opening and the time the winning bidder received the contract. However, in anticipation of the award of the contract, Neel Mechanical proceeded to talk with subcontractors, to start scheduling the project, and to line up equipment that it would need to purchase for work on the project. Neel Mechanical employees also made several visits to the site of the project. At some point after the bids were opened, Mr. Sullivan heard that the procurement officials at FAMU were discussing with FAMU's legal department the issues of Neel Mechanical's failure to affix the corporate seal to its bid and the ramifications of York’s threatened bid protest. Mr. Sullivan responded by telephoning the office of FAMU's general counsel. He spoke with Faye Boyce about these issues and told her that he considered his failure to affix the corporate seal to Neel Mechanical's bid to be insignificant. He also advised her that he had worked out an arrangement with the representative of York whereby York would withdraw its protest and Neel Mechanical would talk with the engineers about the York chiller so a decision could be made whether they wanted to use the York equipment or stay with the Trane equipment which met the project specifications. In a subsequent telephone conversation with Ms. Boyce, Mr. Sullivan received the impression that she had looked into the issues he had raised in their previous telephone conversation. Mr. Sullivan could not recall Ms. Boyce's exact words, but had the impression from their conversation that the contract award to Neel Mechanical had been approved and that confirmation would be sent out shortly. At some point after Mr. Sullivan's conversation with Ms. Boyce, Greg Lang telephoned Henry Swift to find out the status of the contract award. Mr. Swift told Mr. Lang that, in Mr. Lang's words, "the problem had been reviewed and found to be insignificant, and . . . that the letter of intent to award had already been made." 9/ According to Mr. Lang, Mr. Swift told him that FAMU would notify the bidders of the intent to award the contract to Neel Mechanical. On the basis of this conversation, Mr. Lang believed that Neel Mechanical would receive a letter "just any day." When Neel Mechanical did not receive a letter, Mr. Lang telephoned Mr. Swift again. According to Mr. Lang, Mr. Swift stated that he did not know why the matter was being held up. After this second conversation with Mr. Swift, Mr. Lang telephoned Mr. Houston several times but did not receive a return call. Mr. Lang then wrote a letter to Mr. Houston, dated July 9, 1999, in which he inquired about the status of the contract award: It has now been almost two months since you received bids for this project, and as the low bidder we have still not received notification of your intent to award. We have had several telephone conversations with the attorney representing the regents in this matter, and we were lead [sic] to believe that we would have received information before this time. Please review this matter and call us. If there are outstanding issues which concern you, we would like to know about them and work with you to get them resolved. Post-bid activity from the perspective of FAMU Mr. Houston and members of his staff considered the omission of the corporate seal to be a minor deficiency in Neel Mechanical's bid proposal. Nonetheless, even though Neel Mechanical had been allowed to seal the bid Proposal Form, Mr. Houston asked FAMU's Office of General Counsel to conduct research and determine if the deficiency was one that could be waived. Mr. Houston was not involved in drawing up the technical specifications for Project BR-389; rather, he relied on the project engineers to be familiar with the products to be used in the project. Mr. Houston advised the project engineers that he wanted a competitive bid, and, because the chiller was a major component of the project, he instructed the engineers to prepare specifications that could be met by equipment produced by at least two manufacturers. In a letter dated May 18, 1999, Craig Allen, the engineer at Bosek, Gibson who prepared the specifications for Project BR-389, notified Mr. Houston that he was not aware until the "notice of protest" was received from York that York could not provide a chiller of the required capacity which used R123 refrigerant. Mr. Allen advised Mr. Houston that Mr. Jackins, the York representative, had indicated that he wanted to meet with Mr. Allen to discuss York's chiller selections for the project. A recommendation that the contract be awarded to Neel Mechanical was signed on June 8, 1999, by Phyllis Nottage, the Assistant Director of FAMU's Office of Facilities Planning and Construction; on June 10, 1999, by Mr. Houston; on June 14, 1999, by Louis Murray, an Associate Vice President of FAMU; and on June 14, 1999, by Robert Carroll, a Vice President of FAMU with supervisory authority over the Office of Facilities Planning and Construction. The recommendation was contained in a document entitled "Award of Construction Contract," which provided as follows: On May 11, 1999, bids were received for the above-referenced project within the approved budget for the Base Bid and Alternates One (1) through (2), in the total amount of $3,996,400. The requirements for the Minority Business Enterprise Plan as set forth in the project specifications have been satisfied by the Contractor. The consulting Architect/Engineer and the University Facilities Planning and Construction Office recommend the award of this contract to Neel Mechanical Contractors, Inc. President Humphries signed the Award of Construction Contract on June 17, 1999. The preparation and signing of the Award of Contract form and the preparation of the Letter of Intended Decision were part of the bid review process, but Mr. Houston considered them preliminary, without effect until the final decision on the contract award was made and the bidders were formally advised of FAMU's intended decision with respect to the award of the contract. On June 21, 1999, Mr. Houston received a telephone call from Kenneth Ogletree, Director of the Board of Regents’ Office of Facilities Planning, 10/ in which Mr. Houston was advised that the Board of Regents had received an inquiry from a legislator in reference to Project BR-389 and requesting that Mr. Houston prepare a response to the legislator's inquiry. Mr. Ogletree sent Mr. Houston, via facsimile on June 21, 1999, a copy of a letter dated May 28, 1999, from Carey Huff, President of Bayou Mechanical, to Durell Peaden, a member of the Florida House of Representatives and a State Representative from District In the letter, Mr. Huff complained that Neel Mechanical, although apparent low bidder for Project BR-389, had failed to seal the bid Proposal Form and the Bid Bond and that, therefore, Neel Mechanical's bid was non-responsive. Mr. Carey requested that Representative Peaden contact FAMU so that Bayou Mechanical would be awarded the contract for the project as lowest responsive bidder. Mr. Carey stated in his May 28, 1999, letter to Representative Peaden that the college had refused to allow Bayou Mechanical to examine Neel Mechanical's bid but that Mr. Houston had informed them that Neel Mechanical had failed to seal its bid properly. 11/ Mr. Ogletree also sent Mr. Houston, via facsimile on June 21, 1999, a copy of a letter from Representative Peaden to Dr. Adam W. Herbert, Chancellor of the State University System. In his letter, Representative Peaden asked that Dr. Herbert look into the matter and "see that all equity was followed in the bid process." In response to the Board of Regents' request that he respond to Representative Peaden's inquiry, Mr. Houston prepared a letter dated June 22, 1999. In this letter, which was directed to Mr. Ogletree, Mr. Houston stated that FAMU wished to award the contract for Project BR-389 to Neel Mechanical as the low bidder on the project. Mr. Houston stated that FAMU considered Neel Mechanical's failure to affix the corporate seal on the bid Proposal Form and the Bid Bond to be a minor discrepancy. Mr. Houston further stated that FAMU's Office of General Counsel agreed with the conclusion regarding the corporate seal issue and recommended that the contract be awarded to Neel Mechanical. Finally, Mr. Houston advised Mr. Ogletree that President Humphries had signed the "Award of Construction Contract" form and that Mr. Houston's office was preparing "Letters of Intended Decision" to be sent to the bidders. The final decision on the contract award had not been made on June 10, 1999, when Mr. Houston signed the recommendation that the contract for Project BR-389 be awarded to Neel Mechanical, nor had it been made on June 22, 1999, when Mr. Houston wrote his letter to Mr. Ogletree. Rather, on June 22, 1999, the issues raised with respect to the bid process for Project BR-389 were still being reviewed by Mr. Houston and his staff and by FAMU's Office of General Counsel. The decision to reject all bids on Project BR-389 was made on June 24, 1999. On that date, Mr. Houston met with Vice President Murray, FAMU's attorney, and the Assistant Director of the Office of Facilities Planning and Construction, and the issues relating to the bidding process for Project BR-389 were reviewed. Mr. Houston identified these issues as Neel Mechanical's failure to seal its bid Proposal Form and its Bid Bond; potential protests from York and from Bayou Mechanical; and the problem relating to the technical specifications for the chiller. Of these issues, Mr. Houston considered the most serious the fact that, of the two manufacturers listed in the bid specifications, only Trane could provide the chiller for Project BR-389. The chiller was a major part of the project, and Mr. Houston wanted at least two sources for the chiller in order to encourage competition so that FAMU would get the lowest possible price for the project. Mr. Houston was also concerned that the specifications for the chiller created a de facto "sole source" bid and that the bid solicitation would, therefore, be illegal because FAMU didn't satisfy the statutory requirements necessary for it to specify that the chiller be purchased from a sole source. 12/ FAMU's attorney advised the participants at the June 24, 1999, meeting that the legal department had found no precedent within the State University System for waiving the requirement in the bid documents that the bid Proposal Form and the Bid Bond be sealed with the bidder's corporate seal. The participants at the meeting considered all of the outstanding issues and decided that it would be in the best interests of FAMU to reject all bids submitted on May 11, 1999, for Project BR-389. After the decision to reject all bids was made, Mr. Houston marked an "X" through the Award of Construction Contract form signed by President Humphries, and he prepared letters notifying the bidders of the intent to reject all bids for Project BR-389. Neel Mechanical's bid protest In a letter to Neel Mechanical dated July 6, 1999, Mr. Houston stated: Bids on the above referenced project were opened May 11, 1999. However, we regret to inform you that all Bids have been rejected as in the best interest of the University. This project is presently being re-advertised in the Florida Administrative Weekly. The University apologizes for the time it has taken to reach this decision. We trust that you will cooperate with our course of action and look forward to receiving a proposal from you at the next opening. Thanks for your continued interest in the State University System's Construction Program. The envelope containing Mr. Houston's July 6, 1999, letter was post-marked July 9, 1999, and the letter was received by Neel Mechanical on Tuesday, July 13, 1999. The Instructions to Bidders in the Project Manual provide: Rejection of Bids The Owner reserves the right to reject any and all bids when in the opinion of the Owner such rejection is in the best interest of the Owner. Paragraph B-1 of the Instructions to Bidders provides that the Board of Regents is the owner of the project. On July 13, 1999, after Neel Mechanical received the letter from Mr. Houston notifying it that all bids on Project BR- 389 had been rejected, Mr. Sullivan and Greg Lang went to Mr. Houston's office to urge him to rescind the decision and award the contract to Neel Mechanical. Mr. Sullivan told Mr. Houston that they felt that the issue regarding the corporate seal was insignificant. At this time, Mr. Sullivan also told Mr. Houston that he and York had reached an agreement whereby York would withdraw its protest and Neel Mechanical would present the York product to the University and let the University decide if it wanted to go with the Trane chiller or switch to a York product. Mr. Sullivan thought that Mr. Houston was sympathetic to Neel Mechanical but that the decision had been made by the administration and the legal department. Mr. Sullivan also got the impression that the decision to reject all bids was based on the corporate seal issue. On July 13, 1999, Neel Mechanical hand-delivered its Notice of Intent to Protest Bid to Samuel J. Houston, Director of the Office of Facilities Planning and Construction at Florida A&M University and to FAMU's Office of General Counsel. There is no dispute that the Notice of Intent to Protest Bid was actually received in Mr. Houston's office on July 13, 1999. On July 23, 1999, Neel Mechanical hand-delivered its Formal Written Protest and Petition for Formal Administrative Proceedings to Sam Houston, Director, Florida A&M University, Facilities Planning Department, Plant Operations Facility, Building A, Room 100, 2400 Wahnish Way, Tallahassee, Florida 32307 and to FAMU's Office of General Counsel. Also on July 23, 1999, a copy of the Formal Written Protest and Petition for Formal Administrative Proceedings was sent by United States Mail to the Board of Regents, Office of General Counsel, 325 West Gaines Street, Suite 1454, Tallahassee, Florida 32399-1950. There is no dispute that the Formal Written Protest and Petition for Formal Administrative Proceedings was actually received in Mr. Houston's office on July 23, 1999. The Instructions to Bidders in the Project Manual dated October 16, 1989, provide: Bid Protest To be considered, a bid protest must be received by the Director, Capital Programs, Florida Board of Regents, 1601 Florida Education Center, 325 West Gaines Street, Tallahassee, Florida 32399-1950, as provided in Section 120.53, Florida Statutes. Failure to file a notice of protest in this manner shall constitute a waiver of the Bidder's right to proceedings under Chapter 120, Florida Statutes. * * * B-26 Special Conditions Bidders shall be thoroughly familiar with the Special Conditions and their requirements. (Emphasis added.) Supplement J to the Project Manual, consisting of pages 1 through 11 and dated February 13, 1996, provides in pertinent part: (This supplement revises portions of the Project Manual for State University System projects dated October 16, 1989, and supersedes any other previously issued supplements related to the referenced topics.) Revise the Instructions to Bidders Section of the Project Manual as Follows: * * * Revise Paragraph B-22, Bid Protest, to read as follows: B-22 Bid Protest Any person who is affected adversely by the Board of Regents decision or intended decision shall file with the Associate Vice Chancellor, Capital Programs, Florida Board of Regents, 1602 Florida Education Center, 325 West Gaines Street, Tallahassee, Florida 32399-1950, a notice of protest in writing within 72 hours, excluding Saturday, Sunday, and State legal holidays, after receipt of the bidding documents if the protest is directed toward the bidding conditions or after the notice of the Board of Regents decision or intended decision on contract award or bid rejection if the protest is directed toward contract award or bid rejection. Thereafter, a formal written protest by petition in compliance with Section 120.53(5), and Section 120.57, F.S., must be filed with the Associate Vice Chancellor, Capital Programs, Florida Board of Regents, 1602 Florida Education Center, 325 West Gaines Street, Tallahassee, Florida 32399-1950, within ten (10) days after the date the notice of protest was filed. Failure to file a timely notice of protest of [sic] failure to file a timely formal written protest petition shall constitute a waiver of protest proceedings. Any protest filed prior to receipt of the notice of the Board of Regents decision or intended decision will be considered abandoned unless renewed within the time limit provided for protests. (Emphasis added.) Supplement K to the Project Manual, consisting of pages 1 through 5, provides in pertinent part: SUPPLEMENT TO PROJECT MANUAL ISSUED BY FLORIDA A&M UNIVERSITY REGARDING PARAGRAPH B-26, SPECIAL CONDITIONS (February 1999 Revision) B-26 SPECIAL CONDITIONS - This supplement modifies paragraph B-26 by adding and clarifying bidding requirements and instructions. * * * PROTEST PROCEDURES: This paragraph supersedes the paragraph (No. B-22) under the general terms and conditions whereby the notice of intended protests or written formal protests including bonding requirements from bidders must be submitted to: Mr. Sam Houston, Director, Florida A&M University, Facilities Planning Department, Plant Operations Facility, Building A, Room 100, 2400 Wahnish Way, Tallahassee, FL 32307. A bid tabulation with the recommended award(s) will be posted at the address indicated in Paragraph B-26, sub- paragraph 6 (Posting of Bid Tabulation). Any notice of protest or formal written protest to the award or intended award which is filed before the bid tabulation posting is null and void. To be considered, a notice of protest or formal written protest must be filed within the time limits set forth in Section 120.57(3)(b), Florida Statutes. Any notice of protest or formal written protest to the specifications issued by the University must be filed within the time limits set forth in Section 120.57(3)(b), Florida Statutes. Any notice of protest or formal written protest to any amendment issued by the University must be filed within the time limits set forth in Section 120.57(3)(b), Florida Statutes. (Emphasis added.) The instructions regarding the filing of bid protests in Supplement K supersede the instructions in Supplement J, which is dated February 13, 1996, and in the Instructions to Bidders in the Project Manual, which are dated October 16, 1989. Summary The evidence presented by Neel Mechanical is sufficient to establish that it timely filed its Notice of Intent to Protest and its Formal Written Protest and Petition for Formal Administrative Proceedings by hand-delivering the documents to Mr. Houston, at his office on the FAMU campus. The evidence presented by Neel Mechanical is not sufficient to establish with the requisite degree of certainty that FAMU acted fraudulently, arbitrarily, illegally, or dishonestly in deciding that it was in the best interest of FAMU to reject all of the bids submitted on May 11, 1999, for Project BR-389. First, FAMU's concerns that, by inadvertently including a technical specification that could be met by only one manufacturer, it had limited competition with respect to the chiller to be used in Project BR-389 and had inadvertently put out an illegal "sole source" specification were legitimate concerns. Mr. Houston instructed the engineer who prepared the technical specifications that he wanted the specifications drawn so that at least two manufacturers could provide the product, and the engineer prepared specifications relating to the "available manufacturers" which clearly contemplated that a chiller meeting the technical specifications could be provided by both York and Trane. FAMU did not act arbitrarily when it considered as one factor underlying the decision to reject all bids the lack of precedent in the State University System for waiving the requirement that the bid Proposal Form and Bid Bond carry the corporate seal of a corporate bidder. The evidence submitted by Neel Mechanical is not sufficient to establish with the requisite degree of certainty that the corporate seal issue was ultimately the only or even the major factor on which FAMU's decision to reject all bids was based. Mr. Houston identified the possibility that bid protests would be filed by York and by Bayou Mechanical as factors which FAMU considered in deciding to reject all bids. Nonetheless, the evidence taken as a whole permits the inference that the focus of the concern about the potential bid protests was not on avoiding the protests but on the validity of the issues raised by York and Bayou Mechanical. Accordingly, FAMU did not act arbitrarily when it considered these potential bid protests as one factor contributing to the decision to reject all bids. The evidence presented by Neel Mechanical is not sufficient to establish that the "Award of Contract" form executed by President Humphries on June 17, 1999, or Mr. Houston’s June 22, 1999, letter to Mr. Ogletree bound FAMU to award the contract to Neel Mechanical or that the subsequent decision to reject all bids defeated the purpose of the competitive bidding process.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Florida Agricultural and Mechanical University enter a final order dismissing the Formal Written Protest and Petition for Formal Administrative Proceedings filed by Neel Mechanical Contractors, Inc., and denying Neel Mechanical's Motion for Assessment of Attorney's Fees, insofar as it is based on the provisions of Section 120.595, Florida Statutes. Based on the foregoing Findings of Fact and Conclusions of Law, Neel Mechanical's Motion for Assessment of Attorney's Fees, insofar as it is based on the provisions of Section 120.569(2)(e), Florida Statutes, is denied. DONE AND ENTERED this 12th day of November, 1999, in Tallahassee, Leon County, Florida. PATRICIA HART MALONO 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 12th day of November, 1999.
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.
Findings Of Fact The Department's Office of Overpayment, Fraud and Recoupment collects welfare overpayments which consist of Aid to Families with Dependent Children (AFDC), food stamps and Medicaid monies. Under pertinent Federal Regulations, the Department has the responsibility to collect these overpayments through a series of demand letters. It has been the practice of the Department in the past, and continues to be as evidenced by the Invitation To Bid at issue, for the Department to obtain a commodity/service vendor who will use individual's names supplied by the Department to mail out on a regular basis demand letters or billing statements as well as delinquent notices. These letters, statements, and notices are accompanied with a return envelope for the client to remit his or her payment. The pertinent provision of the subject Invitation To Bid is section 30-700. The Invitation To Bid for 1989 and 1990, which is under protest in this proceeding, is essentially identical to the same bid specifications in the 1988-1989 Invitation To Bid procurement process, which was the first year that the Department procured these services. That section of the Invitation To Bid at issue states: 30.700 Proposed Self-Mailer Packages or Envelopes for Notices This section shall contain the bidder's proposed self- mailer packages or envelopes for the specified notices. * * * Section 50 of the Invitation To Bid contains the various phases of the evaluation process by which the agency will evaluate the vendor's proposals and select a contractor. Section 50.300, Phase I contains a requirement that any proposal that is incomplete or non-responsive or in which there is significant inconsistencies or inaccuracies may be rejected by the Department. Three bids were received for the 88-89 procurement and for the 89-90 procurement at issue herein. Moore bid the Petitioner bid in each of those years. Moore was the only bidder in each of the two years who did not submit an example or sample of its proposed self mailer. There was a bidder's conference provided by the Department prior to the submission to bids in the 1988 procurement. The bidders then were specifically instructed during that conference "the bid will be award to the bidder with the lowest bid price that provides a product sample and bid scores well in the evaluation process." Mr. Holland of Moore Business Forms, the petitioner was present at that 1988 bidders conference and later received the questions and answers resulting from that conference in written form from the agency. The 1988 bidding effort and circumstances surrounding are not directly relevant to the questions of specification in the 1989 invitation to bid, the vendors responses thereto and the evaluation and interpretation of the specification and responses conducted by the agency as to the 1989 invitation to bid and result in responses since the specification at issue was the same as it was in the 1988 invitation to bid, and since Mr. Holland was present at the 1988 Bidders Conference at which that specification was interpreted as requiring the provisions of an actual product sample with in response to that specification it must be found that Mr. Holland and therefore the Petitioner was on notice that the agency policy was to interpret that specification as requiring submission of a product sample. The other vendors uniformly submitted product samples in response to the 1989 invitation to bid at issue, and submitted them in response to the 1988 invitation to bid as well. Thus it has not been established by the Petitioner that the specification at issue cause any confusion or ambiguity which resulted in the Petitioner legitimately being misled in making its response to this specification in which occasion any undo competitive disadvantage to the Petitioner in formulating its response to this specification. Although the Petitioner objects to the fact that no bidders conference was convene prior to submittal of bids in the 1989 procurement effort, that bidders conference was not mandatory but was scheduled in 1988 at the request of the proposed vendor. No vendor requested the bidders conference as to the 1989 procurement, and so none was held. No vendor including the Petitioner inquired of the agency before submission of the bids in 1989, as to whether a sample was required. The evidence reveal that all the other bidders understood that a sample was required and submitted one. The agency personnel Mr. Bartlett and Ms. Meyers, in charge of evaluating the responses to the invitation to bid established that it was consistent agency policy and there own interpretation of that specification that a product sample be submitted as part of the bid response. That interpretation of the specification and the resulting evaluation of the bid responses to the invitation to bid at issue was not shown to be unreasonable. A fair reading of that specification dictates the finding that product sample submission was a requirement of the specification and failure to comply would vendor the bid submittal unresponsive in this regard. Further, it was demonstrated by the Respondents evidence that it is normal custom and usage in the business form production industry to produce samples for prospective customers to evaluate, and thus this also demonstrates the lack of ambiguity and the adequate clarity of the specification at issue. In view of the opportunity it had to ascertain the clear meaning of this specification in both annual procurement efforts in which it was employed, the Petitioner did not demonstrate any basic for being confused as to what the specification meant or any legitimate basic for its failure to comply with it by submitting a product sample, that is the proposed "self mailer package" it propose to provide the Department. Moreover, and most pointedly, to the extent that the Petitioner is seeking to attack this specification as being ambiguous or unclear or otherwise not revealing the type of response the agency wanted, the attack is untimely. The Petitioner should have challenged this specification, if it chose to do so, within 72 hours of receipt of the invitation to bid. If fact no challenge was raised until after the award when the instant Petitioner was filed. In any event the agency personnel charged with evaluating the responces to the Invitation to BID assigned the various vendor response the three evaluators assigned the following points for the proposed self mailer package response to the specification at issue: the response by the Petitioner was given a scoring 0, -40, and 0 by the three members of the evaluation team. The UARCO proposal, which was initially announced winner, was sccorded a score of 100, 90, 100, and the response by Direct Mail Inc., was recorded a score of 100, 90, 70. The was because Moore merely submitted a sample list of specifications for it proposed self mailer, rather than complying with the specification and providing an actual sample of how the product would look. The scoring method used was that notice to all vendors by invitation to bid. The evaluation team followed the evaluation criteria in waiting, which the agency published in the invitation to bid. There was no showing that the scoring was arbitrarily, unreasonably, or illogically performed. If the specification indeed requires submission of a product sample, then the evaluation team members correctly scored the Petitioner's response, and correctly found it the least responsive to the three bids in this particular. In fact the evidence of record establish that the specification clearly require the submission of the actual product sample of the "self mailer package" as a proper response to that specification to the invitation to bid. Since the Petitioner fail to submit one and the other vendors did so, then Moore should be rated the least responsive of the three. There was no showing that this scoring and ranking was unreasonable, inappropriate, or constitute a departure from a clear reading interpretation of the bids specification. The Respondent agency has moved to tax costs against the Petitioner in accordance with Section 287.042.(2)(c), Florida Statutes (1989), with regard to the costs attributable to the time spent by agency staff members in preparing for and conducting their efforts in this proceeding, as well as document copy costs. Ms. Meyer spend two hours preparing for hearing as well as time spent in the hearing, which lasted approximately two and one-half hours. Jim Payne and Harry Greenwood, for the Department, also attended the Hearing; and the costs should be assessed corresponding to the two and one-half hours of hearing time. Since the agency has prevailed herein, the costs contained in Respondent's Exhibit 10, which totaled $516.05, should be assessed against the bond posted by the Petitioner.
Recommendation Having considered the foregoing findings of fact, conclusions of law, the evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is therefore RECOMMENDED that the petition filed by the Petitioner be denied, and that the subject contract be awarded to UARCO Business Forms, Inc. It is further recommended that costs be taxed and awaraded to the Respondent in the amount of $516.05 and that the bond posted by the Petitioner be estreated in that amount. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of February 1990. P. MICHAEL RUFF 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 9th day of February 1990. Copies furnished: Robert W. Hollan Account Executive Moore Business Form 1535 Killearn Center Boulevard Suite B-1 Tallahassee, Florida 32317-4287 Robert L. Powell Assistant General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 UARCO Inc. Attn: Robert Pruitt 401 North Office Plaza Post Office Box 989 Tallahassee, Florida 32302 Direct Mail Specialists Inc. Attn. Shirley H. Fleetwood 1801-B South Monroe Street Tallahassee, Florida 32301
The Issue The issue is whether Kelly Services is the lowest responsive bidder on Bid No. 89-23 and should be awarded the bid.
Findings Of Fact On June 2, 1988, the School Board of Bay County issued Bid Request No. 89-23 for garbage collection services at thirteen locations. A quotation sheet was included in the bid package. The quotation sheet indicated the thirteen locations with a blank next to each location and a dollar sign in front of each blank where each bidder was to indicate its average monthly total charge for each location. There was also a quotation schedule where the bidder was to indicate the calculations which went into the total bid for each location. The bid request provided: The Board reserves the right to waive formalities and to reject any and all bids or to accept any bid or combination of bids deemed in the Board's best interest and the decision of the Board will be final. Bidders desiring that their bid be considered on an all-or-none basis, either in whole or part, shall so indicate. It is the intent of this bid request to secure prices and establish contracts for garbage collection services for the twelve schools specified herein and the District Maintenance Department. Awards will be made by location and will be based on an average monthly total charge as calculated on the quotation sheet. The bids were opened at 10:00 am., June 13, 1988, at the offices of the Bay County School Board. Three completed bid packages were submitted. Kelly Services, Argus and M&O each submitted a completed bid quotation sheet containing the bid for each location. M&O also submitted a letter which stated: We would like to submit this bid on an all- or-nothing basis as specified in paragraph four of the cover letter to the bid. For an estimated cost of $3,391.84. The quotation sheet and quotation schedule submitted by M&O did not reflect the all-or-nothing bid amount. Instead, the quotation sheet and quotation schedule showed a total bid of $3,738.24 when calculated by location. Based on the bids submitted by each bidder as shown on the quotation sheet add quotation schedules, Kelly Services was low bidder on five locations (Callaway, Tyndall, Waller, Southport, and Cedar Grove) ; Argus was low bidder on six locations (Parker, Hiland, Haney, Mosley, Beach and Merritt Brown); and M&O was low bidder on two locations (West Bay and the District Maintenance Department). Prior to the deadline for submitting bids, John Harrison, Purchasing Agent for the Board, responded to an inquiry from M&O by advising M&O that it could submit two bids, one as specified in the Bid Request by location and one as an all-or- nothing bid. No other bidders were advised that they could submit two bids. At the bid opening, M&O did not submit a quotation sheet or schedule for its all-or-nothing bid. A bid which did not have a breakdown per dump per container per facility would not be acceptable to the Board and does not meet the specifications in the Bid Request. The breakdown per dump per container per location is necessary to verify proper invoicing for specific locations on months when there is a change in the number of dumps or containers at that location. After opening the bids, the Board compiled the low bid for each location and then totaled that list. That total of $3,606.09 was greater than the all-or-nothing bid by M&O. Because M&O's all-or-nothing bid failed to meet the specifications by not having a location breakdown the Board contacted M&O to determine if its "estimated" bid was firm and to request a breakdown on the quotation schedule form for the all- or-nothing bid. On June 15, 1988, two days after the bid opening, M&O submitted a letter to the Board clarifying that its all-or- nothing bid was a firm bid for each location and M&O submitted a quotation schedule for each location per dump per container (see page 7 of Joint Exhibit 1 and the last page of Joint Exhibit 2). The charge for each location in this quotation schedule is different than the quotation schedule submitted by M&O at the bid opening and is for the most part lower per location than either M&O's first quotation schedule or the low bids taken from the quotation schedules submitted at the bid opening. Based on the letter and all-or-nothing quotation schedule filed by M&O on June 15, 1988, the Board determined to award the bid for garbage collection services to M&O for the all- or-nothing bid of $3,391.84.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is RECOMMENDED that The School Board of Bay County enter a Final Order rejecting all bids and readvertising the bid request for garbage collection services as specified in Bid Request No. 89-23. DONE and ENTERED this 13th day of September, 1988, in Tallahassee, Florida. DIANE K. KIESLING 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 13th day of September, 1988. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 88-3768BID The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on the proposed findings of fact submitted by the parties in this case. Specific Rulings on Proposed Findings of Fact Submitted by Petitioner, Kelly Services: 1. Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1-3(1-3); 4-6(3); 7-11(7-11); and 12 (9) Specific Rulings on Proposed Findings of Fact Submitted by Respondent, School Board of Bay County: Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 1(2); 3(10&11); and 5(8). Proposed findings of fact 6, 7, and 9 are irrelevant. The first sentence of proposed finding of fact 2 is unsupported by the competent, substantial evidence. The remainder of proposed finding of fact 2 is adopted in substance as modified in Finding of Fact 3. Proposed finding of fact 4 is rejected as being unsupported by the competent, substantial evidence. The last sentence of proposed finding of fact 5 is rejected as being argumentative, conclusory and unsupported by the competent, substantial evidence. Proposed finding of fact 8 is unnecessary. Specific Rulings on Proposed Findings of Fact Submitted by Intervenor, Argus Services, Inc.: Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parentheses is the Finding of Fact which so adopts the proposed finding of fact: 2-4(1-3); 6-8(5); 9 & 10(6) 11(3); and 12(11). Proposed findings of fact 1 and 5 are unnecessary. Proposed findings of fact 13-17 are rejected as constituting argument and not findings of fact. COPIES FURNISHED: Jeffrey P. Whitton Attorney at Law Post Office Box 1956 Panama City, Florida 32402 Franklin R. Harrison Attorney at Law 304 Magnolia Avenue Panama City, Florida 32401 Scott W. Clemons Attorney at Law Post Office Box 860 Panama City, Florida 32402 School Board of Bay County Post Office Drawer 820 Panama City, Florida 32402-0820 M&O Sanitation, Inc. 266 N. Star Avenue Panama City, Florida 32404
