The Issue Whether the bid submitted by VSM of Florida, Inc., under cover of the bid blank issued to VSM, Inc. for the construction on State Project 16070-3511 (the Project), with the Florida Department of Transportation (Department), was the lowest responsive bid. Whether the Department acted arbitrarily, illegally, dishonestly or fraudulently in rejecting the bid submitted by VSM of Florida, Inc. under cover of the bid blank issued to VSM, Inc. for the construction of the Project based on the Department's determination that VSM of Florida, Inc. was not a prequalified contractor. Whether VSM, Inc., has standing to bring this bid protest by and on behalf of its operating subsidiary, VSM of Florida, Inc.
Findings Of Fact Upon consideration of all of the evidence, the following relevant findings of fact are made: Bids submitted on the Project were opened on May 27, 1992 and posted on June 18, 1992. The bid submitted by VSM of Florida, Inc. under cover of the bid blank issued by the Department to VSM, Inc., a prequalified contractor, was the apparent low bid on the Project in the amount of $1,565,565.00. The bid submitted by Leware under cover of the bid blank issued by the Department to Leware, a prequalified contractor, was the apparent second low bid on the Project in the amount of $1,600,000.00. All contractors who seek to bid on Department projects in excess of $250,000.00 must be prequalified by the Department in order to bid on such projects. The Project was in excess of $250,000.00 thereby requiring all bidders to be prequalified contractors. The Department's Contract Administration Office (CAO) is responsible for prequalifying contractors to bid on Department projects in excess of $250,000.00, for issuing bid packages for such projects, and for processing bids for award of a contract. The Department will not issue a bid blank for a project in excess of $250,000.00 unless a request for a bid blank is received from a prequalified contractor. Upon a request being made, the Department first determines that the contractor making the request is prequalified and has the capacity to bid on the project, then the Department prints or stamps the name of the prequalified contractor on the front page (cover sheet) of the bid blank and mails the bid package to the prequalified contractor. Contractors do not have to be prequalified to bid on projects of less than $250,000.00 but the Department's Equal Employment Opportunity (EEO) requirements would be applicable to projects of less than $250,000.00 as well as those in excess of $250,000.00. Contractors do not have to be prequalified to work as subcontractors on a Department project. The Department does not approve subcontractors on Department projects but does review and approve the use of subcontractors on Department projects to ensure that subcontractors do not perform in excess of 49% of the work on the project in violation of Standard Specification No. 8 in the Department's contract. Review of the subcontractors being used on a project is conducted by the Department's District offices and the CAO is not made aware of which contractors are being used as subcontractors an a project. There is no specific language in the application for prequalification that requires a separate application be submitted for each contracting firm seeking prequalification. However, a copy of the Department's rule included in the application package does require that a separate application must be submitted for each contracting firm seeking prequalification. The purpose of the information sought in Question 8 (Question 6 in 1989) of the application concerning the affiliates of the parent company is to: (a) determine if any of the affiliates have been disbarred by other agencies or convicted of contract crimes which would disqualify them or; (b) alert the Department that an affiliate is applying for prequalification independent of the parent company so that the Department can properly audit the financial statements of each applicant. It is not intended to allow or provide for a joint application. The application must be accompanied by an audited financial statement and an equipment list. First-time applicants must also provide resumes and letter of recommendation supporting the applicant's representation that it is qualified and capable of performing the type of work for which it is seeking qualification. The CAO reviews the application for completeness and checks various data bases to determine if the applicant and its affiliates have adverse reports from other contracting agencies. The Department's Internal Audit Section reviews the financial information provided with the application for purposes of developing the Current Ratio and Net Worth Factors for use in calculating the applicant's Maximum Capacity Factor. The Internal Audit Section also reviews the information on corporate subsidiaries provided in response to "Question 8" (Question 6 in 1989) on the application. The Department's Construction Office reviews the equipment and experience information provided with the application to develop an applicant's Ability Factor for use in calculating the applicant's Maximum Capacity Factor. The Internal Audit Section and the Construction Office report their conclusions to the CAO, which issues the Certificate of Prequalification (Certification) to the applicant. Where the Opinion Letter of the applicant's Certified Public Accountant, which must be included with the application, states that the financial statement was audited in accordance with General Accepted Accounting Principles, the Department can rely on the Opinion Letter and the financial statements submitted with the application, unless there is a reasonable basis for the Department to question the financial statements. Where the Opinion Letter identifies the entity and subsidiaries, if any, whose financial condition is reflected in the financial statement, it is the Department's practice and policy to issue the Certification in name of the entity whose financial condition is reflected in the financial statement as indicated by the Opinion Letter. Where the Opinion Letter indicates that the financial condition of both the parent company and subsidiaries are reflected in the financial statement, then the Department will issue the Certification in the name of the parent company and the generic term "subsidiaries" or "subsidiary". Neither the parent company nor the subsidiary would be qualified separately. Under the above circumstances, the Department would accept a bid submitted by the parent company without the subsidiary even though the bid blank had been issued in the name of the parent company and "subsidiary" or "subsidiaries". For example, a Certification was issued by the Department to "Balfour Beatty Construction, Inc. and subsidiary", the bid blank was issued in the same name but the bid was submitted by and awarded to Balfour Beatty Construction, Inc. There was at least one other instance where the Department followed a similar procedure. The Department's justification for this practice is that the parent company has control over its subsidiaries and could submit a bid on their behalf and enter into a contract with the Department that would bind the subsidiaries. Whereas, with the converse, the subsidiary or subsidiaries are normally without authority to submit a bid on behalf of the parent company or enter into a contract with the Department on behalf of the parent company. However, where a prequalified parent company gives proper written authorization to a subsidiary to submit a bid on its behalf and such authorization is attached to bid, then the Department would not consider such bid submitted by the subsidiary as irregular. Where a parent company relies on the assets and experience of its majority-owned subsidiaries in its application for prequalification to which it has access to, and control over, and the Opinion Letter indicates the parent company to be the entity whose financial condition is reflected in the financial statement, then the Department would certify the parent company in its name alone and allow the parent company to bid on Department projects in excess of $250,000.00. Furthermore, the Department would allow the parent company's subsidiaries to perform all of the work on the project for the parent company notwithstanding Standard Specification No. 8 limiting the percentage of work which the subcontractors are allowed to perform on a Department project to 49%. The Department does not consider subsidiaries performing work for a parent corporation on a Department project as subcontractors within the meaning of Standard Specification No. 8 and thus, a parent company could bid on a Department project in its own name and rely solely on its subsidiaries to perform 100% of the work on the project without violating Standard Specification No. 8. For example, VSM, Inc. could bid on a Department project and, if awarded the bid, could rely solely on VSM of Florida, Inc. to perform 100% of the work on the project. It was conceded by the Department that VSM of Florida, Inc. has the expertise, experience and equipment to perform all of the work bid for on the Project. Where the applicant's name on the face of the application does not exactly correspond with the name of the entity whose financial condition is reflected in the financial statement, then the Department will issue the Certification in the name of the entity whose financial condition is reflected in the financial statement as indicated in the Opinion Letter. VSM, Inc. is a Florida corporation that was incorporated in 1988. In 1988 VSM, Inc. formed two subsidiary corporations, VSM of Florida, Inc. and VSM of Virginia, Inc. The parent corporation, VSM, Inc., owns 80% of the stock in both VSM of Florida, Inc. and VSM of Virginia, Inc. Van Monroe is the sole stockholder, sole director and president of VSM, Inc. Van Monroe is also the sole director and president of VSM of Florida, Inc. The remaining 20% stock of VSM of Florida, Inc. is owned by Gregory Monroe, brother of Van Monroe. Gregory Monroe is also vice president of VSM of Florida, Inc. These corporations (VSM, Inc. and VSM of Florida, Inc.) are separate entities with each having a separate Federal Identification Number. Beginning in 1989, VSM, Inc. applied for Certification with the Department to qualify to bid on projects in excess of $250,000.00. In the application form (Question 6), the applicant is requested to: "List the following for all affiliated companies: (a) Name and Address; (b) States Qualified ; and (c) Explain in detail your connection with this company and whether or not this company is qualifying with FDOT. In response to that question, VSM, Inc. answered in pertinent part as follows: (a) VSM of Florida, Inc., P. O. Box 5761, Jacksonville, FL 32247 (58-2916127); (b) Florida and; (c) VSM, Inc. - 80% Stockholder, Gregory B. Monroe - 20% Stockholder (We would qualify VSM of Florida, Inc. as a subsidiary of VSM, Inc.). The Department issued the Certification on April 21, 1989 in the name of VSM, Inc. Each of the applications for renewal of the Certification issued on April 21, 1989 submitted on March 26, 1990, March 26, 1991 and March 30, 1992 requested basically the same information in Question 8, as had Question 6 in the original application, and the answers were basically the same as in the original application. The renewal applications submitted on March 26, 1990 and March 30, 1992 have both VSM, Inc. and VSM of Florida listed as applicants. The Department subsequently lined out VSM of Florida, Inc. on each of these renewal applications and issued the Certification to VSM, Inc. The reason being, that each contracting firm seeking Certification must file a separate application, and the Opinion Letter indicated that the entity whose financial condition was reflected in the financial statement was VSM, Inc. A Certification was issued to VSM, Inc. on April 30, 1990, April 10, 1991 and April 16, 1992, respectively in response to the above renewal applications for Certification. The Certification dated April 16, 1992 expanded the classes of work to be performed under the certificate to include Bascule bridge repair (rehabilitation) work. In each of the above years, Van Monroe, the president of both VSM, Inc. and VSM of Florida, Inc., consciously chose not to seek Certification for VSM of Florida, Inc. independently of VSM, Inc. because VSM, Inc. and its subsidiaries operate as an integrated operation and could not be separated. Beginning in 1990 and each year thereafter, when VSM, Inc. applied for renewal of its Certification with the Department, it included a consolidated financial statement which contained the financial condition of its two subsidiaries, VSM of Florida, Inc. and VSM of Virginia, Inc. The Department chose not to issue the Certification in the name of "VSM, Inc. and subsidiaries" for these years because the Department concluded that the Opinion Letter indicated that the only entity whose financial condition was reflected in the financial statement was VSM, Inc. Although the Department conceded that the Certification could possibly have been issued to "VSM, Inc. and subsidiaries", the Department contended that this would not have changed the result of the bid since under either situation, VSM of Florida, Inc. had not submitted written authorization from VSM, Inc. authorizing VSM of Florida, Inc. to submit a bid on behalf of VSM, Inc. Since 1989, both VSM, Inc. and VSM of Florida, Inc., after requesting and receiving permission from the Department, have used the same vendor (prequalification) identification number. Additionally, the names VSM, Inc. and VSM of Florida, Inc. have been used interchangeably on documents submitted to and received from the Department. The current Certificate of Capacity, required by the Department of all prequalified contractors, was issued in the name of VSM of Florida, Inc. On February 26, 1992 under cover of the bid blank issued to VSM, Inc. by the Department, VSM of Florida, submitted a bid on a Department project in Polk County, Job No. 16630-3601. Because this bid was third lowest bid, no objection or declaration of irregularity to this bid format was made by the Department. On May 27, 1992 under cover of the bid blank issued to VSM, Inc. by the Department, VSM of Florida, Inc. submitted a bid on a Department project in Gadsden County. The Department notified VSM, Inc. by form letter dated June 17, 1992 that the bid proposal had been taken apart and not been stapled back in the same order as when issued and that such errors or omissions could result in a future bid proposal being declared irregular. One of the items (Item 5) on this form letter states "the bidder's name is not as issued per their prequalification application on the front sheet (Bid Blank)". Item 5 was not checked or noted as a deficiency in the bid on the Gadsden County project along with the other noted problem because the name (VSM, Inc.) on the cover sheet had not been altered - it was the same as issued on the Certification. The Gadsden County project bids were posted on June 18, 1992 under the name "VSM,Inc." as irregular but with no reason stated for the irregularity and there is nothing in the minutes of the Department's Bid Review Committees indicating the reason for the irregularity. Again, the bid submitted by VSM of Florida, Inc. under cover of the bid blank issued to VSM, Inc. was not the low bid on the Gadsden County project. On May 27, 1992 VSM of Florida, Inc., under cover of a bid blank issued to VSM, Inc. by the Department submitted a bid on another Department project in Polk County, Job No. 16070-3501, the apparent low bid on the project and the bid in dispute here. The name of VSM, Inc. under which the bid blank was issued by the Department was not altered on the bid submitted by VSM of Florida, Inc. The bid as submitted by VSM of Florida, Inc. was signed by V. S. Monroe and G. B. Monroe as president and secretary, respectively of VSM of Florida, Inc. Although the bid did not contained written authorization from VSM, Inc. authorizing VSM of Florida, Inc. to submit the bid on behalf of VSM, Inc., there is sufficient evidence in the record to show that at the time of the bid submittal VSM, Inc. had knowledge of, consented to and authorized the bid submittal by VSM of Florida, Inc. Also, at the time of the bid submittal, VSM, Inc. and VSM of Florida, Inc. were under the impression (rightfully or wrongfully) that VSM, Inc. and VSM of Florida, Inc. had been previously prequalified jointly by the Department. By letter dated May 29, 1992, the Department advised VSM, Inc. that it needed to file a Disadvantaged Business Enterprise (DBE) affirmative action plan with the Department in order for its bid of May 27, 1992 to be considered responsive. The DBE plan was furnished by VSM of Florida, Inc. and approved by the Department. The Department also requested that VSM, Inc. submit a current capacity rating status so that the Department could determine if the current capacity of VSM, Inc. was such that it was still qualified to perform the work required by the Project. The current capacity rating status was filed by VSM of Florida, Inc. on June 3, 1992. On June 11, 1992, the Department's Technical Review Committee (TRC) recommended that the bid executed and submitted by VSM of Florida, Inc. under cover of the bid blank issued to VSM, Inc. be declared irregular based on the TRC's determination that VSM of Florida, Inc. was not a prequalified contractor. On June 16, 1992, the Department's Contract Awards Committee (CAC) unanimously adopted the recommendation of the TRC and declared the bid submitted under cover of the bid blank issued to VSM, Inc. to be irregular. The CAC voted to post an intent to award the bid on the Project to Leware. The Department rejected the bid submitted by VSM of Florida, Inc. under cover of the bid blank issued to VSM, Inc. on the basis that VSM of Florida, Inc. was not a prequalified contractor. The bid was rejected by the Department without any review of the Department's prequalification file of VSM, Inc., or without any review as to whether the irregularity could be cured by VSM, Inc. ratifying the action of VSM of Florida, Inc. by supplying the Department with written authorization for VSM of Florida, Inc. to submit the bid on behalf of VSM, Inc. There was no evidence that curing this irregularity would provide the Petitioner with such a competitive advantage that it would restrict or stifle competition or that curing this irregularity would violate any rule or statute. The intent to award the Project to Leware was posted on June 18, 1992. VSM, Inc., by and on behalf of its operating subsidiary, VSM of Florida, Inc., filed a timely initial protest to the intent fo award on June 23, 1992 and a timely formal protest on July 1, 1992.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, accordingly RECOMMENDED: That the Department enter a Final Order awarding the contract for the construction of the Project to the Petitioner upon VSM, Inc. curing the technical deficiency in the bid by submitting to the Department authorization for VSM of Florida, Inc. to have submitted the bid on the Project on behalf of VSM, Inc. DONE and ORDERED this 12th day of November, 1992, in Tallahassee, Florida. WILLIAM R. CAVE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of November, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NUMBER 92-4859BID The following constitutes my rulings pursuant to Section 120.59(2), Florida Statutes, on all of the proposed findings of fact submitted by the parties in this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner Proposed findings of fact 1 - 4, 6 and 8 - 11 are adopted in substance as modified in the Recommended Order. Proposed findings of fact 5 and 7 are adopted in substance as modified in the Recommended Order, but see Findings of Fact 41 relating to reliance. Proposed Findings of Fact Submitted by the Respondent Proposed findings of fact 1 - 42 and 44 are adopted in substance as modified in the Recommended Order. Proposed finding of fact 43 is rejected as not being a finding of fact but more of an argument as to the weight to be given certain evidence. Rulings on Proposed Findings of Fact Submitted by the Intervenor, Leware 1. Proposed findings of fact 1 - 35 are adopted in substance as modified in the Recommended Order. COPIES FURNISHED: Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0458 Thornton J. Williams, Esquire General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0458 Allen P. Clark, Esquire CAVEN, CLARK, RAY and TUCKER 3306 Independent Square Jacksonville, FL 32202 George M. Meros, Jr., Esquire 106 College Avenue Tallahassee, FL 32301 Carolyn Holifield, Esquire Paul Sexton, Esquire Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, FL 32399-0458 Mary M. Piccard, Esquire CUMMINGS LAWRENCE & VESIMA 1004 DeSoto Park Drive Tallahassee, FL 32302
Findings Of Fact In order to meet its need for new equipment in the new district administration building, the School Board advertised for competitive bid proposals for clerical, professional task, guest and conference chairs (task seating). Five bids were timely received by the School Board, two of which were determined to be responsive. The bid opening occurred on April 17 1990, and the Knoll Source was determined to be the lowest responsive bidder. In spite of this determination, the bid was rejected by the Director of Purchasing or the appointed designee because sales tax was not included in the bid. The Notice of Award was issued to Haworth, who submitted its bid showing the price it was willing to accept for the sale of the task seating, with and without sales tax. The initial decision to reject the Knoll Source bid, which was $10,393.72 less than Haworth in Sequence I; $12,231.94 less in Sequence II; and $994.17 less in Sequence III, was based upon Section 9.2.2.a in the "Instructions to Interior Bidders". This section of the bid documents provided that the contract for purchase of the task seating would not be exempt from sales tax. This bid specification is incorrect because the School Board does not pay sales tax on acquisitions of furnishings for the Pinellas County School System. Knoll Source was aware of the School Board's sales tax exemption prior to its bid submission. As Section 9.2.2.a of the instructions was inappropriate, the vendor relied on Section 9.2.2.c, and excluded sales tax from the bid because the cost of such tax was not applicable. Section 9.2.2.c instructed bidders to exclude inapplicable taxes from their bids. Pursuant to Section 5.3.1 of the bid instructions, the School Board has the right to waive any irregularity in any bid received and to accept the bid which, in the Board's judgment, is in its own best interest. The Knoll Source and Haworth bids can be comparatively reviewed, and Knoll Source is the lowest responsive bidder if the failure to include sales tax in the bid amount is waived by the School Board. It is in the Board's best interest to waive Knoll Source's failure to include a sales tax in the bid because sales tax does not apply to this purchase.
Findings Of Fact On or about December 29, 1981, the College solicited sealed bids for construction of alterations and additions to the Technical and Gymnasium Buildings located on its campus in Madison, Florida. In response, seven general contractors submitted bids. (P-1, P-2, P-3.) Bids were publicly opened on February 9, 1982. Griffin Construction, with a bid of $536,575, was the apparent low bidder; the second lowest bidder was Long Contractors, with a bid of $539,512. (Testimony of Griffin, Sims, Rutherford; P-3, P-4, P-5.) After the low bid was identified, Tom McClanahan, representing Long Contractors, asked that the subcontractor list accompanying the low bid be opened. Griffin Construction's subcontractor list was then opened. McClanahan asked if the license and charter numbers of the subcontractors were listed. 2/ Upon learning that these numbers were not included on Griffin Construction's subcontractor list, McClanahan protested. (Testimony of Sims, Rutherford, Griffin.) At its February 15, 1982, meeting, the College District Board of Trustees ("Board") rejected the low bid of Griffin Construction on the sole ground that the omission of subcontractor license and charter numbers constituted a failure to comply with the conditions of the bid documents. 3/ The Board then voted to award the contract to Long Contractors, the second lowest bidder, on the ground that it was the lowest bid conforming to the bid documents. In so doing, the Board followed the College president's recommendation--a recommendation based on his belief that the non-complying bid must be rejected, that it did not involve a matter of Board discretion. (Testimony of Sims, Rutherford, Griffin; Stipulation of Parties; P-41.) The bid specifications contain instructions to bidders requiring "each Bidder . . . [to] submit with his proposal a list of the subcontractors who will perform the work . . . as indicated by the `List of Subcontractors' form." (P-1, P-2.) The instructions further provide: The applicable subcontractor license registration or certification number must be noted on the bid opposite his name, and in the event that the subcontractor is a corporation, his State Corporate Charter number shall also be noted. If the subcontractor is an out of state firm, their Charter number with the Secretary of State to do business in the State of Florida should also be noted. The "Listing of Subcontractors" form provided with the specifications contains column headings for the names and addresses of the subcontractors but does not contain a separate heading for the requested license or corporate charter numbers. 4/ The form states that the subcontractor list "is an integral part of the bid." (P-1, P-2.) The bid instructions further require bidders to evaluate and determine the qualifications of their listed subcontractors. The bidder shall have determined to his own complete satisfaction that a listed subcontractor has been successfully engaged in this particular type of business for a reasonable length of time, has successfully completed installations comparable to that which is required by this agreement and is qualified both technically and financially to perform that pertinent phase of the work for which he is listed. (P-1, P-2.) The bid documents expressly reserve to the College the right "to reject any or all bids, and to waive informalities." (P-1 P-2.) No bidder correctly listed the required license and corporate charter numbers on its "Listing of Subcontractors" form. Griffin Construction. Griffin failed to include any license or corporate charter numbers. However, by subsequent letters dated February 9 and February 18, 1982, and at hearing, it supplied the required subcontractor license and charter numbers. Long Contractors. Long listed for its roofing subcontractor a sheet metal registration number, not the required roofing license number. [A sheet metal registration does not qualify a contractor for roofing work. See, 489.105, 489.113, Fla. Stat. (1981).] For its electrical subcontractor, Long omitted the prefix, "ER" from the listed number. For its plumbing subcontractor, Long listed a mechanical registration number instead of the required plumbing certification or registration number. [A mechanical registration does not qualify a contractor to perform plumbing work. See, 489.105, 489.113, supra.] Of the four areas requiring state licenses--roofing, heating and air conditioning, electrical, and plumbing--Long listed correctly only the registration number for its heating and air conditioning subcontractor. Long incorrectly listed No. FO6962 as the corporate number of Gandy Enterprises, its painting subcontractor. This is the number of a related corporation, Industrial Coatings, Inc. Remaining Bidders. Of the five other general contractors submitting bids, two-- Richard Walker Construction Company and GRC Contracting, Inc.--omitted all subcontractor license and charter numbers. The other three bidders failed to completely list all the required numbers. (Testimony of Rutherford; P-11, P-12, P-13, P-14, P-15, P-16, P-17, P-34, P-37, R-1, R-5.) The project architect testified that the submittal of incorrect or incomplete subcontractor license and charter numbers was a deficiency which a bidder should be allowed to cure after bid opening. But the failure to submit any required "number" was a deficiency which, in his opinion, could not be similarly corrected. He failed, however, to supply a reasonable basis for drawing such a distinction. Therefore, his opinion on this question is given little weight. 5/ (Testimony of Rutherford.) Subcontractor license and charter numbers are readily obtainable and can be verified by contacting the pertinent state agency--the Florida Department of Professional Regulation, Construction Industry Licensing Board, or the Florida Department of State. (Testimony of Griffin, Rutherford; P-32, P-33, P- 34, P-35, P-36, P-37.) The project architect, William Rutherford, routinely requires the listing of subcontractor license and charter numbers on bids for public construction projects. The main purpose it serves is that it would enable him to identify the listed contractor, since sometimes subcontractors have similar business names. Although if he was uncertain about the qualifications of a subcontractor, he would ordinarily question the general contractor. (Testimony of Rutherford.) Although Mr. Rutherford has customarily required the listing of subcontractor "numbers" on public projects, he has never made any use of those numbers in the past. (Testimony of Rutherford.) The general contractor who is awarded the contract is responsible to Mr. Rutherford and the College for construction of the project in accordance with the bid specifications. If, after bid opening, a listed subcontractor is unable to perform, Mr. Rutherford would ordinarily arrange for substitution of a new subcontractor acceptable to the general contractor and owner. (Testimony of Rutherford.) Griffin Construction's failure to list the license and charter numbers of its listed subcontractors, and its subsequent curing of that failure, did not affect the amount of its bid 6/ by giving it an advantage or benefit not enjoyed by other bidders. The bid omission did not allow Griffin Construction the opportunity to change any material element of its bid after bid opening. The inclusion or exclusion of subcontractor "numbers" at bid opening does not affect the ability of a contractors to obtain the required bond, the quality of bidding general contractors, the quality of listed subcontractors, the quality of work performed, or any material feature of the competitive bidding process. (Testimony of Griffin, Rutherford.)
Recommendation Based on the foregoing, it is RECOMMENDED: That the construction contract in question be awarded to Vick Griffin Construction Company, the lowest responsible bidder. DONE AND RECOMMENDED this 29th day of April, 1982, in Tallahassee, Florida. R. L. CALEEN, JR. Hearing Officer Division of Administrative Hearings 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of April, 1982.
The Issue The Department of Corrections sought bids for construction of a health services building for a correctional facility. A discrepancy existed between the written specifications and the architectural drawings for the project. An addendum was issued to clarify the matter. The low bidder (Intervenor) did not acknowledge receipt of the addendum until several hours after the opening of bids. The Department accepted the Intervenor's bid. The Petitioner timely protested the action. The issue in this case is whether, in accepting the Intervenor's bid, the Department acted contrary to the requirements of law.
Findings Of Fact On July 31, 1990, the Department of Corrections (hereinafter "Department") issued an Invitation To Bid ("ITB") for PR-35-JRA, Project #90015, consisting of the construction of a Health Classification Building at the Columbia County Correctional Institution. In relevant part, the ITB requested price proposals for said construction, provided that the bid would be awarded to the responsive bidder submitting the lowest cost proposal, provided that "in the interest" of the Department, "any informality" in bids could be waived, and provided space on the bid form for acknowledgment of receipt of all addenda to the ITB. Bids were to be filed no later than 2:00 p.m. on September 11, 1990, the time scheduled for bid opening. Documents issued with the ITB included architectural drawings and written specifications for the building. The architectural firm of Jim Roberson and Associates, (hereinafter "JRA") had been employed by the Department to prepare the drawings and specifications. JRA was responsible for preparation and distribution of related addenda. Further, a JRA representative presided over the opening of bids on behalf of the Department. Following release of the ITB and supporting documents, JRA became aware of a conflict between sink faucets required by the drawings and those required by the written specifications. The specifications provided that sink faucets operated by hand levers or foot pedals were to be installed in the facility. The architectural drawings JRA indicated that sink faucets were to operate by means of "electric-eye" activators, rather than by hand levers or foot pedals. On September 10, 1990, JRA issued an addendum (identified as Addendum #2) 1/ to clarify that "electric-eye" type operators were to be included in the bids. The addendum was sent by telephone facsimile machine to all anticipated bidders. In part the addendum provides as follows: "This Addendum forms a part of the Contract Documents and modifies the original Specifications and Drawings, dated 31 July 1990, as noted below. Acknowledge receipt of this Addendum in the space provided on the Bid Form. Failure to do so may subject the Bidder to Disqualification." On September 11, 1990, the eight bids submitted in response to the ITB were opened by the JRA representative. The Intervenor, Custom Construction (hereinafter "Custom"), submitted the lowest bid at $898,898. The Petitioner, David Nixon (hereinafter "Nixon"), submitted the next lowest bid at $900,000. The bid form provided by the Department as part of the ITB materials to prospective bidders provided space for acknowledgment of addenda to the ITB documents. Upon opening the bid submitted by Custom, the JRA representative officiating at the opening noted that the Custom bid failed to acknowledge Addendum #2 in the appropriate space on the bid form. 2/ Robert L. Harris, president of Custom Construction, attended the bid opening. When the JRA representative noted the lack of acknowledgment of Addendum #2, Mr. Harris stated that he was unaware of the addendum. At hearing, Mr. Harris testified that his secretary told him that Addendum #2 was not received by his office. The JRA representative testified that his review of JRA's FAX transmission records indicated that the FAXed Addendum #2 was received by all bidders. The greater weight of the evidence establishes that Addendum #2 was transmitted to and received by, all bidders. Upon leaving the bid opening, Mr. Harris immediately contacted his plumbing subcontractor, Jerry Stratyon, and discussed the situation. Approximately two hours after the bid opening, and after talking with Mr. Stratton, Mr. Harris notified JRA, in a letter transmitted by FAX machine to JRA, that his bid price did include plumbing fixtures required by Addendum #2. Mr. Harris concluded the letter, "[w]hen can we start work. I know you don't want the alternate." On October 8, 1990, JRA recommended to the Department, that the Custom bid be accepted. The letter of recommendation, in part, provides: The apparent low bidder however, did not verify receipt of Addendum No. 2 on the Bid Proposal. Our office did receive a, facsimile after the bid verifying Addendum NO. 2 receipt from the Contractor's Office." However, the actual letter from Custom to JRA states, not that Addendum #2 was received, but that it was included in the price bid by Custom's plumbing subcontractor. Both Nixon and Custom obtained plumbing bids from the same subcontractor, Jerry Stratton. The cost increase attendant to the requirements of Addendum #2 is approximately $2,400 over the plumbing fixtures indicated in the written project specifications. Mr. Stratton was aware of Addendum #2 and testified that the requirements of Addendum #2 were reflected in his price quotes to both bidders. Mr. Stratton provided the same price bid to Nixon and Custom. Mr. Stratton also provided bids to Nixon and Custom for HVAC work. Mr. Stratton was accepted as Custom's HVAC subcontractor. Nixon's bid indicates that another HVAC subcontractor will perform the cork should Nixon receive the contract. The ITB provided that bid modification or withdrawal was permitted on written or telegraphic request received from a bidder prior to the time fixed for opening. Mr. Harris did not attempt to either withdraw or modify Custom's bid prior to bid opening. No bid modification was permitted subsequent to the bid opening. The Department's policy is to waive minor irregularities when to do so would be in the best interests of the State and would not be unfair to other bidders. The evidence does not establish that Custom Construction's failure to acknowledge the addendum was purposefully designed to permit withdrawal of their bid subsequent to the public bid opening. The omission of acknowledgment of Addendum #2 provided Custom an opportunity to withdraw the bid that was not available to other bidders. Custom could have informed the Department that the bid price did not include the requirements of Addendum #2, and the bid could have been withdrawn. Custom was therefore provided with a substantial advantage or benefit not enjoyed by the other bidders. The other bidders, all of whom acknowledged receipt of Addendum #2, had no opportunity to, and would not have been permitted to, withdraw their aids. The fact that Custom did not withdraw the bid is irrelevant.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Corrections enter a Final Order rejecting the bid submitted by Intervenor as nonresponsive and awarding the contract to the Petitioner. DONE and RECOMMENDED this 15th day of January, 1991, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of January, 1991.
The Issue This case concerns a challenge to the validity of Rules 13A-1.001(12), 13A- 1.002(1)(b) and 13A-1.002(3) , Florida Administrative Code, pursuant to Section 120.56, Florida Statutes.
Findings Of Fact In the fall of 1988, the State of Florida, Department of Transportation (DOT) put out a Request for Proposals (RFP) as RFP-DOT-88-0l. Through this RFP the agency sought to acquire a new barrier and ticket toll collection system which would automate the toll collection operations and retrieval of audit data, having in mind increased reliability and performance. The project is principally one which envisions the purchase of commodities. It has an associated service component. Section 287.062(1)(e), Florida Statutes together with Section 287.073(3), Florida Statutes, established the basic authority for the award of RFP-DOT-88-01. The agency received responses in March, 1989, from three companies. The offerors were Petitioner and Intervenor and one other concern. The other company was AGS Informations, Inc. (AGS). Following evaluation DOT determined on May 18, 1989 to reject the Intervenor's proposal as nonresponsive. This rejection was followed by the Intervenor's notice of protest on Nay 25, 1989. A formal written protest was made on June 6, 1989. On July 31, 1989, Intervenor filed a notice of voluntarily dismissal of the formal written protest. This was addressed by the DOT final order of August 2, 1989 which dismissed the formal written protest. On November 21, 1989, DOT posted its intent to award a contract to Petitioner. This statement of intent to award was met by a notice of protest filed by Intervenor on November 27, 1989, followed by a formal written protest on December 6, 1989. The case was sent to the Division of Administrative Hearings for consideration and through response to a motion to dismiss the Hearing Officer in that case, DOAH Case NO. 89-6926B1D, entered a recommended order of dismissal. On January 22, 1990 DOT entered a final order dismissing Intervenor's petition and stating its intent to award the contract to Petitioner. An amendment to the January 22, 1990 order was made on February 21, 1990 reminding all concerned that the contract award was subject to review and approval by the Governor and Cabinet sitting as the State of Florida, Department of General Services to decide the propriety of the subject purchase which was an information technology resources purchase under Section 287.073, Florida Statutes. On February 21, 1990, DOT sent notice to the three offerors that it was rejecting all proposals submitted. As described in the notice of agency decision, DOT was operating on the basis that a further review of the proposals revealed that the proposals by AGS and Intervenor were nonresponsive. It went on to say that to have competitive offerors there must be two or more offers submitted by responsive and qualified offerors. In this instance DOT felt that it did not have two acceptable proposals and did not have a competitive offer. Because the commodities sought were available from more than one source, it had decided to withdraw its notice of intent to award which was contingent upon the approval of the Governor and Cabinet. On February 27, 1990, Petitioner gave a notice of protest of the DOT decision to reject all bids. This was followed by a formal written protest on March 9, 1990. Although the decision to reject all proposals was not opposed by Intervenor, the motion by the Intervenor to intervene in DOAH Case No. 90- 1583BID was granted allowing limited participation in support of the DOT decision to reject all proposals. That outcome tended to create the opportunity for Intervenor to participate in any re-advertisement for proposals. As revealed in the final hearing in DOAH Case No. 90-1583BID, DOT utilizes Chapter 13A, Florida Administrative Code, in the procurement process. Intervenor participated in the final hearing in DOAH Case NO. 90- 1583BID. The DOT decision to reject all proposals in which reliance upon the rules under challenge are perceived to support that decision has an adverse impact on Petitioner. By that arrangement Petitioner loses the opportunity for the contract. Additionally, it is placed in a disadvantaged position in that the particulars of its method of responding to the RFP have been revealed and are now known to the competitors who might be expected to utilize that information in a setting where a re-advertisement takes place. Under the circumstances, Petitioner filed its challenge to the existing rule on March 28, 1990. Intervenor sought the opportunity to intervene in this case on April 4, 1990, and that opportunity was granted on April 6, 1990. Intervenor intends to participate in any re-advertisements of the RFP. In his testimony at hearing William Monroe, Director of the Division of Purchasing for Respondent, established that in governmental purchasing the terms "offers" and "proposals" are synonymous. This opinion is accepted. Mr. Monroe also established that Respondent believed that it was implementing Section 287.012(15), Florida Statutes, when promulgating Rule 13A- 1.001(12), Florida Administrative Code. Through the promulgation of Rules 13A- 1.002(1)(b), and 13A-1.002(3), Florida Administrative Code, Respondent believed that it was implementing Section 287.062, Florida Statutes. Respondent interprets Section 287.062, Florida Statutes, to require an agency making a commodity purchase to use competitive sealed proposals in instances where invitations to bid are not used. Mr. Monroe in speaking for Respondent indicated that this interpretation gained support from the language set out in Section 287.001, Florida Statutes. According to Mr. Monroe the circumstance in which less than two responsive and qualified offerors respond to an RFP is one in which the procuring agency must reject all proposals or seek the approval from Respondent to negotiate with the one responsive offeror or where no responsive offerors were received to negotiate with someone whom the agency has chosen. Likewise, a sole source purchase negotiation must be approved by Respondent. Mr. Monroe's testimony, in speaking for Respondent, indicates that Respondent interprets the terminology within Section 287.062(2), Florida Statutes, "no competitive" to modify the words "bids" and "proposals." Thus, it is incumbent upon an agency to receive authority to negotiate in those instances where it receives less than two proposals submitted by responsive and qualified offerors who are responding to a RFP in acquiring commodities.
Findings Of Fact On March 1, 1984, Respondent gave notice to qualified contractors that it would receive sealed bids for State Project No. 72000-3541, referred to as Federal-Aid Project No. M 9041(10). This project involves the installation of a computerized traffic control system for the City of Jacksonville. In response to the opportunity to bid, the Department of Transportation received four bids. Petitioner, Winko-Matic Signal Company, was among the bidders. The other bidders were Georgia Electric Company, Traffic Control Devices, Inc., and Sperry Systems Management. The bids of Traffic Control Devices and Sperry Systems were rejected based upon an error in bid tabulations on the part of Traffic Control, a mistake on the quantities page, with the Sperry rejection being based upon a bid bond problem. Traffic Control had been the apparent low bidder with a bid of $1,964,115. Winko-Matic was the second apparent low bidder with a bid of $2,279,604.70. The Department of Transportation had estimated that the total cost of the Jacksonville project would be $ 2,024,680.61. Having discarded the bid of Traffic Control Devices, the Department of Transportation telegrammed Winko-Matic on April 4, 1984, advising Winko-Matic that it was the apparent low bidder for the Jacksonville project. Subsequently, the awards committee of the Department of Transportation met on April 18, 1984, and determined to reject all bids and re-advertise the job. In the course of this meeting the awards committee was told that there were erratic bids received on contract items, pointing to some perceived confusion among the contractors as to requirements of the contract. Discussion was also held on the possibility of establishing a pre-bid conference if the project was re advertised. The awards committee then voted to reject the bids on the basis that the apparent low bidder, Winko-Matic, had submitted a bid which-was 12.6 percent over the Department's estimate, instead of being within 7 percent of the Department of Transportation's pre-bid estimate, a point above which the Department of Transportation in its non-rule policy would call to question to the acceptability of the apparent low bid. In addition to deciding to reject all bids and re-advertise, it was determined that a pre-bid conference should be scheduled at least 30 days prior to the bid-letting date. Winko-Matic was advised that the Department of Transportation's decision to reject all bids by correspondence of May 4, 1984, in which it was indicated that all bids had been rejected based upon the fact that they were too high. In response to this notice of rejection, Winko-Matic, effective May 17, 1984, filed a written notice of protest. The case was subsequently referred to the Division of Administrative Hearings on June 20, 1984, and a final hearing date was established by Notice of Hearing of July 5, 1984. The hearing date in this cause was September 12, 1984. The Jacksonville project in question requires the utilization of what has been referred to "UTCS Enhanced" software. This software package is unique and has only been used in a limited number of locations within the country. Those locations are Los Angeles, California; San Diego, California; Broward County, Florida; and Birmingham, Alabama. Another unique feature within the project design is the use of an associated coaxial computer sys gem. Given the unique nature of this project and the fact that the Department of Transportation had never advertised for bids related to UTCS software, Department of Transportation obtained assistance from a consulting firm, Harland, Bartholomew & Associates. In fulfilling its function Harland gave estimates to include an estimate related to the projected cost of the software, Item 681-102. The Harland estimate for the overall project was $2,143,130 including a $100,000 estimate for the software system. That estimate relating to the software was subsequently adjusted by the Department of Transportation to depict a cost of $13,780. The Department of Transportation estimate was based upon information within its computer related to a system unlike the enhanced software contemplated by the plans and specifications. In other words, the stored information in the Department of Transportation computer was not the same as contemplated by the plans and specifications in the Jacksonville project. Moreover, the initial estimate of Harland was based upon the idea of an extended software system, as opposed to an enhanced software system. Winko-Matic had bid $389,500 for the software in Item 681-102. That estimate was premised upon figures obtained from JHK and Associates, the group which Winko-Matic intended to use as its subcontractor for the enhanced software portion of the project. JHK developed the software and was responsible for systems integration of the Los Angeles, California, project, one of the locations in which UTCS enhanced software has been utilized. JHK premised its estimate for the software hare upon experience in Los Angeles and an evaluation of the tasks to be performed related to the enhanced software. This included general software development activities, hardware innovation, installation costs during the period of acceptance and testing, and the preparation of data base. The JHK bid price was $339,500. Another $50,000 was added to that price related to what the Petitioner describes as its management costs for that item. By June 20, 1984, when a further meeting was held by the awards committee on the subject of the Jacksonville project, it was concluded that the estimate made by the Department of Transportation of $13,780 was not correct, on the topic of the enhanced software. A more reasonable estimate, according to the information imparted in this session, would be $200,000 for enhanced software as called for in this project, with a $100,000 amount being a reasonable estimate had they chosen to use extended software. Adjusting the initial price related to the UTCS enhanced software to reflect a corrected estimate of the Department of Transportation in its original advertised bid, that estimate becomes $2,210,900.61 and its consultant Harland's estimate becomes $2,243,130. With this adjustment, the differential in the estimate made by the Department of Transportation and the Petitioner approaches 3 percent and not the 12.6 percent originally found. The 3 percent is below the threshold of 7 percent used as the policy for determining whether a bid might be rejected as being far beyond the acceptable limits set forth in the Department of Transportation's estimate. In the aforementioned June 20, 1984, awards committee meeting, the Department of Transportation continued to hold the opinion that all bids in the Jacksonville project should be rejected and the matter re-advertised. Although the problem pertaining to the estimate of the cost of the enhanced software package had been addressed, the committee continued to feel that the prices received in the bid letting were erratic Reference was also made to revisions or modifications to the project plan which would be offered if the matter were re- advertised. It was also pointed out that the Federal Highway Administration would concur in the Department's decision to reject all bids and would accept modifications. The awards committee again voted to reject the bids. The matter was again considered by the awards committee on August 31, 1984. On that occasion, it was pointed out that the revisions contemplated by the Department of Transportation, should the matter be re-advertised, would not affect in a substantial way the cost estimate for the project with the exception of Item 680-101, the system control equipment (CPU), which would promote a lower price for the project. The committee determined in the August, 1984, meeting to reject all bids and re-advertise. While the initial notice of rejection of May 4, 1984, had suggested the basis for rejection as being the fact that Petitioner's bid far exceeded the 7 percent allowance for price above the Department of Transportation's estimate of costs, the meetings of the awards committee and the suggestion of the Respondent in the course of the final hearing in this case indicated that there were other reasons for the decision to reject. Those Were: (a) an apparent lack of clarity among bidders regarding specifications for the Jacksonville job, (b) the desire of the Respondent to revise specifications on the Jacksonville project; and (c) a lack of sufficient competition in the bids. In connection with the first of the additional reasons Respondent suggests that variations within the bid responses related to particular line items within the specifications point out a lack of clarity in the project's specifications or confusion by bidders related to those specifications. Respondent did not bring forth any of the bidders who might speak to the matter of possible confusion or misunderstanding concerning some of the bid items. By contrast, the Petitioner's president; the president of JHK & Associates and James Robinson, Harland's project manager for the Jacksonville job, did not find the specifications in the original documents to be confusing. In addition, the testimony of those individuals established the fact that bid variations related to particular line items are not extraordinary and do not establish any apparent confusion by the bidders as to the requirements of those line items. In effect, what the differentials demonstrate are variations related to the manufacture or in-house capabilities of the bidders and an effort to allocate discretionary costs in various places as to line items. Moreover, they might indicate last- minute adjustments in the bid quote prior to the opening and a possible effort by a contractor to enter into a new job market. Finally, they demonstrate offsetting which is the allocation of item prices by a contractor to maximize profits. To do this, a contractor submits high bids on items representing quantities which the contractor feels will increase after the contract is awarded and submits low bids on items representing quantities which are not likely to change. In summary, while the Department of Transportation in its presentation expressed some concern about the variations in the pricing in the bid quotations offered by the respective bidders in this project, its suspicions on the question of the possible clarity of its specifications were not confirmed and are not convincing. On the topic of revisions which the Department of Transportation would offer if the matter were re-advertised, with one exception those matters appear to be items that could be attended through change orders or supplemental agreements. They are not matters which necessarily must be addressed through a rejection of all bids and a re-advertising of the project. The lone exception to this is the possibility that the Department of Transportation may not be able to protect its proprietary rights in the enhanced software which is being developed for the project, under the terms of the present bid documents. Given that uncertainty, the Respondent would wish to re-advertise the project and make certain that its proprietary interests are protected. Finally, Respondent has alluded to the fact that the Jacksonville project should be re-advertised in view of the lack of competition in the initial letting. Only four bidders expressed an interest in this project at the time of the first letting. Of those, two bidders were found to be responsive. While this is a low number of bidders, there does not appear to be any agency practice on the part of' the Department of Transportation to the effect that this number of bidders would not be accepted. Moreover, no indication has been given that should the matter be re-advertised a greater number of bidders would express an interest than was the case in the first letting. Consequently, this reason for bid rejection is not acceptable. If Respondent did not reject the bids and re-advertise the project, Winko-Matic would be the successful bidder in the Jacksonville project.
The Issue The issue in this case is whether the bid of Corporate Interiors, Inc. (Petitioner) is the lowest responsive bid which was received by the Pinellas County School Board (Petitioner) for stacking polypropylene and upholstered chairs for the New District Administration Building.
Findings Of Fact On or about February 27, 1990, the Respondent sought competitive bids for stacking polypropylene and upholstered chairs for the New District Administration Building. In response thereto, Respondent timely received four bids, two of which were determined to be responsive. The bid opening occurred on April 17, 1990, and Petitioner was determined to have submitted the lowest bid. However, the Petitioner's bid did not include an amount for sales tax, and on that basis alone, the Respondent indicated its intent to award this contract to another responsible bidders. There is no dispute that the Respondent does not pay sales tax on transactions involving the acquisition of furnishings for the Pinellas County School System. Nevertheless, Section 9.2.2 of the bid specifications erroneously stated that this contract would not be exempt from sales tax. The Respondent admitted at hearing that under Section 5.3.1 of its bid instructions, it should hake waived the Petitioner's failure to include sales tax in the bib amount since this is inapplicable to this acquisition. The Respondent, in effect, concedes error in its previous notice of intent to award this contract to another bidder, and does not contest the Petitioner's claim that it submitted the lowest responsive bid for stacking chairs.
Recommendation Based on the foregoing, it is recommended that the Respondent enter a Final Order awarding the contract for stacking chairs for the New District Administration Building to Petitioner. DONE AND ENTERED this 8th day of June, 1990, in Tallahassee, Leon County, Florida. DONALD D. CONN Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of June, 1990. APPENDIX DOAH CASE NO. 90-2982 BID Petitioner filed a letter, but no proposed findings of fact upon which a ruling could be made. Rulings on Respondent's Proposed Findings of Fact: Adopted in Finding 1. Adopted in Finding 3. Adopted in Finding 1. 4-6. Adopted in part in Finding 2, but otherwise Rejected as unnecessary. Adopted in Finding 3. Adopted in part in Finding 2, but otherwise Rejected as unnecessary. COPIES FURNISHED: Allen D. Zimmerman, President Corporate Interiors, Inc. 1090 Kapp Drive Clearwater, FL 34625 Bruce P. Taylor, Esquire P. O. Box 4688 Clearwater, FL 34618-4688 Dr. Scott N. Rose Superintendent P. O. Box 4688 Clearwater, FL 34618
Findings Of Fact Background The procurement of private legal services by the Department for child support enforcement is exempt from the competitive bidding requirements set forth in Chapter 287, Florida Statutes. In July 1992, the Department published notice that it was soliciting proposals from interested attorneys to provide intrastate and interstate child support legal services in HRS District VI, including Hillsborough, Hardee, Highlands, and Polk Counties. These services were to be provided from October 1, 1992, through June 30, 1993. Separate proposals were solicited for each of the following: the Hillsborough County Interstate Contract, the Hillsborough Intrastate Contract, the Polk County Contract, and the contract for Hardee and Highland Counties. The solicitation package does not incorporate any of the Florida Statutes or the agency's own rules regarding solicitation and award procedures in competitive bidding situations. Instead, the solicitation purports to be a self contained package of reasonably definite specifications with its own evaluation criteria and award procedures. The Petitioners in all four of the consolidated cases timely filed written protests which challenge the contents and requirements of the package. Evaluation Criteria In addition to the evaluation criteria contained in the solicitation package, the Department adopted and distributed to its employees additional criteria to be used in evaluating the proposals submitted. The additional criteria are set forth in the following documents which were entered into evidence as Belveal Exhibit No. 7: Work Sheet for Evaluating Criteria and Determining Relative Value to be Applied to Technical Information, Evaluation Criteria, Scoring Matrix for Structured Interview of Offerers, Work sheet for Scoring Oral Interview, and Questions for Use at Interview. The additional criteria set forth in these documents were intended for use to award points in the evaluation of offers, and to make the award of the contracts. They were not revealed to potential offerers. Such a procedure affords opportunities for favoritism, whether or not any favoritism is actually practiced by the Department. Once the representation is made in a solicitation package that it contains the evaluation criteria, the offerers should not be subjected to an additional evaluation process. Anne Donovan, Assistant Secretary of the Department of Health and Rehabilitative Services, admitted during hearing that the additional criteria which was not included in the solicitation package are intentionally biased to give existing legal services contractors an advantage in obtaining renewal of their contracts. This is contrary to the representation made in the solicitation package which states, "Through this solicitation for offers to provide legal services, the department seeks to obtain the highest possible standard of legal representation... while ensuring free and open competition among prospective offerers." Specifications The proposed contract to be executed at the conclusion of the bid solicitation and contract award process was to provide for compensation to the contractor based on (a) the number of cases referred to the contractor during the contract term, and (b) the number of final orders obtained by the contractor in these cases referred for action. The solicitation package contains a document identified as Attachment VI, which sets fort numbers purporting to be the Department's estimates of the number and type of cases which would be referred to the successful bidder during the course of each of the contracts, the number of payable orders to be expected, and the maximum fees which would be paid for each type of order obtained pursuant to the contract. Separate estimates have been given for the following contracts: Hillsborough County Intrastate, Hillsborough County Interstate, Polk County, and Hardee and Highlands Counties. The actual numbers set forth in each of the four separate contract proposals were estimates made by the field office staff of the Department and compiled by the headquarters office. Rosemary O'Neil, the contract manager in District VI, estimated the number of functions for each of the four contracts in District VI. In identifying the direct cost amount for each individual contract, she used automated and manual statistics or the tracking of functional activities for the past year. During the preparation of her projections, Ms. O'Neil tracked only nine activities, as originally required by the Department. Later, she was required to break these down into twenty-two functions, which may have adversely affected the estimates. Ms. O'Neil and other Department personnel testified that the estimates for District VI might be too low based upon past estimates and current needs. Ms. O'Neil completed the estimates in good faith and in accordance with the Department's stated requirements. Attachment VI also contains a fee schedule based upon a functional cost survey devised and carried out by the Department between April 15, 1991 and March 31, 1992. The survey randomly selected 3,800 cases throughout the state for tracking to determine the average cost the Department paid over the stated time period for each legal activity represented in the survey. During the survey, only 2,100 of these cases were actually tracked. In October 1992, the functional cost survey was changed to include 22 instead of 10 categories of legal service activity. The implementation of the survey was faulty in that different districts tracked attorney time and paralegal time in different ways. In addition, the administrative procedures utilized by judges and hearing officers in different districts directly affected statistics in ways which were not contemplated in the survey. Without uniform procedures, the legal services performed and attorney fees charged in different counties cannot be effectively reviewed on a comparable basis to create a true average cost per function. Many of the fees allocated to different functions in the specifications were illogical. For example: Fees paid for stipulated matters were, in many cases, higher than the fees paid for contested matters of the same type. Fees paid for simple matters, such as contempt hearings, were substantially the same as fees paid for more complex litigation involving the establishment of paternity and support. Certain orders obtained by the attorney, such as bankruptcy matters, required the expenditure of time by the contractor, but did not pay any fee. The functional cost survey used to establish the terms in the solicitations for estimated number of cases, types of cases and the maximum fees to be paid is defective as it relates to District VI. Proposals cannot be comparatively reviewed because the data upon which the proposals are created is inaccurate. After the contract award, it is reasonably anticipated that the Department would be required to make modifications to the contract which would afford opportunities for favoritism.
Recommendation Based upon the foregoing, it is RECOMMENDED: The previously undisclosed evaluation criteria should be included in the solicitation package if the Department intends to use them in the evaluation process. The current specifications on the projected number of cases to be referred in each contract in District VI should be revised to more reasonably and accurately reflect potential referrals within the District. The designated attorney fee for each function should be revised so that the charges are reasonably related to the work expected by the specifications in the proposal. The contents of the functional cost survey should be reevaluated based upon the evidence presented during the protest proceedings. The current specifications should be rejected as they are so flawed as to be arbitrary, in violation of state standards regarding the competitive bidding process. DONE and ENTERED this 22nd day of December, 1992. VERONICAL E. DONNELLY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of December, 1992. APPENDIX Petitioner Carlton's proposed findings of fact are addressed as follows: Accepted. Accepted. See HO No. 1. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 5 Accepted. See HO No. 7 Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected. Irrelevant. Rejected. Irrelevant. Accepted. See HO No. 16. Accepted. See HO No. 19. Accepted. See HO No. 17. Accepted. See HO No. 18. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 20 - No. 21. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected. Contrary to fact. See HO No. 21. Accepted. See HO No. 21. Accepted. Accepted. See HO No. 12. Accepted. See HO No. 12. Accepted. See HO No. 15. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected. Contrary to fact. See HO No. 22. Accepted. Accepted. Accepted. Accepted. - 81. Rejected. Without jurisdiction to determine. 82. - 87. Rejected. Beyond the jurisdiction of the Hearing Officer under the Grove-Watkins review standards. 88. - 100. Rejected. Beyond the jurisdiction of the Hearing Officer. Petitioner Redman's proposed findings of fact are addressed as follows: Accepted. Accepted. See HO No. 1. Accepted. Accepted. Accepted. Rejected. Contrary to fact. See HO No. 3. Accepted. Accepted. Accepted. Accepted. See HO No. 7. Accepted. Accepted. See HO No. 8 - No. 9. Accepted. See HO No. 16. Accepted. Accepted. Accepted. Accepted. Rejected. Irrelevant. Rejected. Irrelevant. Accepted. Accepted. See HO No. 20 and No. 22. Accepted. Accepted. See HO No. 17. Accepted. See HO No. 18. Accepted. See HO No. 16. Accepted. Accepted. Accepted. Accepted. See HO No. 19. Accepted. Accepted. Accepted. Accepted. Rejected. Irrelevant. Accepted. Accepted. See HO No. 20. The word "misleading" should be replaced by the "faulty". Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 20 and No. 22. Accepted. Rejected. Speculative. Accepted. See HO No. 21. Accepted. See HO No. 21. Accepted. See HO No. 21. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 22. Accepted. See HO No. 21. Accepted. See HO No. 21. Accepted. Accepted. See HO No. 21. Accepted. See HO No. 21. Accepted. See HO No. 21. Rejected, except for the determination that the specifications are arbitrary. All other allegations were not proved at hearing. Accepted. See HO No. 11. Accepted. See HO No. 12. Rejected. Contrary to fact. See HO No. 13. Accepted. See HO No. 13. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 13. Accepted. See HO No. 13. Accepted. Accepted. - 105. Rejected. Beyond the hearing officer's jurisdiction. Accepted. Rejected. Contrary to findings, except the determination that the specifications were arbitrary and unreliable. Rejected. Beyond subject matter jurisdiction. Rejected. Competency not determined. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 20. Rejected. Contrary to fact. Accepted. Rejected. Contrary to fact. - 128. Rejected. Beyond subject matter jurisdiction. Petitioner Belveal's proposed findings of fact are addressed as follows: Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 1. Accepted. Accepted. Accepted. Accepted. See HO No. 2. Accepted. Accepted. See Preliminary Statement & HO No. 4. Accepted. See HO No. 11. Accepted. See HO No. 3. Accepted. Accepted. See HO No. 5. Accepted. See HO No. 5 - No. 6. Accepted. See HO No. 7. Accepted. See HO No. 10. Accepted. See HO No. 12. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 16. Accepted. Rejected. Irrelevant. Accepted. See HO No. 21. Accepted. Accepted. Accepted. Accepted. Accepted. See HO No. 21. Accepted. Accepted. See Preliminary Statement. COPIES FURNISHED: CHARLES L CARLTON ESQ 2120 LAKELAND HILLS BLVD LAKELAND FL 33805 CECELIA M REDMAN ESQ 2124 W KENNEDY BLVD - STE B TAMPA FL 33606 DONALD W BELVEAL ESQ 100 W KENNEDY BLVD - STE 600 TAMPA FL 33602 JACK EMORY FARLEY ESQ HRS DISTRICT VI LEGAL OFFICE 4000 W DR MARTIN LUTHER KING JR BLVD TAMPA FL 33614 JOHN DAVIS ESQ 1170 NE CAPITAL CIRCLE TALLAHASSEE FL 32308 JOHN SLYE ESQ GENERAL COUNSEL DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES 1323 WINEWOOD BLVD TALLAHASSEE FL 32399 0700
The Issue Whether Respondent has reason to reject the bids submitted by Petitioner to provide landscape maintenance services at two schools (item number 3 and item number 43 of the Invitation To Bid numbered SB 96C-56Z) based on Petitioner's performance of similar contracts in prior years.
Findings Of Fact On June 15, 1995, Respondent issued its Invitation To Bid number SB 96C-56Z (ITB) for landscape maintenance services to be rendered at various schools in the Palm Beach County district school system. Item 3 of the ITB was for landscape maintenance services at Bears Lake Middle School and item number 43 was for landscape maintenance services at Santaluces High School. The contracts for the various schools are awarded for a term of one year through the bid process, with the contract for the subject ITB to be for a term beginning July 21, 1995, and ending July 20, 1996. Similar ITBs for similar services have been issued by Respondent for each prior year that is pertinent to this proceeding. After the bids were opened, it appeared that Petitioner was the low bidder for items 3 and 43. Respondent rejected the bids of Petitioner for these two items and asserted, based on Petitioner's prior performance of similar contracts, that it would not be in the best interest of the School District to award items 3 and 43 to Petitioner. Petitioner thereafter timely protested the bid process for items 3 and 43, the matter was referred to the Division of Administrative Hearings, and this proceeding followed. The award of contracts by the Respondent for items 3 and 43 has been halted pending resolution of this proceeding. Petitioner has been in the landscape business for approximately ten years. For a number of years, Petitioner has been awarded contracts following an invitation to bid similar to the one at issue in this proceeding. The number of schools awarded to Petitioner has varied from "a few" to 22 in one year. Petitioner was awarded contracts for several schools for the 1994 contract term that the instant bid process is to replace. Petitioner was unable to perform the work at all the schools that it was awarded and surrendered its rights to some of those schools. Petitioner retained its contract for several other schools. The work Petitioner performed on the schools it retained was not acceptable to the Respondent. The record is replete with notices to the Petitioner stating its work was not acceptable and describing the noted deficiencies. Several of these letters threaten to terminate contracts that had been awarded to the Petitioner. Petitioner asserts that its problems with the Respondent are the product of unreasonable inspections of its work by Joe Lawson and Tom Williams, who were hired after Petitioner started working on schools. Petitioner has filed complaints against with the Respondent against Mr. Lawson and Mr. Williams on two separate occasions which purport to document the Petitioner's mistreatment by these two employees. Petitioner's assertions pertaining to these two inspectors are not based on persuasive, competent evidence and are, consequently, rejected. Petitioner also argues that it has received no more notices of complaints than other providers when the number of schools are considered. This is contrary to the more believable testimony, which established that Petitioner received more complaints. Lee Ziomek is a buyer employed by Respondent who has extensive experience in public procurement. Steve Zwirz is a landscape site technician whose duties include technical writing, supervising contracts, and supervising personnel. Joe Lawson is Mr. Zwirz's supervisor. Following the opening of bids, Mr. Ziomek, Mr. Zwirz, and Mr. Lawson met to review Petitioner's past performance. As a result of this meeting, it was decided to recommend that Petitioner had not performed its past contracts in an acceptable manner and that it was not in the best interest of the School District to award these two contracts to the Petitioner. The numerous notices of deficiencies that had been documented by Respondent provided a reasonable basis to conclude that awarding these bids to the Petitioner was not in the best interests of the School District. The first page of the ITB form used by Respondent contains the following: AWARDS: In the best interest of the School Board, the Board reserves the right to reject any and all bids . . .
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a final order that sustains the rejection of Petitioner's bids as to items 3 and 43 of ITB SB 96C-56Z and dismisses Petitioner's bid protest. Respondent's evaluation committee should resume the award process for items 3 and 43 of ITB SB 96C-56Z. DONE AND ENTERED this 23rd day of October, 1995, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 23rd day of October, 1995. COPIES FURNISHED: J. Steven Reynolds, Esquire 2628 Forest Hill Boulevard West Palm Beach, Florida 33406 Robert A. Rosillo, Esquire Palm Beach County School Board 3318 Forest Hill Boulevard West Palm Beach, Florida 33406-5813 Dr. C. Monica Uhlhorn, Superintendent Palm Beach County School District 3318 Forest Hill Boulevard West Palm Beach, Florida 33406-5813 Cynthia S. Prettyman, General Counsel Palm Beach County School District 3318 Forest Hill Boulevard West Palm Beach, Florida 33406-5813
The Issue The issue for consideration herein is whether the Respondent's proposed award on BID No. HSMV - 90022010 to Dunn Construction Company, Inc., should be upheld.
Findings Of Fact At all times pertinent to the issues herein, the Department was the state agency responsible for the solicitation of bids for and award of contracts for the construction of state buildings in Florida. Both Greenhut and Dunn are qualified contractors who are certified to bid on state construction contracts in general and this procurement in particular. In December, 1991, the Department issued an advertisement for bids for the project in issue herein, the construction of the Kirkman Complex Addition Data Center in Tallahassee, Florida. According to the Advertisement for Bids, all bids "must be submitted in full accordance with the requirements of the Drawings, Specifications, Bidding Conditions and Contractual Conditions, which may be examined and obtained ..." from the Department's designated architect/engineer, Clemons, Rutherford and Associates, Inc. in Tallahassee. Section B-21 of the request for proposals (invitation to bid) reads, in pertinent part: The recommendation for contract award will be for the bidder qualified in accordance with Section B-2 and submitting the lowest bid provided his bid is responsible and it is in the best interest of the Owner to accept it. The Owner reserves the right to waive any informality in bids received when such waiver is in the interest of the owner. Bids received on this project were originally scheduled to be opened and read aloud on January 15, 1992 with the tabulation and Bid Award Recommendation to be posted the following days at the location where the bids were opened. The proposal as originally issued called for the submittal of a Base Bid with four Alternates, 1a, 1b, 2, and 3. Alternate 1a was a deduct for merely extending the existing Johnson Controls System to incorporate the new work instead of providing a totally new and independent control system. Alternate 1b called for adding furniture and landscaping for certain of the rooms shown on the drawings; Alternate 2 called for adding a "shelled" fourth floor as described in the proposal; and Alternate 3, as originally issued, called for: Add a complete fourth floor as indicated in drawings including the finished interior partitions with full HVAC, Plumbing and Electrical Service. Include furniture and landscaping for rooms 414 and 419. (Includes items in Alternate No. 2) As a result of questions received from prospective bidders at the pre-bid conference which indicated some confusion as to the meaning and intent of the Department regarding Alternate No. 3, by letter to all prospective bidders, dated January 8, 1992 the Department's architect indicated: Alternate #3 shall be the fourth floor complete, as shown on drawings, which includes items in Alternate #2. Addendum #1 to the request for bids, dated January 10, 1992, clarified Item 1-3.6), PROPOSAL FORM, of the PROJECT MANUAL to ADD to "Alternate #3", "(Include items in Alternate #2)". Item #2-1 of Addendum #2, dated January 16, 1992, deleted the sentence changed by Item #1- 3.6, and revised the sentence to read as follows: This includes any items required in addition to Alternate #2 to complete the remainder of the work for the Fourth Floor. Information contained at the beginning of each Addendum calls the bidders' attention to the change and indicates that failure to incorporate it may result in disqualification. The due date for bids was extended at the instance of the Department. Both Petitioner and Intervenor submitted bids for this project as did several other concerns on January 23, 1992. Greenhut's base bid was $4,139,000 with a deduct of $63,600 for Alternate 1a, and additions for Alternates 1b, 2, and 3 of $69,500, $239,000, and $209,000 respectively. Greenhut's total bid, therefore, through Alternate 3, was $4,592,900. Dunn's base bid was $4,079,000 with a zero deduct for Alternate 1a, and additions for Alternates 1b through 3 of $67,000, and $428,000. Dunn's total bid, therefore, was $4,574,000 for a difference of $18,900. Greenhut's bid was submitted on a form which provided for the base bid, the deduct for 1a, and the additions for 1b. 2 and 3 with the figure for 3 being those costs in addition to those identified in Dunn's bid was submitted on a prior form which provided for a base bid, a 1a deduction if any, (there was none), and additions for 1b, 2, and 3 with the figure for 3 including the figure listed for 2. An initial review of Dunn's bid form, then, showed a base bid of $4,079,000, no 1a deduction, a 1b addition of $67,000, a 2 addition of $311,000, and a 3 addition of $428,000. This letter figure included the $311,000 figure for Alternate 2, which should have been deducted from the bid during tabulation. When the bids were opened on January 23, 1992 by Mr. Everline, each figure on each bid was read off and listed on the bid tabulation form in the appropriate area. No attention was given at that time to the appropriateness or correctness of the figures listed on each bid form, nor was any attention paid to any other technical requirement of the procurement. This was merely a transfer of figures from the bid form to the tabulation form, and when this was done, Mr. Everline announced to all in attendance, including many contractor representatives, that the "apparent low bidder" was Greenhut. In arriving at that conclusion, Mr. Everline added all of Dunn's figures together without deducting the $311,000 listed for Alternate 2, a figure which was included in the $428,000 figure listed for Alternate 3. This resulted in an incorrectly large total bid for Dunn. Sometime later that day, a representative of Dunn contacted Mr. Everline to indicate that Dunn had inadvertently bid on the wrong form which precipitated its misleading presentation. Mr. Everline properly declined to discuss the matter and referred the Dunn representative to the Department's legal counsel. Sometime thereafter, when the bids had been tabulated and reviewed for responsiveness and legal qualification of bidders, Mr. Everline suggested to representatives of DHSMV that in order to forestall a protest, only so much of the project as extended through Alternate 2 be awarded. DHSMV officials, however, had sufficient funds available for the entire project, including some additional funds, if necessary, for cabling, and insisted they wanted the entire project awarded. The Department's legal counsel, upon review of the situation, concluded that the Dunn's actual bid intent was clear to include the amount listed for Alternate 2 within that listed for Alternate 3, and not to consider the two as additives to each other. It further concluded that Dunn's use of the improper form on which to submit its bid was immaterial and afforded it no improper competitive edge over other bidders. Therefore, it was concluded that Dunn was the low responsive bidder and, on February 4, 1992, the Department issued a Notice of Award to Dunn. Thereafter, Greenhut filed its Petition For Hearing taken as a protest to the award. Both the Department and Dunn agreed that Greenhut had standing to protest the award and that the protest was timely filed. It is so found.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the Department of General Services enter a Final Order in this case dismissing the protest of Greenhut Construction Company, Inc., in regard to the proposed award of contact in bid number HSMV - 90022010 to Dunn Construction Company, Inc. RECOMMENDED in Tallahassee, Florida this 21st day of April, 1992. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of April, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 92-1297 BID The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the Proposed Findings of fact submitted by the parties to this case. FOR THE PETITIONER: 1. - 6. Accepted and incorporated herein. 7. - 9. Accepted. Accepted. & 12. Accepted and incorporated herein. Accepted. Accepted. & 16. Accepted and incorporated herein. Accepted and incorporated herein. & 19. Accepted and incorporated herein. Accepted. & 22. Accepted and incorporated herein. Argument and not Finding of Fact except for 1st sentence which is accepted. & 25. Accepted and incorporated herein. FOR THE RESPONDENT: 1. - 3. Accepted. 4. - 6. Accepted and incorporated herein. 7. & 8. Accepted. 9. - 12. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. Accepted and incorporated herein. & 17. Accepted and incorporated herein. Irrelevant but accepted as true. Accepted. Accepted and incorporated herein. Accepted. Accepted. Irrelevant but accepted as true. Accepted. Accepted and incorporated herein. Irrelevant. Accepted and incorporated herein. Accepted. FOR THE INTERVENOR: Accepted. - 5. Accepted and incorporated herein. Accepted and incorporated herein. & 8. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. Accepted and incorporated herein. - 15. Accepted. 16. - 19. Accepted. 20. & 21. Accepted. Accepted and incorporated herein. & 24. Accepted. COPIES FURNISHED: Robert A. Emmanuel, Esquire 30 South Spring Street Post Office Drawer 1271 Pensacola, Florida 32596 Sylvan Strickland, Esquire Suite 309, Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 Harry R. Detwiler, Jr., Esquire 315 S. Calhoun Street, Suite 600 Tallahassee, Florida 32301 Ronald W. Thomas Executive Director Department of General Services Suite 307, Knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 Susan Kirkland General Counsel Department of General Services Suite 309, knight Building 2737 Centerview Drive Tallahassee, Florida 32399-0950
