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
The Issue Whether Respondent's intention to award the contract arising out of Invitation to Bid 12/13-44 (the ITB) to Paragon Construction is contrary to Respondent’s governing statutes, Respondent’s rules on policies, or the ITB specifications.
Findings Of Fact Stipulated Facts On November 16, 2012, the Department posted its ITB for demolition and renovation at the Pompano State Farmers Market. The ITB specified that bids were to be submitted to the Respondent at 407 South Calhoun Street, Mayo Building, Room SB-8, Tallahassee, Florida. The bid opening for the ITB was scheduled for 2:00 p.m. on December 21, 2012. Petitioner's response was received by the Department on December 21, 2012, at 11:07 a.m. Three other responses, from Bi-Tech Construction, Inc., JW Anthony Builders, Inc., and Eagle Enterprises, were received by Respondent prior to 2:00 p.m. on December 21, 2012. Five responses, from Paragon Construction, West Construction, State Contracting and Engineering Corporation, Real Concepts, and Anzco, Inc., were delivered by FedEx to the Department's mailroom at 2:02 p.m. on December 21, 2012. Each was tendered to FedEx on December 20, 2012, for delivery to the Department by 8:30 a.m. on December 21, 2012. The five responses were logged in by the Department's employees on December 21, 2012, between 2:03 p.m. and 2:04 p.m. Petitioner's response and the responses of Bi-Tech Construction, Inc., JW Anthony Builders, Inc., and Eagle Enterprises were opened at approximately 2:10 p.m. by Tina Peacock, assistant to the Department's purchasing director, Christie Hutchinson. Ms. Hutchinson advised Petitioner at 2:15 p.m. on December 21, 2012, via e-mail that Petitioner had provided the apparent low bid of $114,500. At 2:30 p.m. on December 21, 2012, the Department's mailroom personnel delivered the five additional responses to the Department's purchasing bureau in room SB-8 and left them unopened on Ms. Peacock's desk. Ms. Peacock had already left for the day. Ms. Hutchinson discovered the responses and opened them at approximately 2:40 p.m. on December 21, 2012. At 2:56 p.m., Ms. Hutchinson advised Petitioner that Petitioner was no longer the apparent low bidder and that the apparent low bidder was Paragon Construction, with a bid of $98,873. The Department was initially advised by FedEx on January 9, 2013, that the delay in delivering the five responses was due to weather delays in FedEx's Tennessee processing center. FedEx later confirmed that the delay was caused by their internal package sorting network and not due to weather conditions. The tabulation sheet showing the Department's intention to award a contract to Paragon Construction was posted on January 7, 2013. Petitioner timely filed its Petition challenging the Department's intended award. Findings of Fact Based on the Evidence of the Record Under “Special Terms, Conditions and Specifications,” the ITB states in the "Purpose" section that the "project budget is estimated to be $120,000.” All mail and express courier deliveries addressed to the Department are delivered to the Department's central mailroom, which is located in a different part of the building from Ms. Hutchinson's office. Mailroom personnel log in the delivered item, then deliver the mail or item to the room specified on the envelope or package. The normal bid opening procedure used by the Department is for bids to be opened by Ms. Peacock in Ms. Hutchinson's office. In this instance, both Ms. Peacock and Ms. Hutchinson were present for the opening of the first four bids that were received before 2:00 p.m. Bid responders are notified in the ITB that they may, but are not required to, attend the bid opening, which is public. At approximately 2:33 p.m. on December 21, 2012, Ms. Hutchinson received an e-mail from one of the bidders, West Construction, inquiring if the Department received their bid package by the deadline. She sent the tabulation sheet to West Construction. Ms. Hutchinson went to Ms. Peacock's desk at approximately 2:40 p.m. to return the file with the tabulation sheet, and discovered the additional envelopes on Ms. Peacock's desk. She went to the mailroom to find out when the packages were received by the Department, then sought advice from the Department's legal counsel. Upon receiving that advice, Ms. Hutchinson proceeded to open the late arrivals. By that time, Ms. Peacock had gone home, so Ms. Hutchinson personally opened them. There is nothing in the record to indicate that anyone else was in the room with Ms. Hutchinson when she opened the late-arriving bid responses. Between the time of delivery of the responses to the Department, and the opening of the same, the five bid responses remained sealed. Ms. Hutchinson testified that prior to the opening of the five late bids, she did not know what comprised the contents of each bid and had no way of knowing whether the late bids were higher or lower than those already opened. Her testimony in this regard was credible and is accepted. Paragraph 16 of the General Instructions to Respondents reads as follows: Minor Irregularities - Right to Reject. The buyer reserves the right to accept or reject any and all bids, or separable portions thereof, and to waive any minor irregularity, technicality, or omission if the Buyer determines that doing so will serve the State's best interests. The Buyer may reject any response not submitted in the manner specified in the manner specified by the solicitation documents. The “Evaluation and Award” section of the ITB also informs the bidders that "[a]s the best interests of the state may require, the right is reserved to reject any and all bids or waive any minor irregularity or technicality in bids received." The ITB contains the following language regarding late bids: LATE BIDS Bids received after the bid opening time and date will be rejected as untimely and will not be opened. A late bid notice will be sent to the bidder upon the posting of award notice with instructions for its return. Unclaimed late bids will be destroyed after 45 days. Offers from vendors listed on the Department's posted award notice are the only offers received timely in accordance with the Department's bid opening time and date. After leaving work shortly after 2:00 p.m. on Friday, December 21, 2012, Ms. Peacock did not return to work until January 2, 2013. She then contacted FedEx to inquire about the reason for the delay in the delivery of the late responses. Initially, she was informed that the delay was due to weather. However, by letters dated January 29, 2013, the Department was informed by FedEx that the delay was caused by their package sorting network. Whether the delay was caused by the weather or the package sorting network is of no consequence. In either event, the lateness of the five bids which arrived at the Department two minutes after the posted bid opening time was due to problems of the courier, and was not caused by the bidders. The January 29, 2013, letters also informed the Department that the late packages, including the one containing the bid from Paragon Construction, were tendered to the courier service for morning delivery on December 21, 2012.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED: That the Department of Agriculture and Consumer Services enter a final order dismissing the bid protest filed by Petitioner. DONE AND ENTERED this 26th day of March, 2013, in Tallahassee, Leon County, Florida. S BARBARA J. STAROS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 26th day of March, 2013.
Findings Of Fact At some time prior to August 2, 1984, DOT issued bid blanks for a mini- contract for State Project No: 76020-3515, for work consisting of cleaning and guniting a concrete box culvert located on State Road 19, in Putnam County, Florida, approximately one mile south of the Cross Florida Barge Canal. The bid package, signed by C. A. Benedict, District Engineer, for the DOT, specifically reserved the right to reject any and all bids. The bid package broke the work down into three item numbers. The first was mobilization and called for one pricing unit. The second item called for maintenance of traffic at the work site and called for one pricing unit as well. The third area called for restoration of spalled areas (gunite) and called for approximately 437 cubic feet to be priced. In this regard, the plans furnished with the bid package and the bid package itself, in at least three separate locations, called for the bid as to the last item to be priced and paid for on a unit price basis. Petitioner submitted the lowest bid of seven bidders. It was determined to be faulty, however, in that though it properly priced the first two items, it failed to submit a unit price for the third item per unit, submitting instead a total price for the third item based on the entire cubic footage. Petitioner's bid indicated 437 cubic feet priced at a total of $17,832.00. Simple arithmetic permits a division which results in a unit price for each of the 437 cubic feet of $40,805. This last unit price, however, is not reflected on the bid submitted by Petitioner. Petitioner's bid is the only bid of the seven submitted which did not contain a unit price for each of the units in the third item. EDS has been in business since 1980. It performed one previous contract for DOT and is familiar with DOT's rules regarding bidding. It had ample opportunity to examine the plans and the bid blank before submitting its bid and admits that the unit price, though required, was omitted. Petitioner contends, however, that the omission is not a material variance and can be waived by Respondent. Respondent contends, on the other hand, that the failure to list the unit price in the third item is material. This determination is based on the fact that since the bid package calls for payment on a unit basis, the odd one- half cent per unit does not permit even money payment and requires rounding off. Even with this being true, the maximum difference would be one- half cent to be rounded off either upwards or downwards. At some point after opening, at least one of the unsuccessful bidders found out that Petitioner's bid failed to technically conform to the terms of the bid blank and at this point the second lowest bidder, Vann's Sandblasting, whose bid was $4,000.00 higher than that of Petitioner, and who had done several contracts for Respondent in the past, indicated that if petitioner's bid were not rejected, he would file a protest. The one-half cent variance, itself, is not material. Considering all factors, however, the failure to state the unit price may, under certain circumstances, be.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is, therefore: RECOMMENDED THAT Petitioner, EXPLOSIVE AND DIVING SERVICES, INC., be awarded the contract for State project No 76020-3515. RECOMMENDED this 27th day of February, 1985, at Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 FILED with the Clerk of the Division of Administrative Hearings this 27th day of February, 1985. COPIES FURNISHED: Gail S. Wood, President Explosive and Diving Services, Inc. Post Office Box 200 Clarksville, Florida 32430 Larry D. Scott, Esquire Department of Transportation Haydon Burns Building, MS-58 Tallahassee, Florida 32301 Paul Pappas, Secretary Department of Transportation Haydon Burns Building, MS-58 Tallahassee, Florida 32301
Findings Of Fact By Invitation to Bid for Lease NO. 590:1944, Respondent invited lease proposals for approximately 15,206 square feet of office space "located within the following boundaries: On the North, Aloma Avenue/Fairbanks Avenue the East, Semoran Boulevard the South, Colonial Drive, and on the West, Mills Avenue." The geographic area includes as many as 100 office buildings, although the invitation only generated three bids. The Invitation to Bid announced a Pre-Bid Conference on December 22, 1987. Interested parties were directed to contact Linda N. Treml, whose telephone number was provided, for "bid specifications and information regarding the space." The Invitation to Bid stated that "[a]ny questions concerning this project are to be directed to [Ms. Treml]" and "prospective bidders are encouraged to consult with [Ms. Treml] beforehand in an attempt to enable as correct a bid submittal as possible." The Invitation to Bid required that certain attachments accompany the bid proposal and referred the prospective bidder to paragraph 9 of the Bid submittal Form. The required attachments included a scaled floorplan "showing present configurations with measurements," net rentable square footage calculations using floorplan measurements, and a preliminary site layout. The Invitation to Bid stated that Respondent reserved the right to waive any minor informalities or technicality and seek clarification" of bids received, when such is in the best interest of the state. Responding to Respondent's newspaper advertisement and direct-mail solicitation for bids, James W. Boyle, who is a real estate broker active in leasing and property management, requested from Ms. Treml an Invitation to Bid and Bid Submittal Form. Mr. Boyle regularly reviews announcements of forthcoming leasing activity by state agencies. If he is aware of a building that appears to meet the agency's requirements, he contacts the building's owner or manager and informs him or her that he may have a prospective tenant. After receiving the bid materials for Lease No. 590:1944, Mr. Boyle contacted Kathryn Doyle, who is the leasing manager of Petitioner, and learned that Petitioner could accommodate Respondent's space needs for the term sought in the Lakeview 436 office building. Mr. Boyle assisted Ms. Doyle in the preparation of the Bid Submittal Form for Petitioner. In his first conversation with Ms. Doyle, Mr. Boyle ascertained that Petitioner's building carried a Semoran Boulevard street address and in fact had direct access to Semoran Boulevard. Petitioner's building lies on the east side of Semoran Boulevard, which serves as the eastern boundary of the geographic area described in the Invitation to Bid. Three bids were submitted in response to the subject Invitation to Bid. When they were opened, Ms. Treml and her supervisor, George A. Smith, determined that bids of Petitioner and a third party were nonresponsive because their office buildings were outside the geographic area specified in the Invitation to Bid. These bids were not considered further. Mr. Boyle had previously represented the owners of the FARE building several months earlier in a bid for Lease No. 590:1895. The Invitation to Bid in that case, which was issued by Respondent and named Ms. Treml as the contact person, provided that the proposed office space must be located within the following boundaries: Beginning at the intersection of US 17-92 and Colonial Drive, then west on Colonial Drive to the intersection of Edgewater Drive, then north on Edgewater Drive to the intersection of Kennedy Blvd. . ., then east on Kennedy Blvd. . . . to the intersection of US 17-92, then south on US 17- 92 to the point of beginning." Although Mr. Boyle's client was not awarded Lease NO. 590:1895 for reasons not relevant here, his client's bid, as well as the bid of another unsuccessful bidder owning a building on the east side of the highway serving as the east boundary of the geographic area, were considered responsive and thus within the specified geographic area. Ms. Treml interpreted the boundary description in Lease NO. 590:1944 differently from the boundary description in Lease NO. 590:1895. The description for Lease NO. 590:1895 defined the boundaries by "beginning" at a certain intersection, then proceeding "on" a highway, and so on. The description for Lease NO. 590:1944 defined the boundaries by identifying landmarks "on the north," then the "east," and so on. At the time of assisting in the preparation of Petitioner's bid, Mr. Boyle was also aware of an Invitation to Bid issued by Respondent for Lease NO. 590:1875. In this case, Respondent specified office space "in the following area of Brevard County, Florida: Beginning at the intersection of U.S. Highway 1 and State Road 50, then West on SR-50 to the intersection of 1-95, then North on 1-95 to the intersection of SR-406 . . . then East on SR-406 to the intersection of U.S. 1, then South on U.S. 1 to the point of beginning." In the case of Lease NO. 590:1875, the bid contact person, Lynn Mobley, issued a clarification letter stating that any building located on either side of the boundary road with an address on the boundary road would be considered to be within the boundary. Ms. Mobley and her supervisor, Ernest Wilson, who are Respondent's District 7 Facilities Services Assistant Manager and Manager, respectively, have consistently advised potential bidders that a building located on a boundary highway is included in the geographic area even though it would be outside the area if the dividing line were the centerline of the highway. Mary Goodman, Chief, Bureau of Property Management of the Department of General Services, testified that, in the course of her review of leasing activities by various state agencies, she has historically guided agencies that, if a building abuts a boundary highway but is not, strictly speaking, within it, the agency "could waive that as a minor technicality and consider it a responsive bid." Neither Mr. Boyle, Ms. Doyle, or any other representative of Petitioner spoke to Ms. Goodman prior to submitting the subject bid proposal. Ms. Treml customarily waives minor irregularities in bid submittals. However, she does not treat the location of a building outside the geographic area as a minor irregularity. To do so would be unfair to owners of other buildings outside the geographic area who took the geographic description at its face value and never submitted bids. Ms. Doyle received the bid materials from Mr. Boyle after the Pre-Bid Conference had taken place. However, Mr. Boyle elected not to attend the Pre- Bid Conference at which Ms. Treml explained, among other things, her interpretation of the specific geographic area. He chose not to attend because he felt that he would not learn anything relevant at the conference, which was attended by a representative of Intervenor. Neither Mr. Boyle, Ms. Doyle, or any other representative of Petitioner contacted Ms. Treml prior to submitting Petitioner's bid. Mr. Boyle, whose compensation in this case is entirely contingent upon a successful bid, estimates that he spent about 20 hours working on Petitioner's bid. Ms. Doyle estimates that she spent about 40 hours working on the bid. Petitioner also spent $800 in obtaining an "as-built" drawing of the space that accompanied its proposal. By letter dated February 22, 1988, Respondent notified the bidders of its decision to award the lease contract to Intervenor. Petitioner filed a notice of intent to protest the award by letter dated February 24, 1988. Ms. Treml met Mr. Boyle and Ms. Doyle on March 1, 1988, and cited the location of Petitioner's building as the only reason for the determination of nonresponsiveness. The attempt at mediation having failed, Petitioner filed a formal written protest of the award by letter dated March 3, 1988. Petitioner attached to its bid proposal an "as-built" drawing. Although drawn to scale, the drawing did not bear the measurements of the then- present interior tenant improvements, mostly walls, nor did it disclose on its face any calculations showing how the rentable area was computed from the gross area. These omissions were due to Mr. Boyle's advice to Ms. Doyle that such information would be unnecessary in this case. The omissions from Petitioner's "as-built" drawing were rendered less critical by the fact that Respondent would have the right under the lease to require the landlord, at its expense, to remove the present improvements and re- configure the space to Respondent's demands. However, one purpose of the floorplan is to show where the space is located within the building. Another purpose is to verify the rentable area calculation by showing the measurements of items, such as restrooms, that should not be included in the rentable area for which Respondent is charged rent. The drawing is supposed to show the rentable area computation. Additionally, even though Respondent could insist on a total renovation of the premises, Respondent might wish to evaluate whether it could use a portion of the existing space in order to reduce the possibility of construction delays. George A. Smith, the Senior Management Analyst for Respondent who reviewed Ms. Treml's determination of nonresponsiveness prior to the award of the subject lease, testified that the deficiencies in Petitioner's "as-built" drawing were not a "minor irregularity."
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.
Findings Of Fact On May 19, 1983, Respondent mailed official Invitations to Bid (IFB) forms to 18 different firms, including Petitioner, soliciting bids for Class VI printing in accordance with the specifications and conditions attached to the letter, signed by R. E. Read, Jr. This letter contained the comment, "As the best interests of the State may require, the right is reserved to reject any and all bids and to waive any irregularities in bids received." This letter also advised prospective bidders who had questions regarding the IFB to call Larry Amison, the individual who had drafted the accompanying specifications. The notice of IFB, published in the Tallahassee Democrat on Thursday, May 19, 1983, also contained a notice of reservation of the right to reject all bids. Only five IFB forms were returned. Three of the five were returned without bids for various reasons, such as "Not Competitive," "Unable to meet specified delivery date" and "Cannot schedule job of this proportion at this time." This type of explanation, in government procurement circles, need not be taken at face value, but is often used to signal the recipient's thanks for the invitation to bid and a desire to be invited to bid again at some time in the future. The other two forms received were bids: one from Zenith Communications Group, and one from Petitioner. This procurement was somewhat unusual in that the IFB stipulated the amount of money the agency had to spend and requested a hid as to the most product it could get for that money. There were two publications involved: "A" and "B." An alternative was given on delivery date options: one within 30 working days of receipt of approved proofs, and one within 45. Zenith offered to provide 7,180 copies of Book "A" and 7,155 copies of Book "B" (14,335 total books) for a total price of $53,400 1/ within 30 working days. Petitioner offered to provide 9,473 copies of Book "A" and 4,950 copies of Book "B" (15,423 total books) for a total price of $53,344.64 within 45 days. The bids were opened on June 1, 1983, and published from June 1 through June 10, 1983. They were brought to the Director for consideration upon opening. It is his responsibility to evaluate the bids and make a recommendation to the Commissioner of Agriculture on the successful low bidder. Since there was only one bid on each delivery date, the Director felt there were not two comparative bids. As a result, he forwarded the bid package to Ms. Grace Harrison, a purchasing agent with the Department of Agriculture and Consumer Services and an individual very familiar with the procurement of printing services. After a review of the entire bid package, Ms. Harrison's studied opinion was that there were two valid bids and Douglas was the low bidder, and it is so found. Ms. Harrison also felt it was unusual not to receive any more responses than were received on a procurement of this magnitude. This same opinion is held by Mr. Amison, who drafted the specifications. Others have differing opinions, however. Whether it was unusual or not, however, is immaterial. There were two valid bids, and only two are required for an award. However, even in the case of two bids, the agency reserved the right to reject any and all bids. As a result, on or about June 6, 1983, the Director decided, based on his understanding of state policy on the matter and in light of the size of the procurement, to seek more bids through rebidding. In this case, the Director felt more bids were available because of the responses of the nonbidders which referred to the response times being so short. Therefore, he directed a rebid, and this information was communicated to all bidders, including Petitioner. On June 7, 1983, Petitioner wrote to the Director, disagreeing with his decision and notifying him of its protest. On the following day, the Director notified Petitioner the rebidding was being delayed, giving Petitioner 10 days to file a formal notice of protest. This was done in a timely manner. The phrase regarding the agency's right to reject bids is contained in every State IFB. Its purpose is to permit state agencies to reject bids where it becomes apparent there is a valid and legitimate benefit to be gained by the agency in doing so. One such situation is when, in the bona fide opinion of the agency, there are insufficient bids. While there is a difference of opinion as to whether only two bids are unusual in a procurement of this nature, there is no dispute that it would have been beneficial to the agency to have received more than two, since more bids would increase competition. To rebid the contract at this juncture would undoubtedly increase competition to the potential benefit of the Respondent. However, Petitioner claims it would also work to its detriment because other potential bidders would have access to the details of the two present bids and would thereby gain an advantage. This may be the result of rebidding.
Recommendation In light of the foregoing, it is RECOMMENDED: That Petitioner, Douglas Printing Company, Inc., be awarded Contract DOF- ADM-79. RECOMMENDED this 8th day of September, 1983, in Tallahassee, Florida. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of September, 1983.
Findings Of Fact The Respondent issued an Invitation to Bid by which sought to lease approximately 21,000 net useable square feet of office space to be located in Tampa, Florida. This Invitation to Bid is referred to as Lease Number 590:1946. Three bids were received in response to the Invitation to Bid, and they were opened on July 29, 1988. Bids were received from the Petitioner, Structures, Inc., and a third bidder that has not filed a protest, and is therefore not relevant to this proceeding. All bidders were initially determined to be responsive to the Invitation to Bid. Petitioner and Structures, Inc., submitted bids involving the same office space and real property. Petitioners' bid for this space was lower that the bid filed by Structures, Inc., when compared on a present value rental cost analysis. Despite Petitioners' lower bid, Respondent awarded this lease to Structures, Inc., due to the receipt of a letter dated August 2, 1988, from Intervenor, the owner of the subject property, stating that, "Mr. Hartley (Petitioner) has no right to propose this property to the Department as Mr. Hartley and I have no agreements with respect to my leasing the property to him." On the basis of this letter, the Respondent concluded that Petitioners had no legal interest in the subject property and therefore did not have the requisite control over the property to submit this bid. The Petitioners' bid was determined to be nonresponsive. Petitioners did not present competent substantial evidence to discredit or refute Intervenor's contention that they lacked any legal interest in this property. It is undisputed that Intervenor owns the property, and Intervenor was present at the hearing to confirm that the letter of August 2, 1988, was, in fact, his letter. The Petitioner, James C. Hartley, was not present at the hearing. The only evidence presented by Petitioners of any alleged interest in this property is a copy of a telecopy letter dated June 29, 1988, filed with its bid, which purports to express the intention of Intervenor and Petitioner Hartley to enter into a lease for certain property described on an Exhibit A, which was not presented in evidence. Thus, there is no indication on the face of this document that the telecopy letter relates to the subject property. However, even if the letter does relate to the property owned by Intervenor, the agreement specifically states that Intervenor's obligation to enter into a lease with Petitioner is expressly conditioned upon Intervenor's approval, In his sole discretion, of any sublease with the Respondent. If for any reason the Intervenor disapproved of the Petitioners' bid and lease with the Respondent, according to this agreement, he could simply refuse to enter into any lease of the subject property with Petitioners, and thus, Petitioners would have no interest or control over the property, and could not then sublease it to the Respondent. Finally, there is no recital of consideration in the purported agreement set forth in the telecopy letter. Based upon a complete review of the evidence presented, it is found that Petitioners did not have a valid, legal interest in the subject property which would be sufficient to allow them to file this bid and propose this lease to the Respondent. As such, Petitioners' bid was unresponsive.
Recommendation Based upon the foregoing, it is recommended that Respondent enter a Final Order dismissing Petitioners' protest Lease Number 590:1946. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 3rd day of November, 1988. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of November, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-4645BID Rulings on Petitioners' and Intervenor's Proposed Findings of Fact: Petitioners and Intervenor did not timely file a Proposed Recommended Order containing proposed findings of fact. Rulings on the Respondent' Proposed Finding of Fact: Adopted in Findings of Fact 1 and 2. Adopted in Finding of Fact 3. 3-5. Rejected as irrelevant and unnecessary. 6-8. Adopted in Finding of Fact 4. 9. Rejected in Finding of Fact 2, and as irrelevant. COPIES FURNISHED: Joseph D. McFarland, Esquire 520 Second Avenue, South St. Petersburg, Florida 33701 Robert L. Rocke, Esquire Post Office Box 3433 Tampa, Florida 33601 Jack Farley, Esquire W. T. Edwards facility 4000 West Buffalo Fifth Floor, Room 520 Tampa, Florida 33614 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact State Project No. 46090-3511 (the project) is for construction of the West Bay Bridge on State Road 79 in Bay County, Florida. Competitive bids on the project were solicited in February, 1990. The bid letting on the project was held in March, 1990. The Petitioner, Fairchild, the Hardaway Company and ten other contractors bid on the project. The Hardaway Company submitted the lowest bid on the project in the amount of $9,487,258.17. Fairchild submitted the next lowest bid in the amount of $9,835,279.34. Divergent Unit Prices and Imbalances. The part of the Hardaway Company's bid relating to construction of the foundation for the approaches to the bridge (the "structural bid") is obviously below reasonable cost in several respects. The contract specifications require the use of sand fill, shell fill, reinforcement grid (biaxial type 2), and Class III (seal) concrete. The Hardaway Company's unit prices for these items were, respectively, one dollar per cubic yard for the sand fill, fifty cents per cubic yard for the shell fill, twenty-five cents per square yard for the reinforcement grid, and ten cents per cubic yard for the Class III seal concrete. As a result, the Hardaway Company's bid for these items is obviously significantly below reasonable cost and approximately $95,500 below what Fairchild bid for the same portion of the contract. In contrast to the sand fill, shell fill, reinforcement grid and Class III concrete, the Hardaway Company's bid on some of the other parts of the structural bid were relatively high. The reinforcing steel for the substructure (Item 415-1-5) was bid at approximately twice reasonable cost (80 a pound versus, e.g., 42 in Fairchild's bid), resulting in $609,936.80 attributable to that part of the bid versus, e.g., $320,216.82 for Fairchild. The statistical average (the DOT's so-called "average 2") for the other serious bidders under this item also was 42 a pound. The Hardaway Company also bid obviously in excess of reasonable cost for the lump sum item of mobilization for pile installation--$600,000 versus $125,000 in Fairchild's bid and less in the bids of several of the others bidders. (The statistical average for the other serious bidders under this item was $225,000.) But the Hardaway Company bid only $60,000 for the lump sum item for removal of existing structures (versus $160,000 in Fairchild's bid) and only $30,000 for the lump sum item for removal and disposal of fender system (versus $110,000 in Fairchild's bid). The portion of the Hardaway Company's bid attributable to mobilization for the roadway work is significantly less than the Fairchild bid under this item ($200,000 versus $375,000) and partially counterbalances the excess in the part of the Hardaway bid for mobilization for the pile installation. The portion of the Hardaway Company's bid attributable to clearing and grubbing also was high, at $20,000 an acre versus a statistical average of $4,200 an acre for the other serious bidders, resulting in $216,000 for the Hardaway Company bid versus, e.g., $32,400 for the Fairchild bid and the $45,360 statistical average. DOT Review Procedures. Section 2-6 of the DOT's Standard Specifications applicable to the project provides: 2-6 Rejection of Irregular Proposals. A proposal will be subject to being considered irregular and may be rejected if it shows omissions, alterations of form, additions not called for, conditioinal or unauthorized alternate bids, or irregularities of any kind; also if the unit prices are obviously unbalanced, either in excess of or below the reasonable cost analysis values. The DOT is in the process of formulating a policy on the use of the Technical Review Committee in the bidding process. A proposed procedure has been developed, which has not yet been made final and has not yet been signed by the Secretary of the DOT, under which the Technical Review Committee would review the low bid on each contract, among other things not applicable to this case, for "any significant irregularities in unit bid prices" and for "unbalanced bidding." The DOT has not yet defined "any significant irregularities in unit bid prices" or "unbalanced bidding" for purposes of defining the event that triggers review by the Technical Review Committee. The DOT Director of the Office of Construction, Robert Buser, is of the opinion that the unit prices the Hardaway Company bid for the sand fill, the shell fill, the reinforcement grid and the Class III seal concrete are "significant irregularities in unit bid prices." On the other hand, the DOT's Preliminary Estimates Engineer, Robert Griner, who, unlike Buser, is a member of both the Technical Review Committee and its Preliminary Technical Subcommittee, and is of the opinion that the Hardaway bid for the sand fill, the shell fill, the reinforcement grid and the Class III (seal) concrete are "mathematical imbalances," not "significant irregularities in unit bid prices," which he would define as bids that omit a unit price, whose numerical values do not match words used to express the values, or that are not signed. Under Griner's approach, which was followed in this case, the Preliminary Technical Subcommittee looks at "mathematical imbalances" to see if they are "material imbalances." If the Preliminary Technical Subcommittee decides that it is not a "material imbalance," it simply reports this finding at the outset of the meeting of the Technical Review Committee, which accepts the finding and does not itself consider the matter any further. Only if the Preliminary Technical Subcommittee reports a "material imbalance" does the Technical Review Committee further consider the question. Front-end Bidding. Under the DOT contract for the project, like other items in the specifications, mobilization and land clearing and grubbing are paid in installments as the work proceeds. But, unlike the other items, all of the portion of the contract attributable to mobilization and land clearing and grubbing is paid by the time the entire project is half completed. Similarly, a contractor is paid for reinforcement steel (substructure) when it is delivered to the site. As a result, by shifting dollars in a bid to these "front-end," lump sum items, a contractor can manipulate the bid process and contract to reasonably insure himself of early payment of these inflated items regardless what may happen to the project later. In analyzing these front-end, lump sum items, Griner treated them (along with the unreasonably low bids on the sand fill, shell fill, reinforcement grids and C III seal concrete) as "mathematical imbalances." Following the guidance of a Federal Highway Administration (FHWA) memorandum, dated May 16, 1988, on the subject of "Bid Analysis and Unbalanced Bids," Griner analyzed the Hardaway bid to be sure it would not be susceptible to cost overruns (it was not) and to be sure the quantities were correctly estimated (they were). He also analyzed the additional cost to the DOT of paying the Hardaway Company early (by the half way point of the project) for the inflated front-end items to determine whether the "mathematical" imbalance was "material," i.e., whether "the mathematically imbalanced bid will result in the lowest ultimate cost to the Government." Based on a twelve percent interest rate, Griner calculated that the inflated front-end items would cost the DOT approximately an additional $98,000, 1/ still much less than the difference between the low Hardaway bid and any other bid. Based on this calculation, Griner concluded that the "mathematical imbalance" in the Hardaway bid was not a "material imbalance" and did not require the award of the bid to Fairchild or one of the other bidders. Griner overlooked and did not apply another portion of the method of analysis in the FHWA memorandum on "Bid Analysis and Unbalanced Bids" that states: There are numerous reasons why a bidder may want to unbalance his/her bid on a contract. One reason is to get more money at the beginning of the project. The bidder does this by overpricing the work done early in the project. This is called "front loading" the contract. The leading case in the "front loading" area is Matter of: Riverport Industries, 64 Comp. Gen. 441 (1985). Here the Comptroller General held that if the bid is front loaded, regardless if it is the lowest bid, it "should be viewed as materially unbalanced since acceptance of the bid would result in the same evils as an advance payment. An advance payment is prohibited by law." The "front loading" may also be materially unbalanced due to the cost of money that must be paid out early versus over the normal construction fo the project. Under the Hardaway Company bid, the pile mobilization, the land clearing and grubbing, and the reinforcement steel (substructure) parts of the bid are "front-ended." 2/ Under the method of analysis suggested by the FHWA memorandum, the Hardaway Company would be paid approximately $428,000 in "advance payments" under these two items if it is awarded the contract. Approximately $375,000 in pile mobilization, $183,600 in land clearing and grubbing, and $289,700 in the reinforcement steel were shifted to these front- end items from the unbalanced sand fill, shell fill, reinforcement grid, and Class III (seal) concrete items. These dollars The shifted dollars are estimated by taking the difference between the statistical average for these items and the Hardaway bid on them. Since roiughly half of the shifted dollars would be paid earlier than they would be paid if they were bid under the sand fill, shell fill, reinforcement grid and Class III (seal) concrete items, the amount of "advance payment," under the FHWA analysis would be approximately $428,000. Griner did not explain why he only followed part, but not all, of the method of analysis suggested by the FHWA memorandum, other than to say he overlooked it. But he also testified that it is common practice for contractors to submit mathematically unbalanced bids, and the DOT always analyzes them the way he did in this case. Indeed, in the March, 1990, bid letting, Griner found "mathematical imbalances" in 21 of the 29 low bids but no "material imbalances." The Fairchild bid also contains "mathematical imbalances." It also "front-ends" several items. The total dollar value of the "front-ending" in the Fairchild bid (including roadway mobilization) closely approximates that found in the Hardaway bid and, under the FHWA analysis, would result in approximately the same amount of advance payment. Under Section 101-2.2 of the DOT's Standard Specifications for this project, contractors are limited to a maximum of ten percent of the total contract for mobilization. The Hardaway Company's total mobilization bid is within the maximum under the specifications. Notwithstanding the imbalances in the Hardaway bid, and the so-called "advance payments" that would result from the "front-ending" in the Hardaway bid, the Hardaway bid remains the lowest and best bid on the project, and it is the best interest of the DOT and the public to award the contract to the Hardaway Company. Even if the Hardaway Company had bid the sand fill, shell fill, reinforcement grid, and Class III (seal) concrete items exactly as Fairchild did, Hardaway still would be low bidder. "Value Engineering" and Alleged Alternative or Contingent Bidding. Inferences reasonably could be drawn from the evidence that the Hardaway Company may intend to propose to the DOT that the approach to the bridge be re-engineered so as to eliminate the need for the sand fill, the shell fill, the reinforcement grid and the C III (seal) concrete. If the DOT accepts such a proposal, the contract between the DOT and the Hardaway Company would have to be modified. If the re-engineered project were to allow the Hardaway Company to do the job for less than its bid price, half (or, if the proposal is innovative or unique, up to 80%) of the savings would be paid to the Hardaway Company under what the DOT calls "value engineering." Under DOT procedures, "value engineering" proposals are not made or evaluated until after the original contract is signed with the successful bidder. It is not an alternative bid or a contingent bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent, the Department of Transportation, enter a final order dismissing the bid protest filed by W. R. Fairchild Construction Company, Ltd., and awarding State Project No. 46090-3511 to the Hardaway Company. RECOMMENDED this 30th day of July, 1990, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 30th day of July, 1990.
Findings Of Fact In August, 1975, the Department of General Services invited competitive bids for the purchase of supervisory and control equipment and revenue metering equipment for expansion of primary electric utilities in the Capitol Center, a project known as State Project No. DGS-6026/6424, AEP File No. 74288-003. Plans and specifications for the project were developed by the department's consulting architect/engineers Reynolds, Smith and Hills. The Department of General Services (hereinafter Department) and Reynolds, Smith and Hills (hereinafter Reynolds) conducted formal bid opening on September 25, 1975. Bid proposals were received from petitioner, Weston Instruments, Inc. (hereinafter Weston), and from Respondents, Harris Corporation (hereinafter Harris) and Hathaway Instruments, Inc. (hereinafter Hathaway). The amount of the bids were as follows: CONTRACTOR BASE BID ALTERNATE NO. 1-ADD TOTAL Harris 332,000.00 28,649.00 360,649.00 Weston 338,991.00 20,965.00 359,996.00 Hathaway 343,429.00 33,224.00 376,653.00 Hathaway's bid as submitted was responsive to the specifications and other requirements of the bid invitation. Weston's bid was responsive to the specifications and requirements of the bid invitation with the following exception. Specification B-2, in its second paragraph, states: "In order to facilitate the execution of the Agreement, the Bidder shall submit with his proposal a list of and brief description of similar work satisfactorily completed, with location, date of contracts, together with names and addresses of Owners." Weston did not submit that information with its bid but did submit that information on October 9, 1975. The Harris bid as submitted was not responsive to the specifications and requirements of the bid invitation. The material deviations from the specifications found in the Harris bid are as follows: Paragraph 16755-13(c) of the specifications states that data logger equipment by Teletype, Lear Siegler or General Electric will be considered. The Harris bid proposed a data logger manufactured by Practical Automation, Inc. and noted that if Harris was required to conform to the specifications by furnishing a data logger manufactured by one of the three specified manufacturers, its base bid would have to be increased by $635.00. Paragraph 16755-18 of the specifications requires a specific number of supervisory functions at each of the nineteen locations. The Harris bid met the requirements of the specifications at only one of the nineteen locations. At each of the other eighteen locations the Harris bid was from one to three supervisory points deficient. According to the evidence presented it would cost between $250 to $300 per location to furnish the supervisory points left out of Harris' bid. Paragraph 16755-13(d) of the specifications requires that the data logger shall log an uninitiated (alarm) change of status in red lettering. Harris' bid states that the equipment they have chosen is not available with red ribbon printout and that they therefore propose that all changes normally logged in red would instead have an asterisk in the first column. This specification requiring logging in red of an alarm change of status was included by the specifications writer of the architect/engineers as a safety feature. Paragraph 16755-13(e) of the specifications requires that the log shall contain time in a 24 hour format to a tenth of a minute. The Harris bid proposes that the log shall be in seconds rather than tenths of a minute. The specifications require equipment delivery to the job site and substantial completion within 180 calendar days after receipt of Notice To Proceed. The specifications further provide for liquidated damages of $100 per day for each day the contractor fails to meet the above completion date. The Harris bid requested that the liquidated damages clause and the required time for completion be modified to provice that the 180 day period would not commence until all drawings had been approved by the architect/engineers. The architect/engineers, Reynolds, Smith and Hills, calculated that the required drawing time was approximately 60 days. Therefore, the Harris bid proposes that Harris would have 240 days instead of 180 days in which to deliver the equipment to the site and substantially complete the contract. The Harris bid proposed a deviation from the warranty provision of the specifications. The specifications in paragraph E-17 placed the final determination of the need for repairs or changes under the guarantee clause of the specifications with the architect/engineers and the owner. Harris proposes to alter those specifications and place the right of final determination as to the existence and cause of any claim defect with Harris. Harris' bid contained information setting forth their experience with the Micro II System, which is the system they proposed in their bid. That information shows that the Micro II System had been in use no more than two and one-half years at the time of the bid letting. In its evaluation of the bidders' proposals, based upon the data contained in the original bid packages, Reynolds calculated that the deviation from the specifications by Harris gave Harris at least a $10,135 advantage in its bidding (See Petitioner's Exhibit 8). That evaluation did not include a dollar value for the deviation from the specification concerning the warranty. In that evaluation Reynolds noted the failure of Harris to meet the supervisory point requirements. They calculated that this would add $3,900 to Harris' bid based on twelve locations at $300 per location. In fact, Harris failed to meet the requirements at eighteen locations, which at $300 per location, would add $5,400 to Harris' bid. Thus, using the evaluation figures of Reynolds, it appears that Harris' deviations from the specifications gave them at least an $11,635 advantage in the bidding. On October 9, 1975, Reynolds held a conference with each of the three bidders. At that conference Weston provided a list of three names, with addresses of customers for whom Weston had completed work similar to that proposed in its bid. Reynolds did not receive any material information from these references until after October 31, 1975. At least two of the references commented favorably on Weston's performance in letters to Reynolds dated January 13, 1976 and January 20, 1976, respectively. By letter dated October 31, 1975, Reynolds' project manager for this project conveyed the architect/engineers' recommendation for award to the Department. That recommendation was that the contract be awarded to Hathaway Instruments, Inc., for the base bid item only. The recommendation noted that the alternate should be rejected because the bids for the alternate were excessively high. As stated in the letter of recommendation, Reynolds rejected Harris' bid because "there were several major exceptions taken to the specification (sic), the most serious of which was their not being able to meet the delivery schedule." Also, as stated in the letter of recommendation, Weston's bid was apparently rejected because they "could not meet the experience qualifications as specified." Harris, at the time of the bid letting, had five years experience with its Micro I equipment but had only two and one-half years experience with its Micro II equipment. The two lines of equipment constitute two generations of equipment. Neither Harris nor Weston had five years experience with the specific equipment proposed in their bids. Both, however, have had five years experience with the general type system and equipment proposed with Harris being the more experienced of the two. Based upon the evidence presented Weston and Harris are both responsible bidders. In November, 1975, the Department directed Reynolds to contact Harris and determine whether Harris would conform their bid to the specifications. The project manager for Reynolds so contacted Harris and by letter dated November 17, 1975 (Petitioner's Exhibit 4), notified the Department that Harris stated they would deliver the equipment within the time required by the specifications. That letter reiterated Reynolds' recommendation of Hathaway as contained in their letter of October 31, 1975. Reynolds did not retreat from their recommendation of Hathaway and at the final hearing again stated that recommendation. Thereafter, the Department proposed to award the contract to Harris and set the matter for final decision on December 2, 1975. Harris' bid was a responsible offer but was not in full compliance with the bid specifications and conditions. The bids of Weston and Hathaway were responsible offers and were in full compliance with the bid specifications and conditions except as noted in paragraphs 4, 7 and 19 herein. Paragraph B-18 of the Specifications and Contract Documents (Petitioner's Exhibit 1) states that "No bid modification will be accepted after the close of bidding has been announced." Section A of the same document states that bids would be received until 2:00 p.m. EDST, on September 25, 1975. No evidence was presented which would show that the time for receiving bids was extended beyond that set forth above. Therefore, the close of bidding appears to have been at 2:00 p.m., EDST, September 25, 1975. The agreement by Harris to conform their bid to the specifications and conditions constituted a material modification of their bid. This modification occurred in November, 1975, after the close of bidding, and was therefore not allowable under the terms of the Specifications and Contract Documents set forth above. The lowest base bid and alternate bid of those responsible offers received in full compliance with the bid specifications and conditions was that of Weston. No evidence was presented which would show that the Department submitted its complete File on this matter to the Division of Purchasing along with its reasons for recommending a bid other than the low bid meeting specifications, as required by Section 13A-1.02(a), F.A.C.
