The Issue The issues in each case are whether, pursuant to Sections 489.141 and 489.143, Florida Statutes (2003), a claimant is entitled to payment from the Construction Industries Recovery Fund, and, if so, whether, pursuant to Section 489.143(7), Florida Statutes (2003), Respondent may automatically suspend the residential contractor's license of Petitioner until Petitioner reimburses Respondent for the paid claim.
Findings Of Fact Petitioner is licensed as a certified residential contractor, holding license number CRC 013599. Respondent first issued a residential contractor's license to Petitioner in 1978, and Petitioner has been continually licensed since that time. Petitioner has never been disciplined by Respondent or any local governmental agency. On January 29, 2004, Respondent transmitted to the Division of Administrative Hearings seven files containing administrative complaints alleging disciplinary breaches against Petitioner for many of the transactions covered in the nine subject cases. These seven new cases have not yet been heard, and Respondent has not yet entered any restitution orders against Petitioner. In the past, Petitioner has placed his residential contractor's license with various corporations to qualify them to perform residential construction. In February 1999, Petitioner met with Lori Thomson, president of Thomson Homes, Inc., to discuss placing his license with her residential construction company. Now inactive, Thomson Homes, Inc., had been in the residential construction business since at least 1994, operating out of an office in Palm Beach County, which is also the location of all but one of the residential construction jobs that are the subject of these cases. Since 1994, Thomson Homes, Inc., had used the general contractor's license of Ms. Thomson's husband, Steven Thomson, to qualify to perform residential construction. During the time that his license qualified Thomson Homes, Inc., Mr. Thomson believed that he and his wife owned the corporation equally and that she served as the president and he served as the vice-president. In the summer of 1998, Mr. Thomson filed for divorce from Ms. Thomson. In February 1999, Ms. Thomson fired Mr. Thomson from Thomson Homes, Inc. Shortly thereafter, Mr. Thomson learned that Ms. Thomson had caused all of the stock to be issued to her when the corporation was formed, and that she had assumed all of the officer and director positions. In early March 1999, Mr. Thomson cancelled all of the building permits that he had obtained on behalf of Thomson Homes, Inc., and withdrew his general contractor's license from Ms. Thomson's corporation, effective March 20, 1999. When Mr. Thomson withdrew his license from Thomson Homes, Inc., it was in the process of building or preparing to build about ten homes. At no time during Petitioner's discussions with Ms. Thomson was he aware that Thomson Homes, Inc., was actively involved in construction. Eventually, Ms. Thomson and Petitioner agreed that Petitioner would place his residential contractor's license with Thomson Homes, Inc., and would supervise the corporation's construction activities. In return, Thomson Homes, Inc., would pay Petitioner $500 weekly and 35 percent of the profits. After filing the necessary documentation in April 1999, Petitioner qualified Thomson Homes, Inc. effective April 22 or 26, 1999. Petitioner advised Ms. Thomson that he had other work to do for another month, so he could not start with Thomson Homes, Inc. immediately. Ms. Thomson told him that she had to get financing arranged for several signed contracts and did not have any construction taking place at the time. The record is unclear whether this delay took place after the initial agreement between Petitioner and Ms. Thomson or after Petitioner formally placed his license with Thomson Homes, Inc. However, in either event, from the date that Petitioner formally placed his license with Thomson Homes, Inc., he never had a substantive conversation with Ms. Thomson about any construction activities of Thomson Homes, Inc. Not hearing from Ms. Thomson, Petitioner eventually called her to learn when he would start work. At first, Ms. Thomson took Petitioner's calls and kept explaining that the financing paperwork had been delayed. She promised to call Petitioner when construction was ready to proceed. However, Ms. Thomson never contacted Petitioner, and she later stopped taking or returning Petitioner's calls. In early August 1999, Petitioner called Thomson Homes, Inc., and learned that its telephone had been disconnected. He visited the office of Thomson Homes, Inc., but found it closed and the premises vacated. In fact, Thomson Homes, Inc., discontinued business on or about August 1, 1999. Between the date that Petitioner had qualified Thomson Homes and the point at which Thomson Homes ceased doing business, Thomson Homes, Inc., had entered into construction contracts, taken deposits and draws on construction loans, and performed residential construction--all unknown to Petitioner. Also unknown to Petitioner was the fact that Thomson Homes, Inc., had failed to perform its obligations under many, if not all, of its construction contracts during that period. The record is unclear when Petitioner withdrew his license from Thomson Homes, Inc. Petitioner sent Respondent a letter on August 30, 1999, advising of the withdrawal of his license from Thomson Homes, Inc. Later advised that he needed to file another form to effect the withdrawal, Petitioner did so in March 2000. The difference is not important in these cases. At no time did Petitioner receive any money from Thomson Homes, Inc., or any of the claimants who contracted with Thomson Homes, Inc. At no time did Petitioner enter into any contracts with any of the claimants. Only after Thomson Homes, Inc., had taken the claimants' money and abandoned work or failed to commence work did Petitioner learn that Thomson Homes, Inc., had done construction business under his license. DOAH Case No. 03-3540 involves the claim of Sandra Harvey. Ms. Harvey entered into a construction agreement with Thomson Homes, Inc., on September 9, 1998. Pursuant to the agreement, Ms. Harvey agreed to pay Thomson Homes, Inc., $25,500 for a lot and $115,260 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 120 days from the date of slab pour. After pouring the slab, constructing the shell, and completing the rough plumbing, air conditioning, and electrical, Thomson Homes, Inc., stopped work on Ms. Harvey's home in early 1999. Ms. Harvey learned of the problem when Mr. Thomson called her in early 1999 and said that he could not finish the home because Ms. Thomson had taken over the business. This call probably took place no later than late March 1999, when Mr. Thomas withdrew as the qualifier for Thomson Homes, Inc. The record does not reveal the extent of payments from Ms. Harvey or her lender or the extent of completed work at the time that Thomson Homes, Inc., abandoned the job. Although the complaint is not part of this record, Ms. Harvey commenced a legal action against Thomson Homes, Inc., but not Petitioner. She obtained a default final summary judgment against Thomson Homes, Inc., on March 30, 2001, for a total sum of $46,267.32, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: Subsequent to entering into the above referenced contract, Defendant breached its contract by accepting Plaintiff's deposits and construction loan disbursements and thereafter abandoning the project and failing to pay subcontractors and/or materialmen for their labor, services and material provided. As a result of Defendant abandoning the project, Plaintiff was compelled to retain a new contractor to complete her home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, the misapplication of construction funds and financial mismanagement Plaintiff has been forced to borrow additional funds from the construction lender. On May 3, 2001, Ms. Harvey filed a claim with the Construction Industries Recovery Fund (Recovery Fund). In response to a question asking if she had made a diligent effort to collect payment from the contractor, Ms. Harvey answered "yes," explaining she had "filed lawsuit." Ms. Harvey probably filed her claim within two years of when Thomson Homes, Inc., abandoned her job. By the end of March 1999, Mr. Thomson informed Ms. Harvey that his wife had fired him, so he could not work on her home anymore. A change in qualifier does not mean that Thomson Homes, Inc., would necessarily abandon the job, but, as noted in the Conclusions of Law, abandonment presumptively arises upon the expiration of 90 days without work. No work took place on Ms. Harvey's home after Mr. Thomson withdrew as qualifier, so presumptive abandonment took place by the end of June 1999--after May 3, 1999, which is two years prior to the date on which Ms. Harvey filed her claim. By letter dated June 5, 2001, from James Brogan of WEI Consulting Group to Ms. Harvey, Mr. Brogan states that he had investigated the assets of Thomson Homes, Inc. Mr. Brogan found no bankruptcy filing by Thomson Homes, Inc., in Bankruptcy Court in the Southern District of Florida. Thomson Homes, Inc., was a party to 282 legal actions and owed tangible personal property taxes on furniture in a model home, but the furniture was no longer available. On February 28, 2003, Respondent issued an Order approving Ms. Harvey's claim of $25,000 against the Recovery Fund and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that Ms. Harvey is the Petitioner, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On March 17, 2003, Petitioner filed a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on Ms. Harvey and Respondent, contests the payment to Ms. Harvey and the automatic suspension of Petitioner's license. The petition contests the payment of Ms. Harvey's claim because she had made insufficient efforts to satisfy the judgment; she had failed to submit all required exhibits with her claim; her judgment is against Thomson Homes, Inc., and not Petitioner; her judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes; and Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes. Additionally, the petition contests the automatic suspension because the payment to Ms. Harvey is not authorized, her claim is incomplete, and her judgment is not against Petitioner. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3541 involves the claim of John and Kathleen Whitesides. The Whitesides, who lived at the time in Juno Beach, Florida, entered into a construction contract with Thomson Homes, Inc., on February 7, 1999. Pursuant to the agreement, the Whitesides agreed to pay Thomson Homes, Inc., $154,094 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 120 days from the date of slab pour. After the Whitesides paid Thomson Homes, Inc., $5000 and secured a construction loan, Thomson Homes, Inc., never commenced construction. In a complaint filed April 3, 2000, the Whitesides commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment]" of the job "prior to any construction," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction. The Whitesides obtained a default final judgment against Thomson Homes, Inc., on December 21, 2000, for a total sum of $20,146.67, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: "Defendant is in breach of the Contract dated February 7, 1999, and has received unjust enrichment from Defendant's failure to fulfill the terms of the Contract to build a home for Plaintiffs." On August 9, 2001, David Tassell, the Whitesides' attorney in the circuit court action against Thomson Homes, Inc., stated, in an acknowledged statement, that he had performed "numerous" real property searches in Palm Beach and Martin counties' public records and determined that Thomas Homes, Inc., "owns no real property in Martin County." The omission of Palm Beach County in the statement is unexplained. Mr. Tassell's statement adds that he has retained a private investigator, who confirmed that Thomson Homes, Inc., owns no boats, planes, or automobiles. On August 10, 2001, the Whitesides filed a claim with the Recovery Fund. In response to a question asking if they had made a diligent effort to collect payment from the contractor, the Whitesides answered "yes," but did not supply an explanation in the following blank. The completed questionnaire accompanying the claim states that the Whitesides discovered the violation in September 1999 and that it occurred in July to August 1999. On September 17, 2002, Respondent issued an Order approving the Whitesides' claim of $18,526.67 against the Recovery Fund and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that the Whitesides are the Petitioners, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. The Whitesides probably filed their claim within two years of when they reasonably should have discovered that Thomson Homes, Inc., had wrongfully failed to commence construction, as is required for reasons set forth in the Conclusions of Law. As noted in the Conclusions of Law, presumptive abandonment arose when Thomson Homes, Inc., after entering the contract, performed no work for 90 days. Six months elapsed from the signing of the contract to the date that is two years prior to the filing of the claim. Although the record is not well-developed on the point, it is more likely than not that due diligence did not require that the Whitesides discover the abandonment within the first 90 days after it had presumptively arisen. The Whitesides' judgment is probably based on a violation of Section 489.129(1)(g), (j), or (k), Florida Statutes, as is required for reasons set forth in the Conclusions of Law. Although the record is not well-developed on this point either, it is more likely than not that the judgment is based on Thomson Homes' abandonment after entering into the contract. The judgment does not state this basis explicitly, but the complaint, on which the judgment is based, alleges abandonment. On December 23, 2002, Petitioner filed a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on Respondent and the Whitesides' attorney in the circuit court action against Thomson Homes, Inc., contests the payment to the Whitesides and the automatic suspension of Petitioner's license. The petition contests the payment of the Whitesides' claim because they did not file certified copies of the final judgment and levy and execution documents and their judgment did not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes. Additionally, the petition contests the automatic suspension because Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes; Petitioner received no notice of the hearing that resulted in the Order to pay the Whitesides and suspend Petitioner's license; the Whitesides' claim is incomplete; and the Whitesides' judgment is not against Petitioner. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3542 involves the claim of Richard and Kathleen Beltz. The Beltzes entered into a construction contract with Thomson Homes, Inc., on July 13, 1999. Pursuant to the agreement, the Beltzes agreed to pay Thomson Homes, Inc., $35,500 for a lot and $140,500 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 120 days from the date of slab pour. After the Beltzes paid Thomson Homes, Inc., $17,283.70, Thomson Homes, Inc., never appeared at the closing, which had been scheduled for August 10, 1999. Nor did Thomson Homes, Inc., ever commence construction. The record does not disclose the extent, if any, to which Thomson Homes, Inc., completed construction. The Beltzes' discovery of Thomson Homes' failure to commence construction was hampered by the fact that they resided in California at the time. However, the Beltzes had obviously discovered the wrongful acts and omissions of Thomson Homes, Inc., by September 29, 1999, when they sent a letter to Petitioner demanding that he return the money that they had paid Thomson Homes, Inc. On October 19, 1999, the Beltzes signed a claim under the Recovery Fund, but the record contains no indication when the claim was filed. The completed questionnaire attached to the claim does not ask if the claimants had made a diligent effort to collect payment from the contractor. For reasons set forth in the Conclusions of Law, a claim must follow a judgment, so, the Beltzes could not file a valid claim until they had obtained a judgment. Two years from September 29, 1999, at which point the Beltzes obviously knew of a violation, requires that they file the claim, on an already- secured judgment, prior to September 29, 2001. In a complaint filed February 4, 2002, the Beltzes commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment]" of the job "prior to any construction" and "fail[ure] and refus[al] to pay subcontractors and/or materialmen which resulted in Claims of Liens against Plaintiffs [sic] residence, which Defendant has failed and refused to satisfy," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction and pay for goods and services provided by subcontractors and materialmen. The Beltzes obtained a default final summary judgment against Thomson Homes, Inc., on May 22, 2002, for a total sum of $23,280.20, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: Subsequent to entering into the above referenced contract, Defendant performed some work on the project. However, Defendant breached its contract by accepting deposits and construction loan disbursements and thereafter abandoning the project and failing to pay subcontractors and materialmen for their labor, services and material provided. As a result of Defendant failing to pay Lienors who provided labor, service and materials to Plaintiffs [sic] real property, Construction Liens were recorded against same, which Plaintiffs had to satisfy. As a result of Defendant abandoning the project, Plaintiffs were compelled to retain a new contractor to complete their home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, failing to pay Lienors, the misapplication of construction funds and financial mismanagement, Plaintiffs were forced to borrow additional funds from their construction lender. By unacknowledged statement dated August 23, 2002, Ms. Beltz declared that someone at the Florida Department of State advised her that Thomson Homes, Inc., was administratively dissolved on September 24, 1999. She also declared that she had found on the internet two pieces of real property owned by Thomson Homes, Inc., but they had been transferred within the past year. Ms. Beltz stated that she searched the database of the "Department of Motor Vehicles in Palm Beach County" in May 2000 and found no vehicles or boats registered to Thomson Homes, Inc. Lastly, she reported that she contacted the "Federal Aviation Association" at an unspecified time and found no "airplanes" registered to Thomson Homes, Inc. On November 26, 2002, Respondent issued an Order approving the Beltzes' claim of $17,222.78 against the Recovery Fund and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that the Beltzes are the Petitioners, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On December 27, 2002, Petitioner filed a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on the Beltzes and Respondent, contests the payment to the Beltzes and the automatic suspension of Petitioner's license. The petition contests the payment of the Beltzes' claim because they did not submit all of the necessary exhibits with their claim; their judgment is against Thomson Homes, Inc., and not Petitioner; and their judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes. Additionally, the petition contests the automatic suspension because Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes; the Beltzes' claim is incomplete; and the Beltzes' judgment is not against Petitioner. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3543 involves the claim of Keith and Karen Deyo. The Deyos entered into a construction contract with Thomson Homes, Inc., on October 31, 1998. Pursuant to the agreement, the Deyos agreed to pay Thomson Homes, Inc., $25,500 for a lot and $123,400 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 120 days from the date of slab pour. Although the Deyos clearly suffered damages from the acts and omissions of Thomson Homes, Inc., the record does not disclose how much they paid the company, how much they had to pay unpaid suppliers and laborers, and how much construction the company completed before abandoning the job. Thomson Homes, Inc., began construction on the Deyos' home about 30-45 days after the parties signed the contract, but all work stopped in July 1999. In an undated complaint, the Deyos commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment] of the project prior to completion" and "fail[ure] and refus[al] to pay subcontractors and/or materialmen which resulted in Claims of Liens against Plaintiffs [sic] residence, which Defendant has failed and refused to satisfy," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction and pay for goods and services provided by subcontractors and materialmen. The Deyos obtained a final summary judgment against Thomson Homes, Inc., on March 15, 2000, for a total sum of $55,458.64, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: Subsequent to entering into the above referenced contract, Defendant partially performed work under the Contract. However, it breached its contract by accepting deposits and construction loan disbursements and thereafter abandoning the project and failing to pay subcontractors and materialmen for their labor, services and material provided. As a result of Defendant failing to pay lienors who provided labor, services and materials to Plaintiffs [sic] residence, construction liens were recorded against same, which Plaintiffs had to satisfy. As a result of Defendant abandoning the project, Plaintiffs were compelled to retain a new contractor to complete their home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, failing to pay lienor's [sic], the misapplication of construction funds and financial mismanagement Plaintiffs have been forced to borrow additional funds from their construction lender. On April 27, 2000, the Deyos signed a claim under the Recovery Fund, but the record contains no indication when the claim was filed. A cover letter dated May 8, 2000, suggests that the Deyos mailed their claim a couple of weeks after signing it, so it was probably filed in mid-May 2000, although their questionnaire bears a revision date of November 2001, which would be beyond two years after the violation. In the questionnaire, the Deyos did not respond to the question asking if they had made a diligent effort to collect payment from the contractor. By an undated and unacknowledged statement, Mr. Deyo declared that someone at the Florida Department of State advised him that Thomson Homes, Inc., was administratively dissolved on September 24, 1999. He also declared that he had found on the internet two pieces of real property owned by Thomson Homes, Inc., but they had been transferred within the past year. Mr. Deyo stated that he searched the database of the "department of motor vehicles in Palm Beach County" in on April 14, 2000, and found no motor vehicles or boats registered to Thomson Homes, Inc. Lastly, he reported that he contacted the "Federal Aviation Association" on April 21, 2000, and found no "airplanes" registered to Thomson Homes, Inc. On January 22, 2003, Respondent issued an Order acknowledging the Deyos' claim of $55,458.64, approving the payment of the statutory limit of $25,000 against the Recovery Fund, and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that Mr. Deyo is the Petitioner, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On February 3, 2003, Petitioner filed a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on Respondent and the Deyos' attorney who represented them in the action against Thomson Homes, Inc., contests the payment to the Deyos and the automatic suspension of Petitioner's license. The petition contests the payment of the Deyos' claim and suspension of Petitioner's license because Petitioner did not receive notice of the hearing at which Respondent entered the Order; the Deyos did not satisfy all requirements for payment from the Recovery Fund; their claim was not accompanied by certified copies of the levy and execution documents; their judgment is against Thomson Homes, Inc., and not Petitioner; their judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes; and Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3544 involves the claim of Sylvia Reinhardt. Ms. Reinhardt entered into a construction contract with Thomson Homes, Inc., on October 14, 1998. Pursuant to the agreement, Ms. Reinhardt agreed to pay Thomson Homes, Inc., $45,000 for a lot and $147,150 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 120 days from the date of slab pour. After Ms. Reinhardt paid Thomson Homes, Inc., $144,769, directly and indirectly, by way of her construction lender, the house was little more than half complete when Thomson Homes, Inc., abandoned the job. Thomson Homes also failed to pay various suppliers that filed liens, so Ms. Reinhardt had to pay $8550.41 to RTS Roofing, $882 to Palm Beach Garage Door, and $3421.32 to Woodworks, Inc. In an undated complaint filed in 1999 (actual date illegible), Ms. Reinhardt commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment]" of the job "prior to completion" and "fail[ure] and refus[al] to pay subcontractors and/or materialmen which resulted in Claims of Liens against Plaintiff's residence, which Defendant has failed and refused to satisfy," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction and pay for goods and services provided by subcontractors and materialmen. Ms. Reinhardt obtained a final summary judgment against Thomson Homes, Inc., on March 28, 2000, for a total sum of $61,471.15, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: Subsequent to entering into the above referenced contract, Defendant performed work under the Contract. However, it breached its contract by accepting deposits and construction loan disbursements and thereafter abandoning the project and failing to pay subcontractors and materialmen for their labor, services and materials provided. As a result of Defendant failing to pay lienors who provided labor, services and materials for the construction of Plaintiff's residence, construction liens were recorded against same, which Plaintiff had to satisfy. As a result of Defendant abandoning the project, Plaintiff was compelled to retain a new contractor to complete their [sic] home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, failing to pay lienor's [sic], the misapplication of construction funds and financial mismanagement Plaintiff has been forced to borrow additional funds from her construction lender. On April 17, 2000, Ms. Reinhardt filed a claim with the Recovery Fund. In response to a question asking if she had made a diligent effort to collect payment from the contractor, Ms. Reinhardt answered "yes" and explained: "Telephone calls were unanswered. Certified mail requesting response were [sic] never answered. Our attorney made written and personal contact with the owner and there was no intention to pay." The claim states that the violation took place in July 1999. By acknowledged statement dated July 21, 2000, Ms. Reinhardt declared that she had completed a "reasonable search and inquiry" and had not found any property or assets against which to satisfy her judgment. Ms. Reinhardt stated that someone at the Florida Department of State advised her that Thomson Homes, Inc., was administratively dissolved on September 24, 1999. She also declared that she had found one parcel of property owned by Thomson Homes, Inc., and valued at $115,387, but this had been sold to "Joan Thomson" on February 1, 2000. Ms. Reinhardt stated that she had found tangible personal property worth $5000. She added that she had not found any motor vehicles registered with the Department of Highway Safety and Motor Vehicles, nor had she found anything registered with the "FAA." On November 26, 2002, Respondent issued an Order acknowledging Ms. Reinhardt's claim of $58,661.44, approving the payment of the statutory limit of $25,000 against the Recovery Fund, and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that Ms. Reinhardt is the Petitioner, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On December 24, 2002, Petitioner served a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on Ms. Reinhardt and Respondent, contests the payment to Ms. Reinhardt and the automatic suspension of Petitioner's license. The petition contests the payment of Ms. Reinhardt's claim and suspension of Petitioner's license because Ms. Reinhardt did not submit certified copies of the levy and execution documents; her judgment is against Thomson Homes, Inc., and not Petitioner; her judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes; and Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3545 involves the claim of Louis and Ann Mahoney. The Mahoneys entered into a construction contract with Thomson Homes, Inc., on June 28, 1999, for the construction of a home in Martin County. Pursuant to the agreement, the Mahoneys agreed to pay Thomson Homes, Inc., $32,000 for a lot and $149,000 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 150 days from the date of slab pour. After the Mahoneys paid Thomson Homes, Inc., $14,500, directly and indirectly, by way of their construction lender, they suffered damages due to the acts and omissions of Thomson Homes, Inc., although, again, the record does not describe specifically how Thomson Homes caused them damage. In an undated complaint that bears no filing date, the Mahoneys commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment]" of the job "prior to completion" and "fail[ure] and refus[al] to pay subcontractors and/or materialmen which resulted in Claims of Liens against Plaintiffs [sic] residence, which Defendant has failed and refused to satisfy," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction and pay for goods and services provided by subcontractors and materialmen. The Mahoneys obtained a final summary judgment against Thomson Homes, Inc., on April 13, 2000, for a total sum of $43,084.49, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: Subsequent to entering into the above referenced contract, Defendant breached its contract by accepting Plaintiffs' deposits and construction loan disbursements and thereafter abandoning the project and failing to pay subcontractors and/or materialmen for their labor, and/or services provided. As a result of Defendant failing to pay lienor's [sic] who provided labor, services and materials for the construction of Plaintiffs [sic] residence, a construction lien was recorded against Plaintiffs' property, which Plaintiffs will have to satisfy. As a result of Defendant abandoning the project, Plaintiffs were compelled to retain a new contractor to complete their home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, failing to pay lienor's [sic], the misapplication of construction funds and financial mismanagement Plaintiffs have been forced to borrow additional funds from their construction lender. On April 30, 2000, the Mahoneys signed a claim under the Recovery Fund. Although the claim form bears no filing date, the completed questionnaire attached to the claim was filed on May 3, 2000, so that is the likely filing date of the claim. In response to a question asking if they had made a diligent effort to collect payment from the contractor, the Mahoneys answered "yes" and explained: "This is explained in General Allegations, enclosed with this paperwork." Evidently, the reference is to a copy of the circuit court complaint. By acknowledged statement dated April 8, 2002, Mr. Mahoney declared that he had completed a "reasonable search and inquiry" and had not found any property or assets against which to satisfy his judgment. Mr. Mahoney stated that someone at the Florida Department of State advised him that Thomson Homes, Inc., was administratively dissolved on September 24, 1999. He also declared that an internet search had disclosed no property owned by Thomson Homes, Inc. Mr. Mahoney stated that the "department of motor vehicles in Palm Beach County" found no motor vehicles or boats registered to Thomson Homes, Inc., and that the "FAA" had found nothing registered to Thomson Homes, Inc. On February 28, 2003, Respondent issued an Order acknowledging the Mahoneys' claim of $38,185, approving the payment of the statutory limit of $25,000 against the Recovery Fund, and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that the Mr. Mahoney is the Petitioner, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On March 17, 2003, Petitioner served a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on the Mahoneys and Respondent, contests the payment to the Mahoneys and the automatic suspension of Petitioner's license. The petition contests the payment of the Mahoneys' claim and suspension of Petitioner's license because they did not submit all of the required exhibits; their judgment is against Thomson Homes, Inc., and not Petitioner; their judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes; and Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3546 involves the claim of Dennis and Carolyn DeStefanis. The DeStefanises entered into a construction contract with Thomson Homes, Inc., on April 7, 1999. Pursuant to the agreement, the DeStefanises agreed to pay Thomson Homes, Inc., $137,455 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 150 days from the date of slab pour. After the DeStefanises paid Thomson Homes, Inc., $15,765, directly and indirectly, by way of their construction lender, Thomson Homes, Inc. never did any work, except to contract with a surveyor, who, unpaid, filed a claim of lien against the DeStefanises's lot. In an undated complaint bearing no filing date, the DeStefanises commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment]" of the job "prior to completion" and "fail[ure] and refus[al] to pay subcontractors and/or materialmen which resulted in Claims of Liens against Plaintiffs [sic] residence, which Defendant has failed and refused to satisfy," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction and pay for goods and services provided by subcontractors and materialmen. The DeStefanises obtained a final summary judgment against Thomson Homes, Inc., on March 15, 2000, for a total sum of $36,701.87, including attorneys' fees and costs. The judgment states, in part: Subsequent to entering . . . into the above referenced contract, Defendant, [sic] breached its contract by accepting Plaintiffs [sic] deposits and construction loan disbursements and thereafter abandoning the project. [sic] As a result of Defendant abandoning the project, Plaintiffs were compelled to retain a new contractor to complete their home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, the misapplication of construction funds and financial mismanagement Plaintiffs have been forced to borrow additional funds from their construction lender. On April 19, 2000, the DeStefanises filed a claim with the Recovery Fund. In response to a question asking if they had made a diligent effort to collect payment from the contractor, the DeStefanises answered "yes" and explained: "Went to DBPR Investigative Services, hired Attorney Barry W. Taylor [attorney in circuit court action], got Final Summary Judgment against Thomson Homes, Inc." On March 20, 2003, Respondent issued an Order acknowledging the DeStefanises' claim of $34,965.52, approving the payment of $15,765 against the Recovery Fund, and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that the DeStefanises are the Petitioners, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On April 7, 2003, Petitioner filed a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on the DeStefanises and Respondent, contests the payment to the DeStefanises and the automatic suspension of Petitioner's license. The petition contests the payment of the DeStefanises' claim and suspension of Petitioner's license because they did not submit all of the required exhibits; their judgment is against Thomson Homes, Inc., and not Petitioner; their judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes; and Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes. The petition contests the suspension of Petitioner's license on the additional ground that he was not the qualifier for Thomson Homes, Inc., when it and the DeStefanises entered into the construction contract. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3547 involves the claim of James and Donna Barr. The Barrs entered into a construction contract with Thomson Homes, Inc., on September 12, 1998. Pursuant to the agreement, the Barrs agreed to pay Thomson Homes, Inc., $30,000 for a lot and $140,900 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 120 days from the date of slab pour. The Barrs paid Thomson Homes, Inc., $8500 in the form of a down payment. They or their construction lender paid Thomson Homes, Inc., considerably more money and suffered the imposition of claims of lien by unpaid subcontractors and suppliers, but, after negotiating with the bank, emerged from the transaction having lost only the $8500 down payment. Thomson Homes, Inc., obtained permits in April 1999 and started construction in May 1999. Before abandoning the job, Thomson Homes, Inc., worked on the home in May, June, and July of 1999. The Barrs and their lender did not make additional payments after the Barrs found the Thomson Homes, Inc., office empty on August 1, 1999. In a complaint filed October 6, 1999, the Barrs commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment]" of the job "prior to completion" and "fail[ure] and refus[al] to pay subcontractors and/or materialmen which resulted in Claims of Liens against Plaintiffs [sic] residence, which Defendant has failed and refused to satisfy," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction and pay for goods and services provided by subcontractors and materialmen. The Barrs obtained a final summary judgment against Thomson Homes, Inc., on May 8, 2000, for a total sum of $45,435.62, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: Subsequent to entering into the above referenced contract, partially performed work under the Contract. However, Defendant breached the contract by accepting Plaintiffs [sic] deposits and construction loan disbursements and thereafter abandoning the project and failing to pay subcontractors and/or materialmen for their labor services and materials provided. As a result of Defendant failing to pay lienors who provided labor, services and materials for the construction of Plaintiffs [sic] residence, construction liens were recorded against same, which Plaintiffs will have to satisfy. As a result of Defendant abandoning the project, Plaintiffs will be compelled to retain a new contractor to complete their home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, failing to pay lienors, the misapplication of construction funds and financial mismanagement Plaintiffs will be forced to borrow additional funds from their construction lender. On June 2, 2000, the Barrs filed a claim under the Recovery Fund. In response to a question asking if they had made a diligent effort to collect payment from the contractor, the Barrs answered "yes" and explained: "I have looked into the assets of Thomson Homes Inc. and they do not have any. My affidavit is attached." The completed questionnaire states that the Barrs discovered the violation on August 11, 1999. They therefore failed to file their claim within two years of the discovery of the violation. By acknowledged statement dated May 23, 2000, Ms. Barr declared that she had completed a "reasonable search and inquiry" and had not found any property or assets against which to satisfy her judgment. Ms. Barr stated that someone at the Florida Department of State advised her that Thomson Homes, Inc., was administratively dissolved on September 24, 1999. She also declared she had found no property owned by Thomson Homes, Inc., in Palm Beach County. Ms. Barr stated that the Department of Highway Safety and Motor Vehicles found no motor vehicles or boats registered to Thomson Homes, Inc., and that the internet site of the "FAA" had revealed nothing registered to Thomson Homes, Inc. On November 26, 2002, Respondent issued an Order approving the payment of the Barrs' claim of $8500 against the Recovery Fund and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that the Barrs are the Petitioners, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On December 27, 2002, Petitioner served a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on the Barrs and Respondent, contests the payment to the Barrs and the automatic suspension of Petitioner's license. The petition contests the payment of the Barrs' claim and suspension of Petitioner's license because they did not submit a certified copy of the levy and execution documents; their judgment is against Thomson Homes, Inc., and not Petitioner; their judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes; and Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. DOAH Case No. 03-3633 involves the Joanne Myers. Ms. Myers entered into a construction contract with Thomson Homes, Inc., on February 7, 1999. Pursuant to the agreement, Ms. Myers agreed to pay Thomson Homes, Inc., $29,500 for a lot and $125,400 for a home, which Thomson Homes, Inc., agreed to construct to "substantial completion" within 120 days from the date of slab pour. Ms. Myers directly or indirectly paid Thomson Homes, Inc., $12,840. According to Ms. Myers' claim, Thomson Homes, Inc., never commenced construction before going out of business in August 1999. In an undated complaint bearing no filing date, Ms. Myers commenced a legal action against Thomson Homes, Inc., but not Petitioner. The two-count complaint alleges a breach of contract, based on Thomson Homes' alleged "abandon[ment]" of the job "prior to completion" and "fail[ure] and refus[al] to pay subcontractors and/or materialmen which resulted in Claims of Liens against Plaintiff's residence, which Defendant has failed and refused to satisfy," and unjust enrichment, based on Thomson Homes' alleged receipt of funds and failure to complete construction and pay for goods and services provided by subcontractors and materialmen. Ms. Myers obtained a final summary judgment against Thomson Homes, Inc., on May 31, 2000, for a total sum of $28,307.77, including attorneys' fees, costs, and prejudgment interest. The judgment states, in part: Subsequent to entering . . . into the above referenced contract, Defendant breached the contract by accepting Plaintiff's deposits and construction loan disbursements and thereafter abandoning the project and failing to pay subcontractors and/or materialmen for their labor services and materials provided. As a result of Defendant failing to pay lienor's [sic] who provided labor, services and/or materials for the construction of Plaintiff's residence, construction liens were recorded against same, which Plaintiff will have to satisfy. As a result of Defendant abandoning the project, Plaintiff will be compelled to retain a new contractor to complete her home at an additional cost over and above the original contract amount. As a direct result of Defendant abandoning the project, failing to pay lienor's [sic], the misapplication of construction funds and financial mismanagement Plaintiff will be forced to borrow additional funds from her construction lender. On September 18, 2000, Ms. Myers filed a claim with the Recovery Fund. In response to a question asking if she had made a diligent effort to collect payment from the contractor, Ms. Myers answered "yes" and explained: "Contractor closed corporate office--would not answer telephone calls." By letter dated November 30, 2000, from James Brogan of WEI Consulting Group to Ms. Myers, Mr. Brogan states that he had investigated the assets of Thomson Homes, Inc. Mr. Brogan found no bankruptcy filing by Thomson Homes, Inc., in the Southern District of Florida. Thomson Homes, Inc., was a party to 282 legal actions and owed tangible personal property taxes on furniture in a model home. On February 28, 2003, Respondent issued an Order approving the payment of Ms. Myers' claim of $14,080.66 against the Recovery Fund and automatically suspending Petitioner's license until he reimburses the Recovery Fund for the full amount of the paid claim. The Order, copies of which were served on all parties, states that Ms. Myers is the Petitioner, the Recovery Fund is a Respondent, and "Larry Shimkus, d/b/a Thomson Homes, Inc.," is a Respondent. The Order advises that "you" may seek a formal hearing, pursuant to Section 120.57(1), Florida Statutes, if material facts are in dispute. On March 17, 2003, Petitioner filed a Petition for Section 120.57 Formal Administrative Hearing. The petition, which was served on Ms. Myers and Respondent, contests the payment to Ms. Myers and the automatic suspension of Petitioner's license. The petition contests the payment of Ms. Myers' claim and suspension of Petitioner's license because she did not submit evidence of a diligent search for assets; she did not submit all of the required exhibits; her judgment is against Thomson Homes, Inc., and not Petitioner; her judgment does not find that Petitioner violated Section 489.129(1)(g), (j), or (k), Florida Statutes; and Ms. Thomson deceived Petitioner in violation of Section 489.132, Florida Statutes. Lastly, the petition seeks attorneys' fees under Section 57.111, Florida Statutes. On January 4, 2004, Ms. Myers died. However, the probate court of Lancaster County, Pennsylvania, issued letters testamentary on her estate to James W. Myers III, in whose name Ms. Myers' claim is now being prosecuted. At the hearing, Petitioner contended that most, if not all, of the claims failed because the claimants had not exercised reasonable diligence in searching for assets, although Petitioner has dropped this contention in its proposed recommended order. In his petitions for hearing, Petitioner raised this contention only as to Ms. Myers. Ms. Myers, as well as the remainder of the claimants, made or caused to be made a reasonable search and inquiry for the assets of Thomson Homes, Inc. It is obvious that Thomson Homes, Inc., had no assets by the first letter from Mr. Brogan, dated November 30, 2000, nor did it have assets when Mr. Brogan issued his later letter on June 5, 2001, or when the attorney issued his affidavit on August 9, 2001. What is reasonable, in terms of a search, is dictated here by the fact that Thomson Homes, Inc., had no discoverable assets against which it could be made to answer for the considerable fraud that it perpetrated against these nine claimants. Respondent provided all of the parties, including Petitioner, with notice of its hearings at which it entered Recovery Fund orders. The petitions contend that Petitioner received no such notice in the Whitesides and Deyos cases. Although not litigated at the hearing, the presumption of notice, pursuant to the recitations set forth in each of Respondent's orders, results in a finding that Petitioner received timely notice in all cases.
Recommendation It is RECOMMENDED that Respondent enter a final order dismissing the claims against the Recovery Fund of the Beltzes and Barrs; paying the claims against the Recovery Fund of the remaining claimants, pursuant to the provisions of the orders of Respondent already issued in these cases and pursuant to the provisions of Section 489.143(1)-(6), Florida Statutes; and dismissing Respondent's request for the automatic suspension of Petitioner's license, pursuant to Section 489.143(7), Florida Statutes, without prejudice to any separate disciplinary proceedings that Respondent has commenced or may commence against Petitioner or others for the acts and omissions involved in these nine cases. DONE AND ENTERED this 17th day of February, 2004, in Tallahassee, Leon County, Florida. S ROBERT E. MEALE 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 February, 2004. COPIES FURNISHED: Bruce G. Kaleita Law Office of Bruce G. Kaleita, P.A. 1615 Forum Place, Suite 500 West Palm Beach, Florida 33401 Adrienne C. Rodgers Assistant General Counsel Department of Business and Professional Regulation 1940 North Monroe Street, Suite 60 Tallahassee, Florida 32399-1023 Tim Vaccaro, Director Construction Industry Licensing Board Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Nancy Campiglia, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-2202
Findings Of Fact Abraham Scott, Jr., is a registered general contractor with the FCILB and holds general contractor's license no. RG0008305. Pursuant to an agreement entered during April, 1975, Respondent and Mrs. Ruth Jenkins of Lake Butler entered into a contract for construction of a home at a cost of $37,000. To finance the project, Mrs. Jenkins secured a loan from Guaranty Federal Savings & Loan Association of Starke, Florida in the amount of $30,600 and she additionally paid Respondent approximately $5,913.57. Guaranty Federal Savings & Loan had disbursed approximately 90 percent of the construction loan to Respondent when Mrs. Jenkins received liens filed against her property in the amount of approximately $9,579.53. The lienors included Lake City Industries, North Florida Concrete, Mayo Electric, Roy Ward Wholesale Distributors, Sawyer Slade Gas Company and a local carpet distributor. At that juncture, Mrs. Jenkins complained to Respondent regarding the liens filed against her property and the fact that the house was not completed as per their agreement to no avail. Thereafter, Mrs. Jenkins contacted Mr. Harold K. Davis, Branch Manager of Guaranty Federal Savings & Loan Association, who terminated all further disbursements of the construction loan. At that point, approximately $28,436.50 had been disbursed to Respondent. Mr. Hermon Cherry, investigator with FCILB investigated the Jenkins' complaint and discussed the matter with Respondent. Mr. Cherry testified that Respondent advised him that he had used part of the money from the Jenkins' project to complete a job in Hamilton County and that when the proceeds from that job were received, those receipts would be used to satisfy liens placed against the Jenkins property. Petitioner's Exhibit #3, is a statement given to investigator Cherry on March 22, 1976, by Respondent. The statement is somewhat corroborative of Cherry's testimony that Respondent used portions of the construction loan monies received from the Jenkins project to complete another job. Respondent acknowledged that he was having financial problems in another county "in which I have money from this job tied in the amount of $2,500. As soon as I can collect this money from these jobs, I will clear this matter up". (See Petitioner's Exhibit #3). Respondent acknowledged that he had monies due him from a project he had completed in Jasper, Florida and that this job was completed prior to the commencement of the Jenkins project. However, he failed to state that all obligations due and owing on that job in Jasper had been satisfied or that all unpaid subcontractors, materialmen, etc., who furnished materials, supplies or labor, in connection with the Jasper project had been paid. Based on that statement and Respondent's acknowledgement that the liens had been placed on the Jenkins project based on his financial difficulties with another project in which he clearly stated in Petitioner's Exhibit #3 that money from the Jenkins project had been tied up on another project, I find that the two matters, when coupled together provides proof positive that the Respondent diverted funds received for completion or the Jenkins project to another project and as a result thereof, he was unable to fulfill the terms of his obligation and contract with Mrs. Jenkins, in violation of Chapter 468.112(2)(e). During the course of the hearing, Respondent introduced evidence indicating that a settlement agreement was being worked out to resolve the differences with Mrs. Jenkins property and to satisfy all lien claimants who had filed liens against Mrs. Jenkins' property. Mrs. Jenkins acknowledged the settlement agreement and indicated her willingness to accept the terms thereof as full satisfaction of Respondent's obligations to her pursuant to the construction of her home. (See Respondent's Exhibit #1.) Respondent testified further that he intends to fulfill all of the remaining deficiencies that may exist with respect to the Jenkins property and that he at all times intended to fulfill his obligations to her. For these reasons, I shall recommend that the Respondent's registered general contractor's license be suspended rather than revoked.
Recommendation Based on the foregoing findings of fact and conclusions of law, I recommend that the Respondent's registered general contractor's license be suspended for a period of 90 days in accord with the authority contained in Chapter 468.112(3)(a), F.S. DONE AND ENTERED this 21st day of February, 1977, in Tallahassee, Florida. COPIES FURNISHED: Barry Sinoff, Esquire 1010 Blackstone Building Jacksonville, Florida 32202 J. K. Linnan Executive Director Florida Construction Industry Licensing Board Post Office Box 8621 Jacksonville, Florida 32211 Mr. Abraham Scott, Jr. Route 1, Box 503 Lake City, Florida JAMES E. BRADWELL Hearing Officer Division of Administrative Hearings 530 Carlton Building Tallahassee, Florida 32304 (904) 488-9675
The Issue Whether Respondent's intended rejection of all responses to its solicitation of "qualifications" from entities interested in contracting with Respondent to perform construction management at risk services in connection with a project at Fort Lauderdale High School is illegal, arbitrary, and/or dishonest, as alleged by Petitioner.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: Respondent is a district school board responsible for the operation, control and supervision of all public schools (grades K through 12) in Broward County, Florida (including, among others, Fort Lauderdale High School) and for otherwise providing public instruction to school-aged children in the county. As authorized by Florida Administrative Code Rule 6A- 1.012, Respondent has "establish[ed] purchasing rules" (denominated as "policies"). Respondent's Policy 3320 contains Respondent's "Purchasing Policies." Part III of Respondent's Policy 3320 prescribes "Purchasing Policies" for Respondent's Facilities and Construction Management Division, and it provides, in pertinent part, as follows: All additions, modifications, and alterations to School Board properties shall conform with the State Requirement for Educational Facilities (SREF), Florida Building Code (FBC) and the laws of the State of Florida. School Board administrators shall obtain assistance in preparing bid specifications and applicable building permit(s) from the Facilities and Construction Management division for these items. Part VIII of Respondent's Policy 3320 addresses the subject of "protests arising from the competitive solicitation process" and incorporates the protest procedures found in Section 120.57(3), Florida Statutes. Respondent's Policy 7003 is entitled, "Pre- Qualification of Contractors and Selection of Architects, Engineers, Design Builders, Construction Managers, and Total Program Managers Pursuant to the Consultants Competitive Negotiation Act." It provides, in pertinent part, as follows: The School Board shall pre-qualify bidders for construction contracts, and, publicly announce, in a uniform and consistent manner, each occasion when construction and/or professional services are required to be purchased in compliance with governing statutes and regulations. The Superintendent shall establish procedures for the pre-qualification of contractors and selection of architects, engineers, design- builders, construction managers and total program managers consistent with this policy, applicable statutes and State Requirements for Educational Facilities (SREF). Rules The School Board authorizes the Superintendent to: Receive applications for Contractor Pre- Qualification on the attached application form in compliance with FS 1013.46 and SREF 4.1(8), as amended. . . . * * * 4. Designate an evaluation committee of eleven (11) voting members for the purpose of Pre-Qualification of contractors and selection of architects, engineers, design builders, construction managers and total program managers. * * * The committee shall make recommendations to the Superintendent regarding the pre- qualification of contractors. The Superintendent shall make recommendations to the Board: Along with a report from the committee containing findings of fact indicating the proposers' compliance with the procurement requirements and scoring criteria and the Board shall have the final approval of such recommendations. The Contractor Pre-Qualification Application Form "attached" to Policy 7003 contains the following description of the contractor pre-qualification process: The School Board ("Board") through the Superintendent or his/her designee, shall pre-qualify all "contractors" for construction contracts, and any other contracts that require a certificate issued pursuant to Chapter 489, Florida Statutes, including, but not limited to, all bidders, construction managers, design-builders, job- order contractors, term contractors, and all other types of contractors on an annual basis or for a specific project according to the rules set forth in the State Requirements for Educational Facilities (SREF) Section 4.1(8). Contractors shall be pre-qualified on the basis of the criteria set forth in SREF and included in the foregoing application form. In addition to the foregoing criteria the applicant shall provide the Dun and Bradstreet report indicated in the application. The evaluation committee shall be as set forth in Board Policy 7003. The applicant shall complete the form in its entirety and submit all required documents by the deadline set forth in the public announcement. Separate applications shall be submitted for each desired contracting category. The School Board of Broward County shall receive and either approve or reject each application for prequalification within sixty (60) days after receipt of application in its entirety and all required documents. Approval shall be based on the criteria and procedures set forth in SREF. The Board shall issue to all pre-qualified contractors a certificate valid for one (1) year from the date of approval or for the specific project(s). That certificate shall include the following: A statement indicating that the contractor may bid, propose, or otherwise be considered, on the specific project(s) or for this specific time period. A statement establishing the total dollar value of the work the contractor will be permitted to have under contract with the Board at any one time. The maximum value shall not exceed the contractor's bonding capacity or ten (10) times the net quick assets. A statement establishing the maximum dollar value of each individual project the contractor will be permitted to have under contract with the Board at any one time. The maximum value of each project may be up to twice the value of the largest similar project previously completed but shall not exceed the Contractor's bonding capacity or ten (10) times the net quick assets. A statement establishing the type of work the contractor will be permitted to provide. The expiration date of the certificate. It shall be the responsibility of the contractor to renew annually certificates not for a specific project. Financial statements or written verification of bonding capacity on file with the Board shall be updated annually. Failure to submit a new statement or verification of bonding capacity within thirty (30) days written notice by the Board shall automatically revoke a pre-qualification certificate. 1. Pre-qualified contractors may request a revision of their pre-qualification status at any time they believe the dollar volume of work under contract or the size or complexity of the projects should be increased if experience, staff size, staff qualifications, and other pertinent data justify the action. These procedures are in accordance with requirements set forth in Section 4.1 of the State Requirements for Educational Facilities. As the parties stipulated in Admitted Fact 6, "[o]n May 20, 2008, [Respondent] approved the Request for Qualifications No. 2008-030-FC (RFQ) entitled 'Construction Management at Risk Services for Districts 2, 3 and 4 Projects (Cooper City High School - Project No. 1931-99-02; Fort Lauderdale High School – Project No. 0951-27-01; Margate Elementary School – Project No. 1161-26-01; and Northeast High School – Project No. 1241-27-01),' and authorized the public announcement of the RFQ." "[In] [t]he summary explanation and background [section of] the Agenda Request Form [for this agenda item, it was] stated that the 'Facilities and Construction Management staff recommend[ed] the procurement of construction services utilizing Construction Management at Risk delivery method due to the complexity, scope and scale of the projects.'" This "delivery method" is to be distinguished from the "hard bid" or "design/bid/build" method of procurement, where a contractor is hired only after "the construction documents are completed." Under the "Construction Management at Risk delivery method," contrastingly, the construction manager typically assists in the development and "complet[ion]" of the "construction documents," offering advice and recommendations to maximize quality and cost efficiency. As a result, it is "not uncommon" for there to be post-solicitation changes in a project's scope and budget when this "delivery method" is employed. As the parties stipulated in Admitted Fact 7, "[a]t the time of [Respondent's] approval of the RFQ, the portion of the RF[Q] pertaining to [the FHS Project] had an advertised Proposed Construction Budget of $29,150,340 and a project scope which was described [in RFQ] as follows: 'Concurrent replacement in two phases to include: Phase I – Construct a 3- story Administration Classroom Building of 68,940 GSF to include Administration, 3 general classroom[s], 5 resource rooms, 4 Science Labs and related spaces, a 4-classroom ESE Suite, 1 Business Technology Lab, 1 Family and Consumer Science (ProStart) Lab, 1 Health Occupations Lab, 1 Pre-Law Public Service Education Lab, Custodial spaces, Textbook Storage and Student, Staff and Public Restrooms. Demolish Buildings 1, 2, 3, 4, 11, 12, 13 and 14.'" Phase II of the project was, at the time, described in the RFQ as follows: "Construct Parent drop off & pick up area and Staff/Visitor Parking; Construct Regional Athletic Facility; Renovate Building 8 into Science Labs; Demolish existing tennis courts & replace with 6 tennis courts; Demolish Swimming Pool; Construct basketball courts; Resurface Student Parking." These descriptions represented the "initial concept" of the FHS Project (the design of the project having been then only in the "conceptual stage" of development). Respondent wanted to have the benefit of the input and advice of a construction manager (working together with the architect selected for the project) in developing the project's design beyond the "conceptual stage." As the parties stipulated in Admitted Facts 12 through 19, "[b]etween the initial public release of the RFQ and the submission of proposed qualifications, [Respondent] issued seven (7) addenda revising the RFQ's terms and conditions," with "Addendum No. 4 chang[ing] the scope of the [FHS Project] component of the RFQ as follows": Delete the scope in Phase I to demolish Building #4. Delete the scope in Phase II to construct basketball courts and to resurface student parking. Revise the words "replace with 6 tennis courts" to be the words "construct five (5) tennis courts." Clarify phasing: In Phase I, demolish the existing track and athletic field and relocate existing baseball field. Clarify scope: In Phase II, for the staff parking construct a 3-story parking structure including required access road work. Clarify scope: Phase II includes renovation of existing courtyard to provide ADA access to existing gymnasium and auditorium. (Emphasis, by bolding, supplied in original). Addendum No. 6 "[r]evised the [RFQ's] Submittal Due Date to read 'No later than 2:00 p.m. on September 3, 2008.'" As the parties stipulated in Admitted Fact 20,"[a]fter [the] issuance of Addendum No. 7 to the RFQ, the scope of the [FHS Project] component of the RFQ was described as follows [with strike-throughs and underlining indicating, respectively, post-issuance deletions and additions]: Concurrent replacement in two phases to include: Phase I – Construct a 3-story Administration Classroom Building of 68,940 GSF to include Administration, 3 general classroom[s], 5 resource rooms, 4 Science Labs and related spaces, a 4-classroom ESE Suite, 1 Business Technology Lab, 1 Family and Consumer Science (ProStart) Lab, 1 Health Occupations Lab, [1 Pre-Law Public Service Education Lab], Custodial spaces, Textbook Storage and Student, Staff and Public Restrooms. Demolish the existing track and athletic field and relocate existing baseball field. Demolish Buildings 1, 2, 3, 4, 11, 12, 13 and 14. Phase II – Construct Parent drop off & pick up area and a 3-story parking structure including required road access work for Staff Parking and /Visitor Parking[.] Construct Regional Athletic Facility[.] Renovate building 8 into Science Labs[.] Demolish existing tennis courts & replace with 6 tennis courts construct five (5) tennis courts. Demolish Swimming Pool. Renovate existing courtyard to provide ADA access to existing gymnasium and auditorium. Construct basketball courts. Resurface Student Parking." As the parties stipulated in Admitted Facts 10 and 11, on August 26, 2008, the date that Respondent issued its final addendum to the RFQ (Addendum No. 7), it also issued a Revised Public Announcement publicizing the issuance of the RFQ (as revised by the seven addenda). The Revised Public Announcement read, in pertinent part, as follows: In order to supplement the expertise of the Facilities and Construction Management Department, the Superintendent of Schools, pursuant to Florida Statutes, announces that The School Board of Broward County, Florida, is in need of Construction Management Services, related to new construction and renovations of educational facilities. Pursuant to this request for qualifications, The Board will consider contracts with one of more proposers to provide these services. Services under this contract include, but are not limited to the following items and shall be in accordance with SREF [State Requirements for Educational Facilities] 1999 Chapter 4: Bid and award activities including managing bidder listing, addendum, bidding, proposals, schedule of values, contracts, guaranteed maximum price, value engineering, and bonds. Construction activities including managing meetings, contract administration, monitoring procedures, contract records, inspections, non-conformances, owner- supplied equipment, testing, project accounting, and construction services. Warranty activities including managing claims and periodic inspections. Provide other basic services as required. Refer to the Request for Qualifications for more detailed project scopes. * * * RFQ No. 2008-30-FC Project Nos. 0951 27 01/P000687 Fort Lauderdale High School (proposed construction budget $29,150,340): Phase replacement in 2 phases to include: Phase I - Demolish selected buildings, tennis courts, swimming pool, track and athletic field. Construct a 3-story Administration Classroom Buildings[2] of 68,949 GSF; parent drop off/pick-up area and visitor parking; 5 tennis courts. Relocate existing baseball field. Phase II - Demolish selected building. Construct a 3-story parking structure including required access road work; Regional Athletic Facility. Renovate existing courtyard for ADA access to Gym and Auditorium. Renovate Building 8 into Science Labs. * * * Award: Project will be awarded by Facility. Proposed Construction Budget: Includes all costs inclusive of the Construction Manager's fees, Cost of Work, and any other costs related to construction. Minimum Selection Criteria: Will include the following as a minimum, (refer to document RFQ, Article X Submittal Requirements for expanded list of selection criteria): The company's history, structure, personnel, licenses, and experience. Related projects similar in scope or amount completed by the company, including name of client or its representative. Financial information such as balance sheet and statement of operations and bonding capacity. Project management, scheduling and cost control systems the company uses for similar projects. Proposed minority business involvement in the project. . . . Cost control, value engineering techniques and constructability reviews. Description of litigation, major disputes, contract defaults and liens in the last five (5) years. Interview. Confirmation of references. Consideration of the volume of work previously awarded to each firm, with the object of effecting an equitable distribution of contracts among qualified firms, provided such distribution does not violate the principle of selection of the most qualified firms. * * * The completed RFQ response must be delivered . . . . NO LATER THAN 2:00 PM SEPTEMBER 3, 2008 * * * Qualifications Selection Evaluation Committee (QSEC): After submission, proposers will be evaluated by the Qualification Selection Evaluation Committee (QSEC) based upon the above minimum criteria. The QSEC will select no less than three (3) proposers, ranked in order of tabulated score. The QSEC will recommend the finalist(s) for award of contracts to Construction Managers to the Superintendent. The Superintendent shall either recommend award of contract(s) to the finalist(s) selected by the QSEC or recommend rejection of all proposals to the Board. After the Board approves the recommendations of the QSEC the Board will authorize the Superintendent, or designee, to negotiate a contract for services for fees to provide direct management of the Construction Management at Risk Contract. Recommendations by the Qualification Selection Evaluation Committee do not guarantee a contract will be awarded by the Board. Award of a contract does not guarantee that work will be issued. Fees will be negotiated in accordance with Board Policy 7003 and Section 287.055, F.S. Article I of the RFQ (as revised) listed "General Requirements" that "proposers [had to] meet" "[i]n order to be considered." As the parties stipulated in Admitted Fact 21, Article I.D. of the RFQ (as revised) provided, in pertinent part, as follows: All proposers must be prequalified according to 1013.46 F.S., SREF 4.1(8), and Board Policy 7003 at the time of submittal due date to this RFQ. Article I.H. of the RFQ (as revised) provided as follows: The School Board of Broward County, Florida reserves the right to reject any or all responses, to waive technicalities, or to accept the proposal that, in its sole judgment, best serves the interest of The School Board of Broward County, Florida. Article II of the RFQ (as revised) described the "Selection Process." As the parties stipulated in Admitted Fact 22, Article of the RFQ (as revised) "was entitled 'Proposal Review by Staff' and stated as follows": Facilities and Construction Management Division staff will conduct a review of the proposer's submittal to determine whether the proposer meets the terms of this RFQ, requirements of the Florida Statutes, State Requirements for Educational Facilities regulations, Florida Building Code, and any other code, statute, or standard applicable at the time of response. Facilities and Construction Management Staff will provide information to the QSEC Members showing payments made by the district to the proposing firms over the past three (3) years. Non-compliant proposals will be recommended to the committee for rejection. As the parties stipulated in Admitted Fact 23, Article of the RFQ (as revised) "was entitled 'Shortlist Selection' and stated as follows": The QSEC Members will assign points to each proposer, for each facility, based upon the Selection Criteria below and attached Selection Criteria Score Sheet in the shortlist evaluation process. Each QSEC Member shall assign points for each proposer according to the selection criteria and rank them according to their scores. The proposer receiving the most points by a QSEC Member will be considered the first choice of that QSEC Member. The firm that receives the most first choice votes from the committee will be the top-ranked proposer. The second-ranked proposer will be the proposer that receives the most points, other than the proposer who was already selected as the top-ranked, and so on. In the event of a tie a voice vote will be taken until the tie is broken. If the voice vote is not unanimous, then a roll-call vote will be taken. The selection process will establish a "shortlist" for each facility/project of not less than three (3) proposers and no more than five (5) proposers submitting proposals. Shortlist selection will be done by each facility. Article II.E. of the RFQ (as revised) called for "[p]resentations" to be made to the QSEC by the shortlisted proposers. As the parties stipulated in Admitted Fact 24, Article II.G. of the RFQ (as revised) "was entitled 'Final Selection' and stated as follows": The QSEC will interview and rank the shortlisted firms. The QSEC will assign points to each proposer, for each facility, utilizing the Selection Criteria and point schedule included with the Selection Criteria Score Sheet to finalize the selection. Note, M/WBE staff will provide scores for M/WBE categories. However, such scores are recommendations by M/WBE staff and may be adjusted by individual QSEC Members. Each QSEC Member shall assign points for each proposer according to the selection criteria and rank them according to their scores for each project/facility. The proposer receiving the most points by a QSEC Member will be considered the first choice of that QSEC Member. The proposer that receives the most first choice votes from the committee will be the top-ranked proposer. The second-ranked proposer, will be the proposer that receives the most points, other than the proposer who was selected as the top-ranked proposer, and so on. In the event of a tie a voice vote will be taken until the tie is broken. If the voice vote is not unanimous, then a roll- call vote will be taken. The QSEC will recommend the finalist(s) for award of contract to Construction Manager to the Superintendent. The Superintendent shall either recommend award of contract(s) to the finalist(s) selected by the QSEC or recommend rejection of all proposals to the Board. After the Board approves the recommendations of the QSEC the Board will authorize the Superintendent, or designee, to negotiate a contract with the top-ranked firm according to Section 287.055, F.S. The Board shall have final approval of such recommendations. Final selection will be done by each facility. Article II.H. of the RFQ (as revised) contained the "Minimum Selection Criteria." This provision read as follows: Minimum Selection Criteria: Will include the following as a minimum, (refer to this document Article XI Submittal Requirements for expanded list of selection criteria): The company's history, structure, personnel, licenses, and experience. Related projects similar in scope or amount completed by the company, including name of client or its representative. Financial information such as balance sheet and statement of operations and bonding capacity. Project management, scheduling and cost control systems the company uses for similar projects. Proposed minority business involvement in the project (refer to this document Article I, J for requirements). Cost control, value engineering techniques and constructability reviews. Description of litigation, major disputes, contract defaults and liens in the last five (5) years. Interview. Confirmation of references. Consideration of the volume of work previously awarded to each firm, with the object of effecting an equitable distribution of contracts among qualified firms, provided such distribution does not violate the principle of section of the most qualified firms. As the parties stipulated in Admitted Fact 25, Article III of the RFQ (as revised) "[was] entitled 'Competitive Negotiations' and state[d] as follows": After the QSEC ranks the firms, recommends the finalist(s) to the Superintendent, and the Superintendent recommends the finalist(s) to the Board[,] [t]he Superintendent, or designee will negotiate a contract for services for fees to provide direct management cost of the CM and Guaranteed Maximum Price (GMP). The CM contract shall maintain an "open book" project accounting process, with any savings returned to the Board. Should the negotiations not result in a contract with the finalist at a price determined by both parties to be customary, fair, competitive, and reasonable, negotiations with that firm shall be formally terminated. The Superintendent, or designee, shall undertake negotiation with the second most qualified firm and thereafter, if necessary, with the third firm. Should the Board be unable to negotiate a satisfactory contract with any of the selected firms, additional firms will be selected in accordance with the above- described procedure. Negotiation should continue in accordance with Section 287.055, F.S., or until the Board determines not to proceed and to re-advertise and repeat the process. Article IV of the RFQ (as revised) addressed the "Scope of Services." It simply provided as follows: "Refer to attached Agreement Between Owner and Construction Manager for requirements." Article 3 of the "attached Agreement Between Owner and Construction Manager" (Sample Contract) enumerated the "Construction Manager's Services." Those services to be performed by the hired construction manager during the "Pre-Design Phase" were described in Article 3.2 of the Sample Contract as follows: The Construction Manager shall review project requirements, educational specifications, on and off-site development, survey requirements, preliminary budget, and make value engineering and constructability recommendations for revisions to the Owner and Project Consultant in the form of a written report prior to the final payment for this phase. The Construction Manager shall, subject to Owner's approval and compliance with existing Owner completion schedule, establish a preliminary master project schedule identifying all phases, Critical Path elements, responsibilities of the Owner, Project Consultant, outside agencies, third parties and any other impacts which would affect project schedule and progress and update them monthly throughout the duration of the contract. When the project includes renovation or expansion of an existing Facility, the Construction Manager will assist the Construction Team in preparing an analysis package outlining the condition of the existing Facility, existing structure, existing finishes, and existing equipment, code deficiencies, energy use, and life expectancy of other building systems by providing constructability, value engineering, and cost estimates recommendations. The package should contain the Construction Manager's recommendations, cost estimates and preliminary schedules. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for this phase. The Construction Manager shall prepare detailed cost estimates and recommendations to Owner and Project Consultant at S.D. (Schematic Design), D.D. (Design Development), C.D. (50% and 100% Construction Documents) phases of the project. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for each phase. The Construction Manager shall provide project delivery options for the design, bid, and bid packaging of the project for efficient scheduling, cost control and financial resource management. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for this phase. The Construction Manager shall utilize information and reporting systems to provide the Owner with monthly reports containing accurate and current cost controls, work status, including but not limited to Work narrative, Work completed/anticipated, short term and long term schedules, estimated expenditures, and project accounting systems of the project at all times. Such information shall be provided to the Owner and Project Consultant in the form of a written report, prior to final payment for this phase. The Construction Manager shall prepare a report with the Project Team's participation which shall describe, as a minimum, the Work plan, job responsibilities, and written procedures for reports, meetings, inspections, changes to the project, building systems, and delivery analysis and other relevant matters. Such information shall be provided to the Owner and Project Consultant prior to final payment for this phase. The Construction Manager shall provide market analysis and motivation for subcontractor interest and recommendations for minority business participation. This shall include analysis of the Construction Manager's historical data for subcontracting, communication with contractor and trade organizations requesting participation, review of the Owner's M/WBE data, advertising, outreach programs, mailings to all prospective bidders identified by these actions, and reporting of all of the for[e]going to the Owner. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for this phase. The Construction Manager's personnel to be assigned during this phase and their duties and responsibilities to this project and the duration of their assignments are shown on Exhibit D to the General Conditions. All required reports and documentation shall be submitted and approved by the Owner as pre-requisite to progress payments to the Construction Manager by the Owner during this phase. Those services to be performed by the hired construction manager during the "Design Phase" were described in Article 3.3 of the Sample Contract as follows: The Construction Manager will be required to attend all project related meetings and include a summary of the meeting of its monthly report to the Owner as specified in Document 01310. The Construction Manager will periodically review to the best of their abilities all Contract documents for constructability and compliance with applicable laws, rules, codes, design standards, and ordinances. Such information shall be provided to the Owner and Project Consultant in the form of a written report in the format as noted herein prior to final payment for this phase (Refer to exhibits G and H). The Construction Manager will be required to work with and coordinate [its] activities with any additional consultants, or testing labs and others that Owner provides for the project and report all findings as specified in Document 01310. The Construction Manager shall review all Contract documents for the new and existing buildings and/or building sites and provide value engineering recommendations to minimize the Owner's capital outlay and maximize the Owner's operational resources. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for this phase. All such recommendations shall be acknowledged and incorporated into the construction documents by the Project Consultant unless otherwise authorized by the Owner in writing. The Construction Manager will review construction documents and the new and existing buildings conditions and/or building site to reduce to the best of [its] abilities conflicts, errors and omissions and shall coordinate with the Project Consultant in order to eliminate change orders due to errors, omissions and unforeseen conditions. The Construction Manager shall periodically update the master project schedule and make recommendations for recovery of lost time. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for this phase. The Construction Manager will coordinate with the Project Consultant and provide to the Project Construction Team permitting applications and requirements for the projects. The Construction Manager will periodically update cost estimates and make recommendations to keep the project within the FLCC. AT COMPLETION OF THE CONSTRUCTION MANAGER'S REVIEW OF THE PLANS AND SPECIFICATIONS, EXCEPT ONLY AS TO SPECIFIC MATTERS AS MAY BE IDENTIFIED BY APPROPRIATE WRITTEN COMMENTS PURSUANT TO THIS SECTION, CONSTRUCTION MANAGER SHALL WARRANT, WITHOUT ASSUMING THE PROJECT CONSULTANT'S RESPONSIBILITES, THAT THE PLANS AND SPECIFICATIONS ARE CONSISTENT, PRACTICAL, FEASIBLE AND CONSTRUCTIBLE. CONSTRUCTION MANAGER SHALL WARRANT THAT THE WORK DESCRIBED IN THE PLANS AND SPECIFICATIONS FOR THE VARIOUS BIDDING PACKAGES IS CONSTRUCTIBLE WITHIN THE SCHEDULED CONSTRUCTION TIME. DISCLAIMER OF WARRANTY: THE OWNER DISCLAIMS ANY WARRANTY THAT THE PLANS AND SPECIFICATIONS FOR THE PROJECT ARE ACCURATE, PRACTICAL, CONSISTENT OR CONSTRUCTIBLE OR WITHOUT DEFECT. .10. The Owner may select certain projects for expediting using fast-track construction. When this option is exercised, in writing, by SBBC, it shall be implemented in accordance with the following: A. Design/Construction documents as noted herein shall be submitted by the Consultant for review and approval by SBBC (including Building Code review and Building permit issuance for 100% completion documents), the Construction Manager and others, as applicable, having jurisdiction: Foundation/Structural/LCCA/Site and Off- Site Package-100% Documents A separate 50% completion progress set (for information only) of Building Finish Package drawings shall also be submitted which shall show all of the major characteristics of the project utilities and service, detailed site and floor plans, elevations, section, schedules, etc. Construction may begin after approvals and building permit is obtained for above package. Building Finish Package-100% Documents As mutually agreed by the parties in writing. .11 Guaranteed Maximum Price (GMP): Upon completion of the design phase [construction documents 100% complete] and prior to the bidding and award phase, the Construction Manager shall present to the Owner the GMP for the Owner[']s review and approval in accordance with Article 6 of this Agreement.[3] Those services to be performed by the hired construction manager during the "Bidding and Award Phase" were described in Article 3.4 of the Sample Contract as follows: At this stage the Construction Manager assumes the leadership responsibility for the project team. Upon obtaining all necessary approvals of the Construction Documents including a Building Permit as required by FBC and Owner approval of the latest Statement of Probable Construction Cost, the Construction Manager shall obtain bids and commence awarding construction contracts. The Owner will have the drawings and specifications printed for bidding purposes, either through its open Agreements with printing firms or as a reimbursable service through the Project Consultant, or as set forth in Article 26.03.08 in the General Conditions of this CM Agreement. The Construction Manager shall review the Owner[']s records of pre-qualified contractors, including Minority/Women Business Enterprises (M/WBE) and prepare a list of those recommended for work pursuant to this contract. The Owner reserves the right to reject any or all subcontractors recommended for approval. The Construction Manager shall maintain a list of all potential bidders, including M/WBEs and those who are approved as pre-qualified. The Construction Manager shall prepare and issue the bid packages to cover the scope of the Work for this contract. The Construction Manager, in coordination with the Owner, shall schedule pre-bid conferences as required and issue a written summary of the conference(s). Solicitation of Bids: .1 The Construction Manager shall enter into Contracts with the firm who submits the lowest, responsive and responsible bid. The Construction Manager shall advertise according to SBBC policies as amended from time to time for bids on Documents 00101 at least three (3) times, seven (7) days apart, and with the third (3rd) advertisement prior to a pre-bid conference if applicable and at least seven (7) days prior to the bid opening. Written proposals based on drawings and/or specifications shall be submitted to the Construction Manager. The written proposals shall be opened at the usual location for bid opening. A tabulation of the results shall be furnished by Construction Manager to the Owner. .6 The Construction Manager and Owner shall open at the Construction Manager location and evaluate at least three bids, if possible, for each portion of the Work solicited. The Construction Manager shall also make recommendations to the Owner for award to the lowest, responsive, and responsible bidder. A recommendation for award to other than the lowest bidder shall be justified in writing. Those services to be performed by the hired construction manager during the "Construction Phase" were described in Article 3.5 of the Sample Contract as follows: The Construction Manager shall fully comply with the provision[s] of the Owner's Project Manual, including but not limited to Division 0 and 1, and the attached General Conditions of this contract. In the event of a conflict between this Agreement and such documents the agreement shall control. The Construction Manager shall provide the minimum staffing level as set forth in Exhibit C-F for this project. The Construction Manager shall maintain and prepare monthly updates for all project schedules, including Critical Path elements, provide written progress reports, describe problems and corrective action plan(s) and conduct briefings as required by the Owner. Such information shall be provided to the Owner and Project Consultant in the form of a written report with progress payments requests. The Construction Manager may self perform certain construction work when it benefits the Owner, results in cost and time savings, and is pre-approved by the Owner in writing. The Construction Manager shall coordinate project close-out, operation, and transition to occupancy. The Construction Manager shall coordinate with the Project Consultant to provide complete project records including project manual and electronic Computer Assisted Drafting (CAD) drawings corrected to show all construction changes, additions, and deletions. (Construction Manager shall note all changes on the as-builts for the Project Consultant to reflect on the drawings and CAD disc.) The Construction Manager shall coordinate with the Owner's staff to prepare the Certificate of Final Inspection. The Construction Manager shall obtain and review all warranties, operation and maintenance manuals and other such documents, for completeness, have them corrected if necessary and submit them to the owner. The Construction Manager shall complete all punch list items generated by the Building Code Inspector (BCI), the Owner, the Project Consultant and any others having jurisdiction over the project during its inspections. Those services to be performed by the hired construction manager during the "Warranty Phase" were described in Article 3.6 of the Sample Contract as follows: The Construction Manager shall provide a minimum one (1) year warranty and shall coordinate and supervise the completion of warranty Work during the warranty period. Construction Manager shall participate with the Owner in conducting of warranty inspections held on the sixth (6th) and eleventh (11th) months after occupancy. Construction Manager shall deliver as-built drawings, warranties and guaranties to the Owner. Where any Work is performed by the Construction Manager's own forces or by subcontractors under contract with the Construction Manager, the Construction Manager shall warrant that all materials and equipment included in such work will be new except where indicated otherwise in Contract Documents, and that such Work will be free from improper workmanship and defective materials and in conformance with the Drawings and specifications. With respect to the same Work, the Construction Manager further agrees to correct all work found by the Owner to be defective in material and workmanship and not in conformance with the Drawings and Specifications for a period of one year from the Date of Owner Occupancy of the Project or a designated portion thereof or for such longer periods of time as may be set forth with respect to specific warranties contained in the trade sections of the Specifications or by Florida Law. The Construction Manager shall collect and deliver to the Owner any specific written warranties given by others as required by the Contract Documents. The Construction Manager shall provide a Warranty Summary Report at the end of the 6- month warranty period and 11-month warranty period. This report shall provide at a minimum: Description of each warranty item during the period. Date item reported to Construction Manager. Date item corrected. If more than one trip required, document each. Description of action taken to cure warranty item. Obtain signature of school principal or designee acknowledging warranty items have been completed. Other pertinent information, if applicable. Article V of the RFQ (as revised) provided the following information with respect to "Fees and Pricing": Successful proposers shall negotiate a fee for providing construction management services during the design phase and subsequently shall negotiate a GMP for construction services during the bidding and construction phase. Architectural/Engineering firms will develop Contract documents under separate contract with the Board. As the parties stipulated in Admitted Fact 26, Article VII of the RFQ (as revised) "[was] entitled 'Board's Right to Reject' and state[d] in part as follows": The Board reserves the right to reject any and all proposals and readvertise the project(s) at any time prior to Board approval of the recommended proposer(s) and the negotiated agreement(s). All costs incurred in the preparation of the Proposal and participation in this RFQ process shall be borne by the proposers. Proposals submitted in response to this RFQ shall become property of the Board and considered public documents under applicable Florida law. The District reserves the right to accept or reject any and all submittals, or to waive any technicalities or formalities when and if it is in the best interests of the District. Rejection: A submittal shall be rejected for failure to comply with one or more of the following requirements: The proposer is not licensed or registered in the State of Florida to provide the proposed services. The submittal shall be rejected if not received by The School Board of Broward County, Florida by the specified deadline. Not Applicable. Article XI of the RFQ (as revised) discussed "Submittal Requirements" and contained the following provisions concerning "Related Projects Similar in Scope (to this RFQ)" and "References": Related Projects Similar in Scope (to this RFQ): List educational projects of related scope and size. Provide name and location of project, project owner, project owner name, address phone and contact person, project cost, current project status, firm[']s key personnel assigned to the project. . . . L. References: Provide a list of all projects, clearly stating name of project, using Construction Management at Risk, completed or in progress within the last five (5) years from due date of this RFQ. If Proposer[']s firm also has offices outside the tri-county area (meaning Broward, Miami-Dade, or Palm Beach), then at a minimum provide references for all Construction Management at Risk projects in the tri-county area. List projects that are 75 percent or greater of the construction budget statement in the Public Announcement for each listed project. Provide the address, telephone numbers and contact person(s) listed as references for each project. . . . As the parties stipulated in Admitted Fact 27, "[o]n or about September 3, 2008, [Respondent] received proposed qualifications to provide construction management at risk services for [the FHS Project] from 13 vendors including Petitioner." Among the other "vendors" submitting "proposed qualifications" were Elkins Constructors, Inc., the Morganti Group, Inc., and W. G. Mills, Inc. As the parties stipulated in Admitted Fact 28, "[i]n accordance with the terms and conditions of the RFQ [as revised] and [Respondent's] governing statutes, rules and policies, Respondent's Qualifications Selection and Evaluation Committee ('QSEC') recommended the rejection of certain proposers for their failure to comply with [Respondent's] pre-qualification requirements or limits." There were three such "proposers": Elkins Constructors, Inc.; the Morganti Group, Inc.; and W. G. Mills, Inc. At the time of the "submittal due date to this RFQ [as revised]," neither Elkins Constructors, nor the Morganti Group, was "prequalified according to 1013.46 F.S., SREF 4.1(8), and Board Policy 7003" for any project. W. G. Mills, on the other hand, was "prequalified" for certain projects, but only within the following limits: a "[p]er [p]roject [l]imit [of] $25,000,000 [and an] [a]ggregate [l]imit [of] $250,000,000." The "advertised Proposed Construction Budget" of the FHS Project was $29,150,340, which was more than W. G. Mills' "[p]er [p]roject [l]imit [of] $25,000,000." As of the date "proposed qualifications" were due, there were 11 prequalified firms, including W. G. Mills, who had a "[p]er [p]roject [l]imit" of between $17,000,000 and $26,000,000. These firms were not eligible to be awarded the contract for the FHS Project because the project's "advertised Proposed Construction Budget" was in excess of their "[p]er [p]roject [l]imit." W. G. Mills was the only one of these 11 prequalified firms to respond to the RFQ (as revised). As the parties stipulated in Admitted Fact 29, "[i]n accordance with the terms and conditions of the RFQ [as revised] and [Respondent's] governing statutes, rules and policies, [the] QSEC next evaluated and short-listed the remaining proposers. It thereafter received presentations from the short-listed proposers and, after scoring those short-listed proposers, recommended Petitioner . . . to [Respondent] as the proposer with whom to negotiate a contract for services for fees to provide direct management cost of the construction manager and the project's guaranteed maximum price ('GMP')." As the parties stipulated in Admitted Fact 30, "[o]n October 7, 2008, [Respondent] approved [the] QSEC's selection of Petitioner . . . as the vendor with whom negotiations would be had for [the] Fort Lauderdale High School component of the RFQ [as revised] and 'authorized negotiations for Construction Management at Risk Services.' The scope of Construction Management at Risk services was [as noted above] included within the RFQ [as revised]. The summary explanation and background portion of the agenda item to authorize negotiations stated that the 'Superintendent's designees will negotiate the selected Constriction Management at Risk Services fees for the projects and recommend award of contracts at a future School Board Meeting.'" As the parties stated in the "Statement of the Controversy" section of their Joint Pre-Hearing Stipulation, "[n]egotiations between [Respondent] and [Petitioner] occurred between October 2008 [following Respondent's approval of the QSEC's selection of Petitioner] and December 2009." In December 2009, Cubellis, the architectural firm working on the FHS Project for Respondent, was "experiencing some financial difficulties" and there was uncertainty as to whether it would "be able to continue [on] the project." As a result, negotiations between Respondent and Petitioner were halted. Eventually, Cubellis "assigned [its] contract [with Respondent] to somebody else" (specifically, Manuel Synalovski Associates, LLC), but negotiations between Respondent and Petitioner never resumed. Petitioner's last written contract proposal was dated December 10, 2009. It was based on a proposed construction budget of $18,297,367 and provided for the following "Negotiated Contract Terms": Construction Manager Fees: Pre-Design Not Applicable Design Not Applicable Bidding & Award $37,685 Construction Phase Fee $1,172,370 Warranty $35,000 Overhead $289,200 Profit $185,385 General Conditions $659,846 Total $2,379,489 Above Fees based on scope of work issued "Project Scope" document dated 11/5/2009 per 11/9/2009 letter from M. Decker. CM Performance and Payment Bonds and GL Insurance are included based on budgeted contract amount of $18,297,367. Builders Risk, Contingency, and Subcontractor insurance costs are not included in the fees and will be shown in the schedule of values as separate line items as a cost of work. Should the cost of work increase Bonds and GL insurance fees are to be adjusted at insurance providers' invoiced amount. Overhead, profit and bond allowances for Change Orders: 10% Substantial Completion: 570 Final Completion in General Conditions 25.01.02: 600 Construction Phase Fee and General Conditions in 25.01.02: $3,050 per Consecutive Calendar Day Liquidation Damages for Substantial Completion: $1,000 per Consecutive Calendar Day Liquidation Damages for Final Completion: $600 per Consecutive Calendar Day This contract proposal was made following a December 8, 2009, negotiation session at which Denis Herrmann, Respondent's Director of Design and Construction Contracts, had stated that he had negotiated a construction management at risk contract for another project the previous day where the "Construction Manager Fees" were 13.8 percent of that particular project's proposed construction budget. Mr. Herrmann had relayed this information to Petitioner's representatives at the meeting to give them "a flavor for the range [Respondent was] talking about, not to give them a [specific] number [or percentage] that would be acceptable." The "Construction Manager Fees" proposed by Petitioner in its December 10, 2009, offer were slightly less than 13.8 percent of the $18,297,367 proposed construction budget (but they did not cover any "Pre-Design"-related or "Design"-related work). While Respondent has never, in writing, specifically rejected Petitioner's December 10, 2009, offer, neither has ever formally accepted it. As the parties stipulated in Admitted Facts 45 and 48, respectively, Respondent's "Superintendent of Schools has not placed an item on [the School Board] agenda recommending that [Respondent] enter into a contract with [Petitioner] concerning the RFQ [as revised]," and "[Respondent] has not approved a contract with [Petitioner] concerning [the] RFQ [as revised]." It has been two years since "[Respondent] approved [the] QSEC's selection of Petitioner . . . as the vendor with whom negotiations would be had." Significant changes impacting the FHS Project have occurred over that period of time. Respondent now finds itself in the midst of an "unprecedented budget crisis," making it especially imperative that it "take every [possible] step to maximize the purchasing power of the public's dollars." A precipitous decline in revenue available for capital projects (due, in large measure, to a decline in property values, coupled with a reduction in the capital outlay millage rate) has required Respondent to eliminate or scale back various planned projects. The FHS Project is among the projects that have been scaled back. As the parties stipulated in Admitted Fact 31, "[p]rior to, during and subsequent to its negotiations with [Petitioner], [Respondent] determined on several occasions that the project scope of the [FHS Project] needed to be further adjusted, ultimately resulting [in] the following project scope [with strike-throughs and underlining indicating, respectively, deletions and additions]": Concurrent Replacement in two phases to include: Demolish existing swimming pool (buildings 15 and 16). Demolish existing tennis courts and replace with 6 tennis courts. Demolish Buildings 1, 2, 3, 4, 11, 12, 13, and 14. Construct basketball courts. Construct Regional Athletic Facility. Construct (2) 3-story buildings (1 – Administration & 1 - Classroom) of approximately 68,940 GSF combined to include Administration, 3 general classrooms, 5 resource rooms, 4 science labs and related spaces, 4-classroom ESE suites, 1 Business Technology lab, 1 Family and Consumer Science (ProStart) lab, 1 Health Occupations Lab, 1 Pre-Law Public Service Education Lab, Custodial spaces, Textbook Storage, and Student, Staff and Public Restrooms. Remodel Renovate existing Science Building (building 8). Construct Parent Drop Off and Pick Up area and Staff/Visitor Parking. Resurface Student Parking. Construct New Student parking area on the West side of the site to increase parking capacity by 92 spaces. Modify existing temporary bus loop to meet SREF code and ADA standards; modifications will include barricades and covered sidewalk. Redesign courtyard to meet current ADA standards.' As the parties further stipulated in Admitted Fact 31, "[t]he project scope was revised five (5) times between October 7, 2008 and December 2, 2009[,] [and Petitioner] was notified of the changes in scope and acknowledged the same." "[R]evis[ions]" have also been made to the project's budget. Respondent's "5-Year Plan" allocates funding for all costs (including, but not limited to, construction costs4) associated with each of Respondent's funded capital projects. As the parties stipulated in Admitted Fact 32, "[Respondent] adopts and revises its 5-Year Capital Improvement Plan ('5-Year Plan') each year." As the parties further stipulated in Admitted Fact 33: [Respondent's] 5-Year Plan adopted for Fort Lauderdale High School for Fiscal Years 2009-10 to 2013-14 eliminated the $39,491,259 previously budgeted as "Capacity Additions" . . . . Instead, the 2009-10 to 2013-14 Five Year Plan provided $21,050,000 for Capacity Additions . . . . Respondent's current "5-Year Plan" (for the Fiscal Years 2010- 2011 to 2014-2015), which was adopted on September 7, 2010, allocates $22,366,085 to the FHS Project (as scaled back). The dour economic conditions responsible (in part) for the drop in tax revenues available to fund Respondent's capital projects have also led to increased competition in the construction industry and a resultant decline in construction prices. This increased competition is particularly pronounced "in the procurement area of hard bidding." During "the peak of the construction boom," before the downturn in the economy, it was not atypical for Respondent, when it "hard bid" a construction project, to get just one or even no bids in response to the solicitation. Now, Respondent "expect[s] to see between half a dozen [and] a dozen or more bidders." Moreover, recently, winning bids on "hard bid" projects have been, on average, well below these projects' advertised proposed construction budgets. Respondent has not experienced the same overall cost-savings results when it has used the "Construction Management at Risk delivery method." Given the market conditions that exist today, Respondent estimates that the construction costs for the FHS Project (as scaled back) would be no more than $16,950,000 and possibly as little as approximately $13,000,000 (if a "hard bid" were used). These amounts are considerably less than the "Proposed Construction Budget of $29,150,340" that had originally been "advertised." There are prequalified firms (including W. G. Mills) which were not eligible to be awarded the contract under the RFQ (as revised) because their "[p]er [p]roject [l]imit" was less than $29,150,340, but which would now be able to bid on a scaled-back FHS Project were it to be readvertised (with a proposed construction budget of $16,950,000). Another (and perhaps the most significant) difference between the circumstances existing at present and those that existed two years ago (vis-à-vis the FHS Project) is that the design of the project (as scaled back) has advanced to the point that, with a few revisions,5 the construction documents for the project will be 100 percent complete.6 As a result, Respondent no longer has a need for most, if not virtually all, of the "pre-design" and "design" services, described in Articles 3.2 and 3.3 of the Sample Contract, that, back in 2008, it had wanted a construction manager to perform. In April 2010, Respondent's Office of the Chief Auditor issued a report (April 2010 Audit Report) critical of Respondent's use of the "Construction Management at Risk delivery method" in connection with 14 projects "which were included in the Construction Management at Risk Kitchen/Cafeteria RFQ No. 2006-12-FC." The report read, in pertinent part, as follows: The projects included in RFQ No 2006-12-FC were sufficiently completed by the Architect/Engineer firm(s) prior to being advertised as CM at Risk construction projects. The inability [of] any CM firm to provide "professional services" and scheduling of both design and construction phases represents a deviation from the intent of Florida Statutes, SREF and the School Board's CM at Risk contract.[7] In nearly every executed CM at Risk agreement in the Kitchen/Cafeteria program, the Pre- Design and Design phase responsibilities of the CM were stricken from the contract. That is a further representation that the input required by a prospective CM to qualify for the committee selection process was not, nor was it intended to be provided. F.S. 1013.45(1)(c) also states that the use of the CM at Risk delivery method " . . . shall not unfairly penalize an entity that has relevant experience in the delivery of construction programs of similar size and complexity by methods of delivery other than program management." All of the projects in the Kitchen/Cafeteria program were originally intended to be "hard-bid" but were changed to the CM at Risk delivery method. One project was removed from the group prior to the due date of submittals for RFQ No. 2006-12-FC. That hard bid project, Margate ES, cost approximately $5.6 million, including nearly $466,226 in change orders, which was approximately $3.3 million less, on average, than the fourteen (14) projects that remained in RFQ No. 2006-12- FC. Due to the change in delivery method, general contracting firms could have been "unfairly penalized" by the decision to use the CM at Risk delivery method, as many local general contractors have the relevant experience in the delivery of construction programs of similar size and complexity by methods other than the CM at Risk delivery method.
Recommendation We recommend that Facilities & Construction Management discontinue developing construction procurement packages (i.e. RFQ and RFP) for award of CM at Risk agreements when construction management services requested are associated with reused, prototypical or otherwise sufficiently developed construction documents. Kitchen/Cafeteria program data indicates that the benefits associated with the CM at Risk delivery method were not realized using prototypical designs, as the program resulted in over $24 million in avoidable fees while circumventing applicable laws and regulations. On May 10, 2010, Mr. Herrmann sent a letter to Respondent's General Counsel requesting, in light of the April 2010 Audit Report, a "legal opinion related to the award of a Construction Manager at Risk Agreement (CM) to [Petitioner] and whether such an award would comply with Chapter 1013.45(1)(c), S. and State Requirements for Educational Facilities 1999 (SREF)," given that the FHS Project (as scaled back) was then "in the design phase and Phase III 100% Construction Documents [were] being prepared." The concluding paragraph of the letter read as follows: In this project, The Weitz Company has been selected by the board and we intend to recommend award of a contract within several months. An award of a CM agreement in this case would not violate the specific audit recommendation and we believe such an award does not violate statute or SREF. Please advise whether you concur. Mr. Herrmann has since changed his opinion. He now believes (reasonably so, in the undersigned's view) that "award of a CM agreement" in the instant case would be inconsistent with the "audit recommendation" inasmuch as the FHS Project (as scaled back) now has "sufficiently developed construction documents." On May 18, 2010, Mr. Herrmann sent another letter to Respondent's General Counsel. This letter read as follows: This is to provide you with additional information relating to a request for a legal opinion regarding the award of a Construction Manager at Risk Agreement (CM) to The Weitz Company. Please also refer to the attached memos dated 10/14/09, 11/16/09 and 5/10/10. In summary, we have requested opinions based on the following: Whether such an award would comply with applicable statutes, SREF, and board policy given the extent of the changes to the scope and budget. Whether such an award would comply with Chapter 1013.45(1)(c), F.S. and State Requirements for Educational Facilities 1999 (SREF). We have recently revised the construction cost estimate as a result of current market conditions, and the project consultant, Manuel Synalovski [Associates], LLC agrees with the revised estimate. The change in the cost estimate is as follows: In the RFQ: $29,150,340 October 2009 (Change in scope): $21,770,000 November 2009 (Market conditions): $18,297,367 May 2010 (Market conditions) $16,950,000 Please advise whether we should proceed with the award or reject all bids. Respondent's General Counsel responded to neither of these May 2010, letters from Mr. Herrmann. As the parties stipulated in Admitted Fact 34, "[o]n June 15, 2010, [Respondent] approved Item J-15 during its June 15, 2010, Regular Meeting." The "Requested Action" and "Summary Explanation and Background" section of the Agenda Request Form for this agenda item (J-15) provided as follows: REQUESTED ACTION Approve the change in the delivery method from Construction Management at Risk to Design/Bid/Build and the First Amendment to the Professional Services Agreement with Manuel Synalovski Associates, LLC (MSA) for Fort Lauderdale High School, Phased Replacement Project No. 095-27-01, dated February 12, 2008. SUMMARY EXPLANATION AND BACKGROUND Scope of Work: Basic Services Amended 6/15/10: This item changes the delivery method from Construction Management at Risk to Design/Bid/Build. Demolish existing Swimming pool (Buildings 15 and 16); demolish existing tennis courts; demolish Buildings 1, 2, and 3; construct two 3-story buildings (1 administration and 1 classroom) of approximately 68,940 gross square feet combined to include administration, 3 general classrooms, 5 resource rooms, 4 science labs and related spaces, 4 ESE classroom suite, 1 business technology lab, 1 family and consumer science (ProStart) lab, 1 health occupations lab, 1 pre-law public service education lab, custodial spaces, textbook storage, and student, staff, and public restrooms. Remodel existing science building (Building 8). Construct new parent drop off and pick up areas and staff/visitor parking. Construct new student parking area on the west side of site to increase parking capacity by 92 spaces. Modify existing temporary bus loop to meet SREF, Florida Building Code and ADA Standards. ADA modifications will include barricades and covered sidewalk. Remodel existing courtyard for ADA access to gym and auditorium. MSA and the Superintendent's Negotiations Committee negotiated a total reduction in [architectural] fees from the February 12, 2008 Board approved amount of $2,021,000 to $1,683,650. This decrease in the Basic Services Fees totals $337,350 and is decreased as follows: Phase IV (Bidding and Award) by $54,357, Phase V (Construction Administration) by $269,250, and Phase VI (Warranty) by $13,743. This fee reduction is as a result of a reduction of the original scope as per Attachment 2 to the First Amendment. This First Amendment also reduces the Fixed Limit of Construction Cost (FLCC) from $29,150,340 to $16,950,000 as a result of the reduction in scope and construction costs resulting from current market conditions. The Risk Management Department and the Office of the Chief Auditor have reviewed this First Amendment. The School Board Attorney has approved this First Amendment as to form and legal content. As the parties stipulated in Admitted Fact 35, on June 30, 2010, "[Respondent] posted its Revised Recommendation[] and Tabulation for [the FHS Project, which] set forth the following recommendation": Per Article VII.A of the RFQ, based upon the recommendation of the Qualification Selection Evaluation Committee, the Facilities and Construction Management Division intends to recommend that The School Board of Broward County, Florida, at the School Board meeting on July 20, 2010, reject all responses received for Fort Lauderdale High School Project No. P.000687. The original, intended scope of work as set forth in the original RFQ is substantially and materially different than the revised scope of work and budget in the proposed contracts and such work should be re- advertised and re-bid. This decision to "reject all responses" and "re- advertise[] and re-bid" was based on an honest and good faith exercise of discretion, intended, ultimately, to allow Respondent to receive (in the words of Mr. Herrmann) "more bang for [its] buck." As the parties stipulated in Admitted Facts 39 through 41, Petitioner timely protested Respondent's intended "reject[ion] [of] all responses." As the parties stipulated in Admitted Facts 42 through 44, after the parties had unsuccessfully attempted "to resolve the protest by mutual agreement," Respondent, at Petitioner's request, referred the matter to DOAH on August 23, 2010.
