Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: In January of 1994, FDOT issued an Invitation to Bid ("ITB") for contracts FE2494Z1 and FE2494Z2 to provide storm shutters for the FDOT facilities in Zones 1 and 2 of the Florida Turnpike. The ITB was entitled "Storm Shutters, Removable, Manufacture, Furnish and Install." Prospective bidders for the contracts were provided with a packet which included General Conditions, Special Conditions, Specifications and General Special Provisions. The General Conditions set forth the procedures for submitting and opening the bids. The Specifications called for custom-sized removable storm shutters and detailed the materials and installation procedures that were required. The bid package contained the following pertinent language in the Special Conditions, Section 1.0, entitled "Description", and in the Specifications, Section 1.0, entitled "Scope of Work": Work under this contract consists of providing all labor, materials, equipment, tools and incidentals necessary to manufacture, furnish and install galvanized steel storm panels and accessories for all of Zone 1 & Zone 2 buildings and locations as identified in the building listing listings document, see Exhibit "A" Zone 1 & Exhibit "A" Zone 2. The bid package contained the following pertinent language in Special Conditions Section 8.1, entitled "Required Documents": Bidders are required to complete and return the State of Florida "Invitation to Bid" form as well as the bid sheet(s). These forms must be signed by a representative who is authorized to contractually bind the bidder. All bid sheets and the "Invitation to Bid" form must be executed and submitted in a sealed envelope. At a mandatory pre-bid conference on February 17, 1994, the Department's representatives were available to answer questions regarding the bid package. During the pre-bid conference, John Vecchio of the Department orally advised the prospective bidders that they should return the whole bid package, including the specifications, when they submitted their bid. No written amendment to this effect was issued. The bids were opened on March 3, 1994 in Fort Lauderdale. Bids were received for each contract from at least three bidders, including Accurate and Hurst. The apparent low bidder for both contracts was Broward Hurricane Panel Co. ("Broward"). Prior to the bids being posted on March 28, 1994, Broward's bid was determined to be nonresponsive and Broward was therefore disqualified. After Broward was disqualified, Accurate was the apparent low qualified bidder for Zone 2 and Hurst was the apparent low qualified bidder for Zone 1. Hurst's bid for the contract for Zone 2 was $85,000. Its bid for the Contract for Zone 1 was $36,000. Accurate's bids for the contracts were $84,854.82 and $36,287.16, respectively. Hurst was awarded the contract for Zone 1 and that decision has not been challenged. At the same time the Department announced the award of the Contract for Zone 1 to Hurst, the Department announced its intent to award the contract for Zone 2 to Accurate. Hurst timely filed a notice of protest and a formal written protest of the proposed award of the contract for Zone 2 to Accurate. Initially, FDOT raised as a defense that Hurst had not posted a protest bond as required by Section 287.042(2)(c), Florida Statutes. At the hearing in this matter, FDOT conceded that Hurst had subsequently posted a protest bond which had been accepted by FDOT. Hurst contends that Accurate's bid should have been deemed nonresponsive because Accurate does not have the ability to "manufacture" the specified product in its own facility. The 2 inch corrugated shutter required by the ITB has to be shaped on a special type of machine that rolls, presses and forms the metal. Hurst owns and maintains at its Opa-Locka facility a rolling mill capable of forming the panels to the bid specifications. Accurate is in the business of supplying the types of products sought by the ITB in this case. However, Accurate does not own the kind of machine necessary to shape the metal. The evidence established that for many years, Accurate has had a continuing business relationship with a local subcontractor, Shutter Express, that rolls, presses and forms raw material supplied by Accurate in accordance with Accurate's specifications. Shutter Express has the capability of fabricating shutters with a 2 inch corrugation in accordance with the ITB. Accurate is equipped to attach the headers and sills, drill the necessary holes, complete the assembly and install the final product. The ITB in this case did not preclude subcontracting any or all of the work specified. While the description of the work in the ITB includes the term "manufacture", this reference should not be read to mean that only those companies that were able to fabricate the entire product at their own facility could properly respond to the ITB. There is no logical justification for such a narrow interpretation. Only a few companies have the ability to completely fabricate the shutters on their own property. At the prebid conference, there was discussion amongst the prospective bidders about subcontracting the fabrication work and the FDOT representatives did not raise any objections to such an arrangement. It was widely understood by the parties present at the pre-bid conference that the Department was not interpreting the ITB in the restrictive manner now urged by Hurst. Such a reading of the ITB would have precluded from the bidding process a number of companies such as Accurate that routinely supply and install shutters. Hurst also contends that the bid proposal submitted by Accurate should be deemed nonresponsive because Accurate failed to include the entire ITB with its proposal in accordance with the oral instructions at the pre-bid conference. Hurst's proposals included the entire ITB. As discussed below, Accurate's proposal did not include the entire ITB. FDOT determined that all essential pages were included in Accurate's response and the evidence did not establish that this conclusion was arbitrary, capricious or fraudulent. Paragraph 6 of the General Conditions of the ITB provided: ADDITIONAL TERMS AND CONDITIONS: No additional terms and conditions included with the bid response shall be evaluated or considered and any and all such additional terms and conditions shall have no force and affect and are inapplicable to the bid. As noted above, at the prebid conference held on February 17, 1994, an FDOT employee told all prospective bidders to return the entire bid package when making their submittals. This request that the entire bid package be returned was simply meant as a protection for the bidder to ensure that all the necessary documents referenced in Section 8.1 of the Specifications were submitted. Other than those documents referenced in Section 8.1 of the Specifications, FDOT had no interest in having the remaining portion of the ITB submitted with a proposal. Accurate's submittal contained every document required by Section 8.1 of the Specifications. Accurate's proposal did not contain pages 3 through 12, 14, 15 and 17 through 20 of the ITB, but did include pages 1 and 2, 13, 16, 21 and 22 along with a signed Form PUR 7068 and a signed acknowledgment of Addendum In other words, the submittal contained a signed and completed Bidder Acknowledgment, completed Bid Price Forms for Zones 1 and 2, a signed copy of Addendum #1, a completed copy of the Ordering Instructions, and a signed, but not notarized, statement regarding public entity crimes. 1/ In addition to the "REQUIRED DOCUMENTS," set forth in Section 8.1 of the Specifications and quoted in Findings of Fact 6 above, the ITB included Section 8.2, "PUBLIC ENTITY CRIMES STATEMENT" which provides: Any person submitting a bid or proposal in response to this invitation should execute the enclosed form PUR 7068, SWORN STATEMENT UNDER SECTION 287.133(A), FLORIDA STATUTES, ON PUBLIC ENTITY CRIMES, including proper check(s) provided, and submit it with the bid/proposal or within 72 hours of the bid opening. Page 7 of the ITB provided in pertinent part: 10.0 BID PREFERENCE IDENTICAL TIE BIDS - Preference shall be given to businesses with drug-free workplace programs. Whenever two or more bids which are equal with respect to price, quality and service are received by the State or by any political subdivision for the procurement of commodities or contractual services, a bid received from a business that certifies that it had implemented a drug-free workplace program shall be given preference in the award process. . . . Accurate's proposal did not include a certification that it was a drug-free workplace in accordance with this provision. However, such a certification is only used by the Department as a tie-breaker. In other words, in the event of identical bids, any firm with a drug-free workplace would get preference. Since there were no tied bids in this case, certification was totally irrelevant. When the bids were opened, Mary Bailey, the contracts administrator for the Department, noticed that Accurate's submittal was thinner than the others and asked Accurate's representative, Richard Johnson, about the remaining pages. Mr. Johnson replied that the other pages were in his truck and offered to retrieve them. Ms. Bailey told him there was no need to do so. Section 10 of the General Conditions in the bid package provides as follows: As the best interest 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... It does not appear that Accurate has obtained any competitive advantage as a result of its failure to include the entire ITB with its bid proposals. Even if the oral instructions at the pre-bid conference are deemed to have modified the ITB so that the entire bid package should have been submitted, Accurate's failure to include the entire ITB with its response should be considered a minor technicality, pursuant to Section 10 of the General Conditions cited above, that can and should be waived in evaluating the responsiveness of the bid. Similarly, the failure to have the Form PUR 7068 notarized may have rendered Accurate's bid proposals incomplete, but not necessarily nonresponsive. This oversight can be easily corrected without giving Accurate a competitive advantage.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding the bid submitted by Accurate to be responsive and dismissing the challenge filed by Hurst. DONE and ENTERED this 24th day of June 1994, at Tallahassee, Florida. J. STEPHEN MENTON 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 24th day of June 1994.
The Issue Whether the Department’s action to reject all bids submitted in response to DOT-RFP-20-5003-DAA, relating to asbestos abatement, demolition, and removal services, is illegal, arbitrary, dishonest, or fraudulent.
Findings Of Fact Stipulated Facts (verbatim) The Department is an agency of the State of Florida tasked with procuring the services for Districtwide Asbestos Abatement and Demolition and Removal Services for Right of Way property under the Department’s supervision by law. The Department published a bid solicitation for DOT-RFP-20-5003- DAA, seeking bids to provide District Five Asbestos Abatement and Demolition and Removal Services for FDOT. The RFP included specifications, qualification requirements, instructions on what would be required of responders, a bid price proposal sheet, and the award criteria. Cross Construction and Cross Environmental submitted bids in response to the RFP. Cross Construction’s and Cross Environmental’s bids were evaluated by the Department. There is no debate, challenge, or disagreement raised in the Petitions with regard to the Technical Scores submitted by the responding firms to the RFP, only disagreement on three pay items. On June 15, 2020, the Department’s Selection Committee reviewed and discussed the information presented as to the Technical and Pricing scores of the Responding firms, asked for an additional bid item analysis, and indicated that it would reconvene at a future date for a decision. On June 22, 2020, the Selection Committee reviewed, discussed, and confirmed the recommendation presented by the results of the Technical Review Committee scorings and the Project Manager’s Bid Price analysis and selected Cross Construction and Cross Environmental as Intended Awardees. The Selection committee also found that Johnson’s Excavation and Services Inc., [Johnson] and Simpson Environmental LLC [Simpson] were deemed non-responsive due to irregular, and unbalanced pay items prices. On August 24, 2020, the Department’s Selection Committee decided to cancel the Procurement with the intent to readvertise with adjustments to the Scope and Pricing Structure and decided to reject all proposals. Additional Findings of Fact The “three pay items” referenced in paragraph six of the stipulated facts are the items that ultimately caused the Department to reject all bids in the instant dispute. The three pay items are collectively referred to as mobilization pay items. The RFP directs that bids are to contain two parts. Part I is the technical proposal, and Part II is the price proposal. Section 30.3 of the RFP provides that proposers “shall complete the Bid Price Proposal Form No. 2 and submit [the form] as part of the Price Proposal Package … [and that] [t]he Procurement Office and/or the Project Manager/TRC will review and evaluate the price proposals and prepare a summary of its price evaluation.” Five bidders submitted proposals in response to the RFP. One bidder did not advance beyond the initial review phase because its technical proposal did not meet minimum bid standards. The remaining bidders were CCS, CES, Simpson, and Johnson. Price proposals submitted by each of the remaining bidders were evaluated by the Department. Section 3 of the RFP provides a general outline of the process associated with awarding the contract. The steps are: “Pre-Proposal Conference; Public Opening (Technical Proposals); Price Proposal Opening & Intended Award Meeting; and, Selection Committee Meeting Summarizing Evaluations and Determining Anticipated Award.” The agenda for the “Price Proposal Opening & Intended Award Meeting,” as established by the RFP, provides as follows: Opening remarks of approx. 2 minutes by Department Procurement Office personnel. Public input period – To allow a reasonable amount of time for public input related to the RFP solicitation. At conclusion of public period, the Technical evaluation scores will be summarized. Announce the firms that did not achieve the minimum technical score. Announce the firms that achieved the minimum technical score and their price(s) as price proposals are opened. Calculate price scores and add to technical scores to arrive at total scores. Announce Proposer with highest Total Score as Intended Award. Announce time and date the decision will be posted on the Vendor Bid System (VBS). Adjourn. Section 30.4 b. of the RFP provides that a proposer can be awarded a maximum of 30 points for its price proposal. This section also provides that “[p]rice evaluation is the process of examining a prospective price without evaluation of the separate cost elements and proposed profit of the potential provider.” On June 15, 2020, the selection review committee met publicly for the purpose of opening price proposals and announcing an intended award. Price proposals were opened, and the eligible bidders received the following price scores: CCS - 11.09; CES - 13.22; Johnson - 19.76; and Simpson - 30. In terms of total score, which combined both the technical and price scores, Simpson received a score of 113.00, which was the highest score, followed by CES (107.55), CCS (103.76), and Johnson (101.76). After opening and considering the price proposals of the respective bidders, the selection committee did not announce an intended award at the meeting on June 15, 2020, but instead requested that the project manager “do further analysis on the pay items for any potential imbalance.” The project manager, through a staff member, performed the additional analysis and determined that Johnson and Simpson submitted “irregular, unbalanced pay items” which resulted in their respective bids being deemed non- responsive and thus not eligible for award. The “irregular, unbalanced pay items” are the three mobilization pay items at issue in the instant matter, and are identified on the bid price proposal sheet as items AB200, AB201, and AB202. Simpson bid $400 for item AB200, $100 for item AB201, and $50 for item AB202. Johnson bid $250 for item AB200, $250 for item AB201, and $100 for item AB202. CCS bid $1 for item AB200, $1 for item AB201, and $1 for item AB202. CES bid $1 for item AB200, 75 cents for item AB201, and 50 cents for item AB202. The Department, in evaluating the bidders’ mobilization pay items, considered costs associated with abatement two structures, a 1,500 and 2,250 square feet structure respectively. For the 1,500-square-foot structure, CCS’ AB200 mobilization costs totaled $1,500. For the 2,250-square-foot structure, CCS’ AB201 mobilization costs totaled $2,250. For the 1,500-square-foot structure, CES’ AB200 mobilization costs totaled $1,500. For the 2,250-square-foot structure, CES’ AB201 mobilization costs totaled $1,687.50. For the 1,500-square-foot structure, Johnson’s AB200 mobilization costs totaled $375,000. For the 2,250-square-foot structure, Johnson’s AB201 mobilization costs totaled $562,500. For the 1,500-square-foot structure, Simpson’s AB200 mobilization costs totaled $600,000. For the 2,250-square-foot structure, Simpson’s AB201 mobilization costs totaled $225,000. On June 22, 2020, the selection committee reconvened and announced CCS and CES as intended awardees of the contract. The Department also announced at this meeting that Johnson and Simpson were “deemed non- responsive due to irregular, unbalanced pay item prices.” On June 24, 2020, Simpson filed a Notice of Protest wherein the company informed the Department of its intent to formally protest the intended award of contracts to CCS and CES. On or about July 6, 2020, Simpson filed with the Department its “formal written petition of protest.” Although Simpson’s formal protest is dated July 6, 2020, CCS and CES contend that Simpson’s protest was actually filed on July 7, 2020, thereby making the protest untimely by a day. The Department did not refer Simpson’s formal protest to DOAH for final hearing, but instead considered the issues presented by Simpson in its protest and then attempted to negotiate a resolution with Simpson, CCS, and CES. Those efforts were unsuccessful. The question of the timeliness of the formal bid protest filed by Simpson is not before the undersigned. Nevertheless, the undisputed facts as to Simpson’s protest, as demonstrated by the record herein, are as follows. On June 24, 2020, Simpson filed notice of its intent to protest the RFP. On June 29, 2020, CCS received notice that a bid protest was filed with respect to the RFP. On July 1, 2020, CES filed a public records request “for public records related to the bid protest made to the” RFP. On or about July 6, 2020, Simpson filed its formal written protest with respect to the RFP, and although the evidence is not clear as to the date, it is undisputed that the Department received affidavits from Simpson explaining the factual circumstances surrounding the filing of the company’s formal written protest. On July 15, 2020, the Department notified CCS and CES that “in response to the Formal Written Protest filed by Simpson Environmental Services, the Department will hold a settlement conference” on Friday, July 17, 2020. On July 21, 2020, Simpson, CES, and CCS notified the Department that they “reached an agreed upon settlement proposal.” On August 11, 2020, the Department, after considering the settlement proposal for several weeks, notified Simpson, CES, and CCS that the Department would discuss the RFP at a public meeting to be held on August 24, 2020. As previously noted, it was during the meeting on August 24, 2020, when the Department announced that all proposals received in response to RFP were rejected. CES, on or about July 1, 2020, submitted to the Department a public records request wherein the company sought a copy of documents related to Simpson’s protest. In response to the request, the Department provided CES a copy of the formal written protest filed by Simpson. It is undisputed that the initial copy provided to CES by the Department did not show either the date or time of receipt of the document filed by Simpson. At some point after the settlement conference, the Department provided to CES a date and time stamped copy of Simpson’s formal written protest. There was no evidence presented explaining the circumstances or the process which resulted in the Department providing different copies of Simpson’s formal written protest to CES, and the remaining evidence does not provide a sufficient foundation to reasonably infer that the Department acted with nefarious motives when providing different versions of the documents to CES. Simpson’s formal protest contains the following statement with respect to the price proposal that the company submitted in response to the RFP: Petitioner’s individual bid price items were based in fact, were reasonable and were in conformity with standard industry rates for similar asbestos abatement and demolition and removal projects. Petitioner’s bid price items were also patently similar to bid price items that Petitioner has previously submitted in response to past FDOT proposal requests that ultimately resulted in the corresponding contracts having been awarded to Petitioner. Indeed, Petitioner has a longstanding relationship with the FDOT as Petitioner has previously contracted with FDOT as a vendor performing asbestos abatement services on numerous projects over the course of the past eight years. Petitioner’s price items for bid proposals have remained consistent for each of its past projects with FDOT. Petitioner’s price items for the instant bid proposal did not differ or vary in any material aspect from those proposed by Petitioner for previous projects that FDOT has deemed reasonable. Michelle Sloan works for the Department as a district procurement manager, and was assigned to manage the instant RFP. Ms. Sloan testified that because Simpson protested the Department’s intended decision to award the contracts to CCS and CES, and specifically referenced in its protest “that their bid for mobilization was in conformance with industry standards, as well as previous bids submitted to the agency that were deemed responsive,” she conducted additional review of the Simpson and Johnson bids. Ms. Sloan testified that after reviewing the RFP, the price sheets related thereto, Simpson’s protest, and the additional analysis of the pay items conducted following the June 15, 2020, selection committee meeting, she concluded that material ambiguities existed in the RFP’s mobilization pay items and recommended to the district secretary that the Department “reject all [bids] and re-advertise with a revised pricing sheet and instructions.” On August 24, 2020, the selection committee, following public notice, accepted Ms. Sloan’s recommendation, rejected all proposals, and canceled the procurement with the “intent to re-advertise with adjustments to the Scope and Pricing structure.” A review of the credible evidence demonstrates a rational basis for the conclusions reached by Ms. Sloan and members of the selection committee. Exhibit C of the RFP is titled “Price Proposal/Detailed and Contractual Price Sheet.” The first page of this document provides a general description of the asbestos removal and abatement pay items. The general pay items are as follows: AB100 Fees [as] determined from the Department of Environmental Protection based upon regulated material. AB200 One-time fee necessary to mobilize for full isolation, per parcel, when abatement with isolation is required. AB300 Fees to be charged by square feet for preparation [of] structure before abatement can commence. AB400 Fees to be charged by square feet, to abate asbestos from various surfacing material such as ceiling, walls, beams, plaster, sheetrock and fireproofing using conventional containment methods. AB500 Fees to be charged either by square foot, linear foot or fittings to abate asbestos from various mechanical systems such as boilers, stacks ducts, fittings, pipes, flutes and flanges. AB600 Fees to be charged either by square foot, linear foot or fittings to abate asbestos from various mechanical systems such as boilers, stacks, ducts, pipe, fittings and jackets which involve the use of a Glove bag. AB700 Fees to be charged by square foot, to abate asbestos from various roofing materials such as cement roof shingles, flashing, rolled roof, felts, wood shingles and mobile home coating. AB800 Fees to be charged by square foot or piece to abate asbestos from various materials such as floor tile, mastic adhesive, sheet vinyl, carpet, wood sub- floor, concrete sub-floor, vibrator dampers, wallboard, metal ductwork and sinks with insulation and heat shields (light fixture). AB900 Fees to be charge[d] by landfill for asbestos disposal. The bid price proposal sheet, which is form number 2 of the RFP, provides a listing of specific pay items related to the general “AB ---” items listed in Exhibit C to the RFP. Below is an example of some of the specific pay items listed on the bid price proposal sheet: [See table on next page] Item Number Description (A) Estimat ed Quantit y Unit (B) Unit Pric e Total Bid Amount (A x B) ASBESTOS REMOVAL ABATEMENT AB200 Mobilization for structures less than 2,000 Sq. FT. 1 SQ. FT. AB201 Mobilization for structures [from] 2001 – 5000 Sq. FT. 1 SQ. FT. AB202 Mobilization for structures over 5001 Sq. FT. 1 SQ. FT. AB300 Mask and Seal 1 SQ. FT. AB401 Remove ACM plaster/lathe including all surface materials 1 SQ. FT. AB501 Remove insulation from fittings 1 LF. AB603 Remove insulation from boilers, stacks or ducts piping 1 LF. AB703 Remove roofing cement 1 SQ. FT. AB810 Remove carpet and mastic adhesive 1 SQ. FT. AB820 Remove sinks with insulation 1 SQ. FT. AB901 Non-Friable 1 SQ. FT. General pay item category AB200, as described on Exhibit C, does not reference a “unit of measurement,” but instead notes that items within this category are to be determined on a “one-time – per parcel” basis. When the AB200 general pay item category is compared to the specific pay items for this category enumerated on the bid price proposal sheet (i.e., AB200, AB201, and AB202), it is evident that the unit of measurement “square feet” is listed as the basis for calculating the bid amount for this item when no such unit of measurement is stated for this item on Exhibit C. Comparatively, general pay item categories AB300 through AB800 each expressly references a specific unit of measurement (i.e., square foot, linear foot, or by the “piece”), and these units of measurement carry over to and are consistently reflected on the bid price proposal sheet for the specific pay items enumerated therein. By inserting a unit of measurement (i.e., square feet) in the mobilization pay items listed on the bid price proposal sheet, when the general description on Exhibit C instructs that they are “one-time, per parcel” pay items, the Department created a material ambiguity in the bidding process.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby Recommended that the Department of Transportation issue a final order in Case Nos. 20-4214 and 20-4216 finding that the rejection of all proposals in response to Request for Proposal RFP-DOT-20-5003-DAA was not illegal, arbitrary, dishonest, or fraudulent, and dismissing the two petitions. DONE AND ENTERED this 14th day of December, 2020, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN 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 14th day of December, 2020. COPIES FURNISHED: Douglas Dell Dolan, Esquire Florida Department of Transportation 605 Suwannee Street, MS 58 Tallahassee, Florida 32399-0458 (eServed) Richard E. Shine, Esquire Florida Department of Transportation 605 Suwannee Street, MS 58 Tallahassee, Florida 32399 (eServed) Brian A. Leung, Esquire Holcomb & Leung, P.A. 3203 West Cypress Street Tampa, Florida 33607 (eServed) Diane E. H. Watson, Esquire Cross Environmental Services, Inc. Post Office Box 1299 Crystal Springs, Florida 33524-1299 (eServed) Kevin J. Tibault, P.E., Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street, MS 57 Tallahassee, Florida 32399-0450 (eServed) Sean Gellis, General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street, MS 58 Tallahassee, Florida 32399-0450 Andrea Shulthiess, Clerk of Agency Proceedings Department of Transportation Haydon Burns Building 605 Suwannee Street, MS 58 Tallahassee, Florida 32399-0450 (eServed)
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made. On October 11, 1991, DOT's District Four office let out for bid district contracts E4551 and E4554. Contract E4551 calls for the mechanical sweeping of Interstate 95 in Broward County. Contract E4554 calls for the mechanical sweeping of Interstate 95 in Palm Beach County. At a mandatory pre-bid conference, the bidders for the Contracts were provided with a packet which included a Notice to Contractors and Standard Specifications. The Notice to Contractors is a four page document which is specific to each contract. The Standard Specifications are the same for all district contracts. Both the Notice to Contractors and the Standard Specifications to the bidders required bidders to submit proof of the ability to acquire a performance and payment bond in an amount equal to the contract bid price. Bidders could satisfy this requirement by submitting a bid guarantee of 5% of the bid, submitting a notarized letter of intent from a bonding company or by providing a Certificate of Qualification issued by Respondent. The Notice to Contractors for both Contracts provided as follows: Failure to provide the following with each bid proposal will result in rejection of the contractor's bid.... District contracts of $150,000 or less require the following as proof of ability to acquire a performance and payment bond: A notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a performance and payment bond in the amount of your bid, should your firm be awarded the project; in lieu of a notarized letter the following may be substituted: (1) a bid guarantee of five percent (5%); or (2) a copy of the Contractor's Certificate of Qualification issued by the Department. (No emphasis added) Similarly, the first Standard Specification provides: 1.1 Bidders (contractors) A contractor shall be eligible to bid on this contract if:... (2) Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the District Contract Administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of your bid, should your firm be awarded the project.... The requirement to submit proof of the ability to acquire a performance and payment bond has been imposed on the Districts by DOT Directive 375-00-001-a (hereinafter the "Directive".) This Directive was in place at all times material to this proceeding. Section 3.2.2 of the Directive provides: A contractor shall be eligible to bid if: ...Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the minicontract administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of the bid, should the firm be awarded the project. A bid guaranty as specified above may substitute as proof of ability to obtain a performance and payment bond. This applies to bids amount over or under $150,000. A copy of the Contractor's Certificate of Qualification issued by the Department may be substituted in lieu of a notarized letter for those contracts not requiring a bid bond. The bids for the Contracts were opened on October 11, 1991 in Fort Lauderdale, Florida. Bids were received from four bidders: CPM, SCA, Florida Sweeping, Inc. and P. F. Gomez Construction Co., Inc. In its bid proposals, SCA included executed bid bonds in an amount sufficient to cover the amount of each bid proposal. Each bid bond cost $55.00. CPM did not submit executed bid bonds with its proposals. Instead, CPM submitted letters from Mark A. Latini dated September 25, 1991. Those letters were provided on the stationery of Bonina-McCutchen-Bradshaw, Insurance and indicate that Mr. Latini is the "bond manager." The letters provide as follows: Amwest Surety Insurance Company is the surety for the above-referenced contractor and stands ready to provide the necessary performance and payment bond for the referenced bid should Certified Property Maintenance, Inc., be low and awarded the referenced contract. All bonds are subject to normal underwriting requirements at the time of the bond request.... The letters submitted by CPM with its bid proposals were not notarized and were not binding obligations to issue bonds since they were conditioned upon meeting certain unspecified underwriting requirements at the time of the bond requests. The submitted bids were reviewed by the District Four Contractual Services Office. The bids submitted by CPM were the lowest for each contract. Its bid for Contract No. E4551 was $109,343.97. Its bid for Contract No. E4554 was $30,312.63. SCA's bids for the Contracts were $139,442.14 and $44,100.00, respectively. During the initial review of the bid proposals, the Contractual Services Office rejected CPM's bids for failure to have its bonding company "letters of intent" notarized. In addition, the bid proposals submitted by Florida Sweeping, Inc. were rejected for failure to note a required addendum and the bids submitted by P. F. Gomez Construction Co., Inc. were rejected because the "proposal bond was not of proper character". On October 18, 1991, DOT posted its Notice of Intent to Award the Contracts to SCA, the only bidder for the Contracts whose proposals had not been rejected. CPM timely filed protests of the proposed awards to SCA on October 22, 1991. The protests filed by CPM argued that its bids should not have been invalidated simply because the bonding company's letters did not include notary seals. At this point, the sole basis for the disqualification of CPM's bids was the failure to have the bonding company letters notarized. Respondent contends that, except for the absence of the notary seal, the letters submitted by CPM met the requirements of the Notice to Contractor and the Standard Specifications cited above. However, those letters are equivocal and do not evidence a binding commitment to issue a bond upon award of the contract. The DOT officials admit that they do not know what "normal underwriting requirements" would or could be required by CPM's bonding company. This conditional language makes it uncertain whether CPM could obtain the necessary bond. Therefore, it is concluded that those letters do not meet the requirements of the Notice to Contractors, the Standard Specifications or the Directive. A hearing on CPM's protest was not held. CPM's president, Raymond Hanousek, who prepared CPM's bid and attended the pre-bid meeting, called DOT's District office the day the bids were opened and was informed that his company's bid was low, but was rejected because its bond commitment letter was not notarized. Mr. Hanousek spoke with Joseph Yesbeck, the District's Director of Planning and Programs. After their conversation, Mr. Yesbeck reviewed the file and met with Teresa Martin, the District's contract administrator for construction and maintenance contracts, and other members of the contracting staff. Ms. Martin explained why CPM's bid had been disqualified, and the matter was thereafter discussed with the District and Department attorneys. After reviewing the situation, Mr. Yesbeck determined that the failure to submit notarized letters should be considered a non-material deviation and the bids submitted by CPM should be accepted and considered the low responsive bids. Mr. Yesbeck concluded that the absence of the notary seal did not give any competitive advantage to CPM and that defects of this nature are routinely allowed to be cured. Therefore, he reversed the contract administrator's decision to disqualify CPM on both Contracts. The District secretary concurred in the decision reached by Mr. Yesbeck to repost the award of the Contracts. Mr. Yesbeck prepared a joint letter of reposting which removed CPM's disqualification and declared CPM to be the low bidder for both Contracts. At the time Mr. Yesbeck made his decision, he had not reviewed the Directive from the Assistant Secretary's office stating that there must be a notarized letter showing proof of ability to obtain a performance and payment bond. Mr. Yesbeck did not review the Directive until his deposition was taken one week prior to the hearing in this case. According to Ms. Martin, the option to provide a notarized letter from a bonding company as an alternative to the posting of a 5% bid guarantee or obtaining prequalification was designed to promote participation in state contracting by small business and minority business enterprise applicants. While DOT was apparently trying to make it easier and cheaper for companies to bid by not requiring a bond to be posted, the DOT Directive and the bid documents still clearly required unconditional proof that a bid bond would be issued if the contract was awarded to the bidder. CPM was not prequalified nor did it post a bond. Thus, in order to meet the requirements of the Notice to Contractors and the Standard Specifications, CPM's only option was to submit a notarized letter showing proof of ability to obtain a performance and payment bond. DOT was never provided with any proof that CPM had been prequalified by the bonding company for a bond and/or that a bond would unconditionally be issued if CPM was awarded the Contracts. Because the letters stated they were "subject to normal underwriting requirements at the time of the bond request", there was some possibility CPM would not be able to obtain a bond. Such a condition was not permissible under the bid doucments. The decision to accept CPM's bid was contrary to the DOT Directive, the Notice to Contractors and the bid specifications which require that a bidder demonstrate proof of ability to obtain a performance and payment bond. Consequently, it is concluded that DOT's decision to accept the conditional, unnotarized letters submitted by CPM was arbitrary and capricious. There is some indication that other DOT Districts have, on occasion, waived the notarization requirement for the bond letter. However, it is not clear whether the language in the bid documents was the same or similar in those cases and/or whether the bond letters were conditional. In the past, whenever District Four has gotten a bid without a notarized bond letter, the bid was rejected. Apparently, there has never been a protest based on such a denial in District Four. Under Section 337.18, DOT does not need to require notarized, unconditional bond letters on contracts under $150,000. Indeed, there was a suggestion that some DOT Districts have dropped the requirement for certain contracts under $150,000. However, the bid documents in this case clearly required some proof that the bidder could acquire a performance and payment bond upon award of the Contracts. It was incumbent for all bidders to meet this requirement. It was arbitrary to delete this requirement after the bids were submitted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding the bids submitted by CPM to be non-responsive and rejecting those bids. Petitioner should enter into negotiations with SCA regarding the award of the contract. In the absence of a favorable negotiation, Petitioner should enter a Final Order rejecting all bids and opening the Contracts up for new bids. DONE and ENTERED this 24th day of March, 1992, at Tallahassee, Florida. J. STEPHEN MENTON 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 24th day of March, 1992.
The Issue Whether the Department of General Services should award state contracts for "walk-up convenience copiers" to Xerox Corporation in categories where Xerox was the only responsive bidder, or should reject Xerox's bid and solicit new bids on grounds that competitive bids were not received and there is no basis or excepting the award from competitive bid requirements; Whether the Department should disqualify Xerox's bid in one category for alleged material deviation from bid specifications where Xerox failed to initial a change in its bid price.
Recommendation Based on the foregoing, it is RECOMMENDED: That DGS reject Xerox's single responsive bids and readvertise; and That Xerox's bid for category Group-I, Type 3, Class 12, monthly rental acquisition plan, be rejected as nonconforming. DONE and ENTERED this 11th day of July, 1984, in Tallahassee, Florida. R. L. CALEEN, JR. 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 11th day of July, 1984.
The Issue Whether Respondent properly rejected Petitioner's bid on the grounds that the bid did not meet a fatal item requirement.
Findings Of Fact On April 24, 1992, Respondent published a Request for Proposals (RFP) for the provision of housekeeping services to South Florida State Hospital. Attached to the RFP as Appendix I was a blank copy of Respondent's "Standard Contract" which is also referred to as its "core model contract". Paragraph 1.a. of Section D of the RFP contains the following instructions to bidders: BIDDER RESPONSE a. State of Florida Request for Proposal Contractual Services Acknowledgment Form, Pur 7033 The State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, Appendix II must be signed and returned ... with the proposal or submitted by itself if you choose not to submit a proposal and wish to remain on the department's active vendor list. Paragraph 1.g. of Section D of the RFP, contains the following instructions to bidders: Required Bidders Certification Contract Terms and Conditions The proposal must include a signed statement in response to the RFP indicating acceptance of the terms and conditions of provisions of service as specified in the RFP and contained in the core model contract. Bidders were provided a copy of the RFP rating sheet which contained the following under the heading of Fatal Items: The following criteria must be met in order for the proposal to be considered for evaluation, failure to receive a "Yes" response for any time [item] will result in automatic rejection of the proposal. * * * Does the proposal include a statement agreeing to terms and conditions set forth in the core model contract and the RFP? Petitioner was represented at a "Bidders' Conference" held May 15, 1992, at which the fatal items were discussed. Bidders were advised that it would be necessary for the responses to contain a statement agreeing to the terms and conditions set forth in the core model contract. The State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, contains the following certification: I certify that this proposal is made without prior understanding, agreement, or connection with any corporation, firm, or person submitting a proposal for the same contractual services, and is in all respects fair and without collusion or fraud. I agree to abide by all conditions of this proposal and certify that I am authorized to sign this proposal for the proposer and that the proposer is in compliance with all requirements of the Request for Proposal, including but not limited to, certification requirements. In submitting a proposal to an agency for the State of Florida, the proposer offers and agrees that if the proposal is accepted, the proposer will convey, sell, assign or transfer to the State of Florida all rights, title and interest in and to all causes of action it may now or hereafter acquire under the Anti-trust laws of the United States and the State of Florida for price fixing relating to the particular commodities or services purchased or acquired by the State of Florida. At the State's discretion, such assignment shall be made and become effective at the time the purchasing agency tenders final payment to the proposer. The State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, was signed by Richard A. Cosby on behalf of Petitioner and submitted as part of Petitioner's response to the RFP. Upon receipt of all responses, Respondent convened an evaluation committee to evaluate the responses. The evaluation committee determined that the response submitted by Petitioner did not contain the required statement agreeing to the terms and conditions set forth in the core model contract and the RFP. Consequently, the evaluation committee rejected Petitioner's proposal from further consideration. Petitioner does not challenge the specifications of the RFP, but, instead, asserts that Mr. Cosby's execution of the State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, was sufficient to meet the requirement the evaluation committee found lacking. The language of the Contractual Services Acknowledgment Form, PUR 7033, that most closely approximates the certification that the bidder accepts the terms and conditions set forth in the core model contract and of the RFP is as follows: I agree to abide by all conditions of this proposal and certify that I am authorized to sign this proposal for the proposer and that the proposer is in compliance with all requirements of the Request for Proposal, including but not limited to, certification requirements. The proposal submitted by Petitioner did not contain any other statement which could be construed as accepting the terms and conditions set forth in the core model contract and the RFP. The broad language of the Contractual Services Acknowledgment Form, PUR 7033, upon which Petitioner relies does not state that the bidder accepts the terms and conditions set forth in the core model contract and the RFP. The evaluation committee properly determined that Petitioner's response failed to meet this fatal item. In this proceeding, there was evidence that the Respondent routinely inserts in its Request for Proposals the fatal item requirement that the bidders agree in writing to accept the terms and conditions set forth in the core model contract and the RFP, and that Respondent has never waived that fatal item requirement. There was no evidence that Respondent was using this fatal item requirement to discriminate against or in favor of any bidder.
Recommendation Based upon the foregoing findings of fact and conclusion of law, it is hereby RECOMMENDED that the Respondent dismiss Petitioner's bid protest. DONE AND ENTERED this 18th day of August, 1992, 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 18th day of August, 1992. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 92-4311BID The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner. 1. The proposed findings of fact submitted by Petitioner are accepted in material part by the Recommended Order. Petitioner's conclusions based on those facts are rejected for the reasons discussed in the Recommended Order. The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent. 1. The proposed findings of fact submitted by Respondent are adopted in material part by the Recommended Order. COPIES FURNISHED: Richard A. Cosby, Vice President National Cleaning of Florida, Inc. 1101 Holland Drive, #32 Boca Raton, Florida 33487 Colleen A. Donahue, Esquire District 10 Legal Office Room 513 201 West Broward Boulevard Fort Lauderdale, Florida 33301-1885 Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Slye, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact On September 1, 1989, Respondent issued to prospective bidders an Invitation to Bid on an electronic mailing machine pursuant to the specifications contained in the Invitation to Bid. The specifications provided that the equipment was to include a postage meter with a "postage by phone" feature. The postage by phone feature allows postage for the electronic mailing machine to be secured by a telephone call to the post office. Bids from Pitney Bowes, Inc., Petitioner, and American Business Products, Inc. were received in response to the Invitation to Bid. The bid opening was held September 29, 1989. The bid from Pitney Bowes was selected by Respondent as being the responsive low bid. The bid from Petitioner and the bid from American Business Products, Inc. were rejected as being unresponsive. Acting on the recommendation from the Superintendent and his staff, Respondent voted at its regular meeting on November 1, 1989, to accept the bid from Pitney Bowes. Thereafter, Petitioner filed a timely, formal bid protest that was based on two grounds. First, Petitioner contends that the bid was single sourced because the bid specifications were drafted so that only Pitney Bowes could file a responsive bid. Second, Petitioner contends that the bid of Pitney Bowes was not responsive. The invitation for bid provides, in pertinent part, that the electronic mailing machine with power1 stacked and console: ... shall be capable of processing up to 210 envelopes per minute; ... shall be equipped with conveyor stacker able to hold up to 900 envelopes; ... The invitation for bid provides, in pertinent part, that the postage meter with postage by phone feature: ... shall have automatic accounting functions; ... shall be interchangeable with Pitney Bowes Model 5600, mailing machine. After the Invitation to Bid was issued, Respondent learned that only a postage meter manufactured by Pitney Bowes could meet the specification that the postage meter with the postage by phone feature be interchangeable with a Pitney Bowes Model 5600. Petitioner contends that the inclusion of this requirement results in a single source bid because only Pitney Bowes, Inc. is capable of submitting a responsive bid. The requirement that the postage meter with the postage by phone feature be interchangeable with the Pitney Bowes Model 5600 had no bearing on Petitioner's bid being rejected by Respondent. The evidence failed to establish that Petitioner, or any other bidder, was prejudiced by this requirement being included in the bid specifications or that Pitney Bowes was given an unfair advantage in the bidding process. Although Respondent had a valid purpose in including this requirement among the bid specifications, it took no steps to enforce this requirement to the prejudice of the bidders. Petitioner also contends that the invitation to bid is a single source bid because the term "postage by phone" is a trademark of Pitney Bowes, Inc. There was no evidence that any bidder was prejudiced by the use of this term or that Pitney Bowes, Inc. was given an unfair advantage in the bidding process by the use of this term. The machine Petitioner's company offered did not have a postage meter with a postage by phone feature as required by the bid specifications. For that reason, Petitioner's bid was found to be not responsive. The machine Petitioner's company offered is scheduled to add a postage by phone feature in early 1990, but it did not offer this feature at the time Petitioner's response to the Invitation to Bid was submitted. Postage by phone is a feature offered by Pitney Bowes and other companies. Petitioner contends that the electronic mailing machine offered by Pitney Bowes, Inc. is not capable of processing 210 envelopes per minute and that it is not equipped with a conveyor stacker able to hold up to 900 envelopes. Petitioner further contends that the postage meter offered by Pitney Bowes, Inc. does not have automatic accounting functions. The evidence does not support these contentions. The bid submitted by Pitney Bowes, Inc. meets all specifications of the Invitation to Bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the School Board of Palm Beach County enter a final order which rejects the bid protest filed by Complete Business Systems and which accepts the bid of Pitney Bowes, Inc. DONE AND ENTERED this day 12th day of January, 1989, 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 12th day of January, 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE NUMBER 89-63I4BID The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent. The proposed findings of fact in paragraph 1 are adopted in material part by paragraphs 1 and 2 of the Recommended Order. The proposed findings of fact in paragraph 2 are adopted in material part by paragraph 3 of the Recommended Order. The proposed findings of fact in paragraph 3 are adopted in material part by paragraphs 4 and 5 of the Recommended Order. The proposed findings of fact in paragraph 3 are rejected, in part, as being unnecessary to the conclusions reached. The proposed findings of fact in paragraph 4 are adopted in material part by paragraph 10 of the Recommended Order. The proposed findings of fact in paragraph 5 are adopted in material part by paragraph 6 of the Recommended Order. The proposed findings of fact in paragraph 6 are rejected as being a conclusion of law. The proposed findings of fact in paragraph 7 are adopted in material part by paragraph 9 of the Recommended Order. COPIES FURNISHED: Mr. Robert Papes Secretary and Treasurer Complete Business Systems, Inc. Post Office Box 24627 West Palm Beach, Florida 33416-4627 Robert A. Rosillo, Esquire School of Palm Beach County Post Office Box 24690 West Palm Beach, Florida 33416-4690 Thomas J. Mills Superintendent of Schools The School Board of Palm Beaten County, Florida Post Office Box 24690 West Palm Beach, Florida 33416-4690
The Issue At issue in this proceeding is whether the Department of Environmental Protection's decision to reject all bids submitted for the project entitled BDRS 52-01/02 was illegal, arbitrary, dishonest, or fraudulent.
Findings Of Fact Parties Petitioner, All America Homes of Gainesville, Inc. (All America), is a corporation doing business in the State of Florida. All America submitted a timely written bid in response to the Department's ITB and filed timely protests to the Department's actions. The Respondent, the Department of Environmental Protection, is an agency of the State of Florida which manages and operates state parks under its jurisdiction, and solicits construction projects in state parks, pursuant to Chapter 258, Part I, Florida Statutes, through its Division of Recreation and Parks, Bureau of Design and Recreation Services. The ITB In November, 2001, the Department issued an ITB on a construction project entitled Hillsborough River State Park Concession Building, project number BDRS 52-01/02. The ITB included the Bid Specifications for the project. Bids were required to be submitted no later than 3:30 p.m. on Tuesday, December 18, 2001, at the Bureau's Tallahassee, Florida, office. The written Specifications define several terms, including, but not limited, to the following: ADDENDUM: A written explanation, interpretation, change, correction, addition, deletion, or modification, affecting the contract documents, including drawings and specifications issued by the OWNER [Department] and distributed to the prospective Bidders prior to the bid opening. ALTERNATE BID: Separate optional bid item for more or less project requirement used for tailoring project to available funding. Also may consist of alternate construction techniques. BASE BID: Formal bid exclusive of any alternate bids. BID FORM: The official form on which the OWNER requires formal bids to be prepared and submitted. ORAL STATEMENTS: Verbal instruction. NOTE: No oral statement of any person, whomever shall in any manner or degree modify or otherwise affect the provisions of the contract documents.[1] SEALED BID: The formal written offer of the Bidder for the proposed work when submitted on the prescribed bid form, properly signed and guaranteed. The Bid Specifications also contained the following relevant sections: Alternatives If the OWNER wishes to learn the relative or additional construction cost of an alternative method of construction, an alternative use of type of material or an increase or decrease in scope of the project, these items will be defined as alternates and will be specifically indicated and referenced to the drawings and specifications. Alternates will be listed in the bid form in such a manner that the Bidder shall be able to clearly indicate what sums he will add to (or deduct from) his Base Bid. The OWNER will judge for himself that such alternates are of comparable character and quality to the specified items. The Order of the alternate may be selected by the Department in any sequence so long as such acceptance out of order does not alter the designation of the low bidder. ADDENDA If the Consultant[2] finds it would be expedient to supplement, modify or interpret any portion of the bidding documents during the bidding period, such procedure will be accomplished by the issuance of written Addenda to the bidding documents which will be delivered or mailed by the OWNER'S Contracts section to all bidders who have requested bidding documents. Interpretation No interpretation of the meaning of the drawings, specifications or other bidding documents and no correction of any apparent ambiguity, inconsistency or error therein will be made to any Bidder orally. Every request for such interpretation or correction should be in writing, addressed to the Consultant. All such interpretations and supplemental instructions will be in the form of written Addenda to the bidding documents. Only the interpretation or correction so given by the Consultant in writing and approved by the OWNER shall be binding, and prospective Bidders are advised that no other source is authorized to give information concerning, or to explain or interpret, the bidding documents. B-16 Bid Modification Bid modification will be accepted from Bidders, if addressed as indicated in Advertisement for Bids and if received prior to the opening of bids. No bid modification will be accepted after the close of bidding has been announced. Modifications will only be accepted if addressed in written or printed form submitted with the bid in sealed envelopes. Telegrams, facsimiles, separate sealed envelopes, written on printed modifications on the outside of the sealed envelopes will not be accepted. All bid modifications must be signed by an authorized representative of the Bidder. Modification will be read by the OWNER at the opening of formal bids. B-21 Rejection of Bids The OWNER reserves the right to reject any and all bids when such rejection is in the interest of the State of Florida, and to reject the bid of a bidder who the OWNER determines is not in a position to perform the work. B-23 Award of Bid . . .The qualified Bidder submitting the lowest bid will be that Bidder who has submitted the lowest base bid plus any selected alternates. . . . The OWNER reserves the right to waive any minor irregularities in bids received when such waiver is in the interest of the OWNER. The Award of Bid will be issued by the OWNER only with responsible Bidders, found to meet all requirements for Award of Bid, qualified by experience and in a financial position to do the work specified. Each bidder shall, if so requested by the OWNER, present additional evidence of his experience, qualifications and ability to carry out the terms of the Agreement. (Emphasis in original, except for Section B-10.) The Bid Form is included with the Specifications and provides in part: Base Bid: Furnish labor, equipment, Lump Sum $ supervision and material to construct a new concession building of 2940 square feet located at the Hillsborough River State Park along with the alteration of the existing concession building according to plans and specifications. Alternate #1: Furnish labor, equipment, Add Amt.$__ supervision and material to renovate the existing concession building according to plans and specifications. There is a separate section for "Allowances," i.e., Section 01210, for the Hillsborough State Park. This section provides in part: SECTION 01210 – ALLOWANCES * * * 1.2 SUMMARY This Section includes administrative and procedural requirements governing allowances. Certain materials and equipment are specified in the Contract Documents and are defined by this [sic] specifications as material and labor to be provided against a pre-determined allowance. Allowances have been established in lieu of additional requirements and to defer selection of actual materials and equipment to a later date when additional information is available for evaluation. If necessary, additional requirements will be issued by Change Order. * * * 3.3 SCHEDULE OF ALLOWANCES A. Allowance #1: Include in the base bid an allowance for the purchase and installation of. . . kitchen equipment. . . . The total dollar amount of the allowance to be included shall be $12,000.00. There is also a separate section for "Alternates," i.e., section 01230, for Hillsborough River State Park, which provides in part: SECTION 01230 – ALTERNATES * * * 1.3 DEFINITIONS Alternate: An amount proposed by bidders and stated on the Bid Form for certain work defined in the Bidding Requirements that may be added to or deducted from the Base Bid amount if OWNER decides to accept a corresponding change either in the amount of construction to be completed or in the products, materials, equipment, systems, or installation methods described in the Contract Documents. The cost or credit for each alternate is the net addition to or deduction from the Contract Sum to incorporate alternate into the Work. No other adjustments are made to the Contract Sum. . . . . 3.1 SCHEDULE OF ALTERNATES A. Alternate No. 1: Renovate the existing concession building in its entirety as shown in the drawings and specified herein. (emphasis added.) At this stage of the bidding documents, the contractor/bidder is requested to provide a Base Bid/Lump Sum on the Bid Form to "[f]urnish labor, equipment,. . .to construct a new concession building," and to provide an additional and separate amount for Alternate No. 1 to "[f]urnish labor, equipment, . . . to renovate the existing concession building." On December 13, 2001, the Bureau issued "Addendum No. One (1)" (written by the architect) to the ITB on the "Hillsborough River State Park – Concession Building." The Addendum contained the following relevant sections: Specification Section 01210: Allowances Add the following new paragraph 3.3.B: ”Allowance #2: Include in the base bid an allowance for the renovations of the existing concession building; renovations shall be defined by the Owner. The total dollar amount of the allowance to be included shall be $25,000." Specification Section 01230: Alternates Modify paragraph 3.1.A. as follows: "Alternate No. 1: Renovate the existing concession building as defined by the Owner, and as provided for under Section 01210, Allowances." (emphasis added.) Each contractor was required to sign the Addendum and attach it to the bid. By definition, and pertinent here, an addendum is an additional written instruction to a contractor during the bidding process. Based on the weight of the evidence, the purpose of this Addendum was to require the contractor to include a $25,000.00 Allowance (for Allowance # 2) in the Base Bid, for the work which might be performed if the Department requested the work to be performed for Alternate No. 1, i.e., for the renovation of the existing concession building.3 (The Department's architect decided it would cost approximately $25,000.00 to renovate the existing concession building, hence Allowance # 2.) In other words, the Addendum does not have a specific dollar amount to be included for Alternate No. 1. Rather, the $25,000.00 is an Allowance for the work described as Alternate No. 1, but the amount is to be included in the Base Bid and not as a separate line item, dollar amount. But, importantly, the Addendum did not delete the potential work to be performed as described in Alternate No. 1, although Mr. Bowman and others believed that the Addendum deleted Alternate No. 1. It deleted the necessity to place a specific dollar amount on the Bid Form for Alternate No. 1. (Mr. Bowman is a registered Professional Engineer and a licensed contractor. He has worked for the Department for 15 years and has served as Bureau Chief for two years. He supervises the contract section and the design section, which was responsible for preparing the technical plans and specifications and bidding out the job.) Mr. Bowman offered the following explanation why he believed the Addendum was confusing: Okay. I think the confusion that was created, you know, I think the addendum in itself, you know, said add $25,000 to the base bid, but then on the bid form, it still had the space down there for alternate number one, which alternate number one, which alternate number one had become $25,000 that was to be allowed for the concession building, and I think that's where the confusion came in because I think they were still confused, that they weren't really sure that they should not put that 25 down there but they knew they had been told in the addendum to do it and I think that's the reason for the notes and we got to the correspondence on the bid form, was they wanted to make sure that that's what we were wanting to do. And I think that's where the confusion came in. Like I said, it's always, if you could go back and do it again, it would be much wiser just to issue a whole new bid form and then we wouldn't be here today. But, we didn't do that. Okay. So, that's why we are here. The language in this Addendum, when read with the original Bid Specifications, apparently caused confusion with some of the bidders on the project. Several bidders called Marvin Allen (an architect and project manager for the Department's Bureau of Design and Recreation Services) prior to the submission of the bids, to clarify how the $25,000.00 Allowance should be shown on the Bid Form. (Mr. Allen did not author any of the specifications, including the Addendum.) He was listed as a contact person. He did not contact any bidders. But, Mr. Allen recalled telling each bidder who asked that the Allowance of $25,000.00 should be included in the Base Bid. But, he does not recall the names or numbers of the bidders who called, "possibly" three, four or five. Mr. Allen believed the Addendum was clear. According to Mr. Allen, the bidders who called him found the Addendum confusing. The oral responses to the bidders can be construed as interpretations of the Addendum. However, pursuant to Section B- 10 of the Specifications, any such interpretations were required to "be in the form of written Addenda to the bidding documents." Also, any such questions should have been in writing. If Section B-10 were complied with, all bidders would have been potentially on the same footing, or, at the very least, would have had access to a written clarifying document. Opening of the Bids On December 18, 2001, the bids were opened by Mike Renard, Contracts Manager with the Bureau of Design and Recreation Services, and Susan Maynard, Administrative Assistant. Mr. Dwight Fitzpatrick, a representative of All America, also attended the bid opening. The Bid Form submitted by Nelco showed a Base Bid of $355,478.00 (Lump Sum $355,478.00), and also showed an amount of $25,000.00 on the Alternate # 1 line (Add Amt. $25,000.00). See Finding of Fact 6. (It was clear to Mr. Renard that the $25,000.00 should have been included on Nelco's Base Bid. But Mr. Renard believed that Nelco submitted a responsive bid because the Department only accepted the Base Bid. Mr. Bowman agreed.) Nelco was the only one of five bidders to have a dollar amount in the Alternate #1 line under "Add Amt. $ ." All America submitted the second lowest Base Bid of $362,000.00. There was also a hand-written note on the All- America Bid Form that stated: "Addenda # 1 instruction to place $25,000 allowance in both Base Bid and as alternate # 1." Another hand written note was located below the "Add Amt. $-0-" line: "amount added in Base Bid with $25,000 allowance per Marvin Allen." The Department considered All America's bid responsive. It is a fair inference that three out of five of the other Bid Forms contained language indicating that the bidders were relying on Addendum No. One by placing the $25,000.00 Allowance in the Base Bid.4 It is uncertain whether they did so in light of the instructions of Mr. Allen concerning how to complete the Bids Forms. However, given the nature of the calls to Mr. Allen, there is a reasonable inference that there was some confusion among some of the bidders. The Department determined that Nelco submitted the lowest Base Bid, but the Department's staff had a question as to whether Nelco had included the $25,000.00 in its Base Bid. After conferring with his superiors, Mr. Renard was instructed to call Nelco to make certain that its Base Bid included the Allowance amount ($25,000.00). Mr. Renard spoke with Steve Cleveland, Nelco's Project Manager, "to verify the fact that [Nelco] had the allowance in their base bid." Mr. Cleveland orally confirmed that Nelco's Base Bid included the $25,000.00 Allowance. Mr. Renard asked Mr. Cleveland to send him a letter verifying this statement. Mr. Renard viewed this inquiry as a request for clarification or verification, not an opportunity for Nelco to modify its bid. Mr. Bowman agreed. (Mr. Renard did not believe Addendum No. 1 was confusing.) In a letter dated December 20, 2001, Mr. Cleveland confirmed that Nelco’s Base Bid of $355,478.00 included the Allowance amount and that Nelco could still perform the contract if the $25,000 Allowance was removed from its Base Bid pursuant to the ITB, i.e., that Nelco would perform the contract for $355,478.00 less $25,000.00, or $330,478.00, if the Department did not accept Alternate # 1 and the Allowance. (An alternate does not have to be accepted by the Department.) According to Mr. Renard, Mr. Cleveland never mentioned modifying, changing, or altering Nelco's bid. The Department only accepted the Base Bid for each bid. Mr. Renard did not consider it unusual to call a bidder or contractor to verify information to determine whether they can or cannot perform the work at the stipulated price. He considered it common to make this inquiry. Also, it was common in Mr. Bowman's experience to call a bidder to get clarification. Mr. Renard was not aware of any statute or rule which authorizes the Department to request clarification from a bidder after the bids are opened. Mr. Renard was more familiar with the bid forms than Mr. Allen. After receiving Mr. Cleveland's letter, the Department determined that Nelco submitted the lowest Base Bid and that the $25,000.00 amount that Nelco wrote on the Bid Form Alternate # 1 line, was a minor irregularity in the bid which the Department, as the Owner, could waive pursuant to the ITB. On December 20, 2001, the Department posted the Tabulation of Bids showing the anticipated award of the contract to Nelco. At the hearing, an unsigned letter on Department letterhead was introduced, which was addressed to Nelco and stated that Nelco submitted the apparent low bid. However, Mr. Renard testified that these letters are prepared routinely, but not mailed out without his signature. Mr. Renard did not recall signing the letter or ever sending out such a letter to Nelco. On December 21, 2001, the Department received a Notice of Intent to Protest letter from Allen E. Stine, the President of All America. In his letter, Mr. Stine stated that Nelco’s bid should have been rejected for failure to follow the specified format as per Addendum No. 1, or adjusted to have the $25,000.00 amount added to their Base Bid. Bid Protests All America filed a written formal bid protest on January 4, 2001. On January 9, 2001, Cindy Otero of All America, notified Mr. Renard by letter, and stated that Mr. Stine was available for a hearing regarding the bid protest. On January 28, 2002, Mr. Renard returned All America's check for the bond, stating that it was unnecessary. Mr. Stine recounted a number of unanswered telephone calls after the first protest was filed. During one conversation, Mr. Renard recalled Mr. Stine saying to him, "You can't do this, you can't do this." After receiving the first formal protest, the Department staff consulted with legal staff and reviewed the documents and bid procedures. Based on the number of questions received concerning the Addendum and the hand-written notes on several of the bid forms, Mr. Bowman, Bureau Chief, determined that the bid documents were confusing and ambiguous. (Mr. Bowman stated that this was their first bid protest in his 15 years with the Department.) Therefore, Mr. Bowman decided that it would in the best interest of the State of Florida to reject all of the bids pursuant to the Bid Specifications. Mr. Bowman felt that the ITB should be re-written in order to make it clearer and allowing all of the bidders to re-bid the project without any confusion or ambiguity. Mr. Stine stated that his "senior estimator" told him that the bid language "could be confusing." He and his "senior estimator" had a discussion about whether the Allowance should have been placed in the Base Bid or not. At the time of submission of All America's bid, Mr. Stine was clear that the Allowance should be placed in the Base Bid, especially after calling Mr. Allen. But, his senior estimator was not so clear. In order to appease him, Mr. Stine placed the hand-written note on All America’s proposal. Mr. Stine essentially, "cleaned" up his proposal. At the hearing, Mr. Bowman testified Rule 60D-5.0071, Florida Administrative Code, see Conclusion of Law 59, does not list "confusing or ambiguous bid specifications" as one of the circumstances allowing for the rejection of all bids. However, Mr. Bowman later stated during the hearing that he believed the circumstances listed in Rule 60D-5.0071 were not the only circumstances authorizing the Department to reject all bids. Mr. Bowman testified that he believed that general confusion among the bidders caused by the ambiguous ITB constituted sufficient grounds for rejecting all bids. Mr. Bowman was advised by legal counsel that rejecting all of the bids would probably result in another bid protest by Nelco, All America, or both. Thus, the Department decided to delay addressing All American’s first protest until after posting the rejection of all bids and receiving the subsequent protests, so that all of the protests could be resolved at once in an efficient and economical manner. Notwithstanding the Department's justifications for rejecting all bids and not proceeding on All America's initial protest, the record is unclear why the Department waited several months to reject all bids. On May 13, 2002, the Department posted the rejection of all bids. On May 16, 2002, the Department received a formal written protest of the rejection of all bids filed by All America. On May 17, 2002, Jerome I. Johnson, attorney for the Department, contacted Mr. Robert A. Lash, All America's counsel at the time, concerning the resolution of All America’s formal protest. (Before the final hearing, Mr. Lash, with All America's consent, withdrew as counsel for All America.) The parties agreed to suspend formal bid protest procedures until a meeting could be held between the parties in an attempt to resolve the protests. Mr. Johnson sent a letter dated May 21, 2002, to Mr. Lash confirming this conversation. On June 26, 2002, a meeting was held among the Department staff, legal staff, and Mr. Lash and Mr. Stine, representing All America. The parties were unable to resolve the protests. At the conclusion of the meeting, the parties agreed that formal protest procedures would not be implemented until Mr. Stine could confer further with his counsel. In a letter dated July 5, 2002, Mr. Lash stated that his client wished to proceed with formal protest procedures and requested an administrative hearing on the protests. Are the Specifications and Bid Documents Ambiguous and Was There Confusion? The parties stipulated that "[t]he Addendum language was confusing," notwithstanding the testimony of several witnesses that they were not confused. The Department's determination that the bid Specifications, including the Addendum, and the Bid Form, which remained unchanged after the Addendum was issued, were confusing and ambiguous, is supported by the weight of the evidence. This is particularly true regarding the Bid Form. The Addendum required the bidder to include an Allowance of $25,000.00 in the Base Bid for work described as Alternate # 1. But the Bid Form was unchanged to reflect the Addendum changes. The Bid Form retained a line for the bidder to submit an additional amount for Alternate # 1. Further, it appears that several bidders were confused, including, Mr. Stine, who spoke with Mr. Allen and requested and received clarification. Further, it is unclear whether all of the bidders, including Nelco, were aware of the oral interpretations or clarifications of the Addendum rendered to some of the bidders. Rejection of All Bids Based upon the foregoing, given the standard of review in this proceeding discussed in the Conclusions of Law, the weight of the evidence indicates that the Department's action, in rejecting all bids, was not illegal, arbitrary, dishonest, or fraudulent. The Department's staff was well-intended and made some mistakes along the way, e.g., by not changing the Bid Form, which they readily admit. But there was a rationale for rejecting all bids under the circumstances.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department issue a final order dismissing All America’s Petition to Prevent Rejection of Bids and Award Contract to Petitioner and denying All America's request for attorney’s fees and costs. DONE AND ENTERED this 24th day of September 2002, in Tallahassee, Leon County, Florida. CHARLES A. STAMPELOS Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 24th day of September 2002.
The Issue The issue in this cause is whether costs and attorney's fees are due Petitioner, hereinafter PROCTOR, from Respondent, hereinafter HRS, pursuant to Section 57.111, Florida Statutes, as a result of Division of Administrative Hearings Case Number 91-5963-BID, and, if so, the amount of costs and fees.
Findings Of Fact The petition for fees and costs herein is brought exclusively under Section 57.111, Florida Statutes, and relates back to a bid protest wherein PROCTOR and TCC #3 LTD., INC., hereafter TCC, were the only bidders on HRS lease 590.236. PROCTOR was the protestant/Petitioner and TCC was the apparent successful bidder/Intervenor in Derick Proctor v. Department of Health and Rehabilitative Services, DOAH Case No. 91-5963BID. HRS' Invitation to Bid (ITB) for lease 590:236 required bidders to submit evidence of control of the property being offered, including the parking areas. Evidence of control could take the form of a deed for the property, an option to purchase the property, or a lease or option to lease showing a right to sublease. TCC did not submit a document labelled "deed," "option to purchase," "lease," or "option to lease" with its bid. TCC submitted as its evidence of control a contract for sale and purchase of the property with Hernando Plaza, Ltd., executed by Edward M. Strawgate and Harold Brown representing themselves to be general partners of the limited partnership. At all times material, the actual record title of the property submitted by TCC for the bid was in the Victor and Lillian Brown Foundation. At the times of the bid opening, evaluation, and August 27, 1991 notice of intended award, HRS had no reliable information as to what entity actually owned the property offered by TCC, and TCC had not disclosed to HRS that its contract to purchase the property was with an entity other than the record owner. Up to then, at least, Hernando Plaza, Ltd. had represented itself to TCC as being the owner of the property. The ITB did not require an abstract of title to be submitted with the bid. HRS normally does not require an abstract from successful bidders, although the ITB contained provisions for future disclosures from successful bidders. Absent some reason to "go behind" facial evidence of control, HRS' ITB attempted at the time to protect HRS by requiring successful bidders to post an irrevocable letter of credit to be forfeited in the event a successful bidder could not perform and for future disclosures concerning the chain of title. (See the recommended order in the underlying case). HRS accepted the contract to purchase the property from Hernando Plaza, Ltd. as TCC's required evidence of control, believing it to constitute an option to purchase. (See Findings of Fact 15-17 infra, this final order). On August 27, 1991, PROCTOR received from HRS a notice of intent to award the bid to TCC. This notice constituted the "window" for protests, if any, to be filed. PROCTOR then timely filed a notice of intent to protest and a formal written protest of the award to TCC. The filing of this protest resulted in an automatic suspension of the bid solicitation and contract award process and referral of the matter to the Division of Administrative Hearings, pursuant to Section 120.53(5)(c), Florida Statutes. This protest formed the basis of the underlying bid case, DOAH Case No. 91-5963BID. No later than the time of the Prehearing Order of September 23, 1991 in Case No. 91-5963BID, the law firm of Gibbs and Rudzik had made known to the hearing officer and counsel for both PROCTOR and HRS its retention as counsel for TCC. TCC moved for leave to intervene in a motion filed September 30, 1991, which was granted in an order of October 4, 1991. In a letter of October 10, 1991, counsel for PROCTOR made counsel for HRS aware of a question of whether TCC could obtain good title to the property. Counsel for PROCTOR proposed in a letter of October 14, 1991 to counsel for HRS that HRS reject both PROCTOR's and TCC's bids and rebid the lease, but this letter was primarily devoted to determining if HRS wished to interpose a new defense that PROCTOR's bid was unresponsive. In the instant fees and costs case, PROCTOR relies on its October 14, 1991 letter as the point from which HRS should have acted to avoid incurring attorney's fees and costs. After the receipt of the two letters, HRS did not reject both bids and rebid the contract but proceeded to formal hearing on October 30, 1991. PROCTOR and HRS share the mutual impression that had HRS accepted PROCTOR's proposal to reject both bids, HRS would have to have allowed TCC an opportunity to protest that decision. At the final hearing in Case No. 91-5963BID, evidence was offered that Hernando Plaza, Ltd. had a conditional option to purchase the property from the record title owner, the Brown Foundation. However, it was not established at the hearing that the conditions of the option had been fulfilled or that TCC or Hernando Plaza, Ltd. could otherwise gain good title to the property through a valid option. It was concluded as a matter of law in Case No. 91-5963BID, that on its face, the ITB stated that control could be evidenced merely by attachment of an "option to purchase," that the ITB stated no further requirements concerning the internal provisions of the option to purchase, and that TCC's conditional contract for purchase constituted a conditional option to purchase. The conditions of the option to purchase and the chain of title, among myriad other matters were subjects of proof at the formal hearing. The conditions of the option to purchase and various complicated real property concepts arising from recorded and unrecorded parts of the chain of title constituted the thrust of the recommended order's assessment that TCC's "control" was speculative only. It is here noted that the totality of the "chain" of title might have been unavailable even by "abstract" due to the lack of recordation of some documents. The lengthy formal hearing adduced evidence concerning the factual issue of whether or not the conditional option to purchase was between TCC and an entity which had such a sufficiently unequivocal interest in the proposed property that it could convey title to TCC in time for TCC to fulfill its obligations under its proposed lease to HRS. There is no evidence that HRS knew of these problems on August 27, 1991, when it gave notice of its intent to award the bid to TCC. Hernando Plaza, Ltd. was the entity with which TCC had contracted. At formal hearing, TCC relied on the legal concept that all interests in the property had merged in the non-title holder, Hernando Plaza, Ltd. This concept, together with recorded and unrecorded elements in the chain of title which were presented at formal hearing, were determined in the recommended order to be too "speculative" on the issue of TCC's control. However, it was also found, upon evidence submitted at formal hearing, that TCC's bid contained no other material deviations from the requirements of the ITB, that the signator of TCC's bid had sufficient status to submit the bid for the TCC corporation, and that TCC's signator could not submit the bid as an agent of the owners of the real property. TCC and its bid signator had never purported to have submitted the bid on behalf of the owners of the real property. (See the recommended order of the underlying bid case.) These issues were raised by PROCTOR and they addressed more than just the facial compliance of TCC's original bid documents which was all HRS had to consider when it made its initial decision in favor of TCC and against PROCTOR. However, the recommended order found HRS to have materially deviated in a number of ways from the bid process in its initial evaluation of PROCTOR's bid, not the least of which was determining that PROCTOR had complied with the ITB requirements for demonstrating control. All such evaluation flaws had been committed by HRS in favor of PROCTOR. Both TCC's and PROCTOR's bids were ultimately found to be unresponsive in the recommended order entered on December 20, 1991. The recommended order also found both had standing to be involved in the bid protest and formal hearing. The recommended order recommended rejecting both bids and readvertising the ITB. The Final Order of HRS entered on January 20, 1992 dismissed PROCTOR's protest on the basis that he lacked standing to protest, as his bid was unresponsive, and awarded the bid to TCC. HRS did not give PROCTOR notice that his bid was not responsive until it issued its Final Order. The Final Order of HRS was appealed to the First District Court of Appeals by PROCTOR. The First District Court of Appeals entered an order on June 22, 1992 finding PROCTOR had standing and remanding the case back to HRS for the purpose of a decision of the issue of whether TCC's bid was also unresponsive. On July 27, 1992, HRS entered its Amended Final Order determining both bids to be unresponsive and that the lease should be relet for bids. The First District Court of Appeals affirmed the Amended Final Order of HRS in a per curiam opinion without discussion on October 13, 1992. HRS did not reject both bids and rebid the contract until after this per curiam opinion. No motion for rehearing was filed with respect to either of the First District Court of Appeals' orders entered June 22 or October 13, 1992, nor was any notice to invoke the discretionary jurisdiction of the Supreme Court filed. PROCTOR did file a motion for rehearing solely on the court's denial of PROCTOR's motion for appellate fees. Mandate was issued by the Clerk of the First District Court of Appeals on December 3, 1992. HRS entered an Order Directing Release of Bid Protest Cost Bond on December 18, 1992, in which HRS stated: Petitioner, Derick Proctor, has prevailed in the above styled bid protest. Petitioner's domicile and principal place of business is Vero Beach, Florida. Petitioner has one employee. Petitioner is a sole proprietorship. Petitioner's net worth does not exceed $2,000,000.00. HRS was not a nominal party in the underlying bid case. HRS did not initially challenge PROCTOR's "small business party" status in this instant fees and costs proceeding. Therefore, that allegation of the fees and costs petition is not at issue. Also, Petitioner's "small business party" status is now stipulated to exist. The parties have stipulated that the maximum statutory fee is $15,000.00 and that $15,000.00 is a reasonable fee if an award of attorney's fees is due. HRS has not protested or objected to the amount of costs claimed, $411.25, if costs are due.
Findings Of Fact Findings based on stipulation The School Board of Broward County, Florida, ["Board"] issued bid number 94-307D [Lease of School Board Owned Parking Lot - Term Contract] on the 22nd day of November, 1993. Three bidders responded to the invitation to bid. They were: Bliss Parking, Inc., a Florida Corporation ("Bliss"); Fort Lauderdale Transportation, Inc., d/b/a USA Parking Systems ("USA"); and Carl A. Borge. An initial review of the tabulations of the bids indicated that Bliss and USA had submitted the identical percentage of shared revenue to the Board in their respective bids. After the review of the bids, Board staff posted a recommendation to award the bid to USA. [See the "remarks" portion of Exhibit B.] A bid protest was filed by Bliss because of the "remarks" portion of Exhibit B. After a review of Bliss' bid protest, Board staff amended its recommendation to reject all bids because of the issues raised in Bliss' protest. After Board staff notified all bidders of this amended recommendation, USA filed a notice and formal protest. The Board, at its meeting on March 1, 1994, heard the presentation of USA and Board staff. The Board, after deliberating the matter, deferred the item until the meeting of March 15, 1994, wherein seven Board members would be present. At the March 15, 1994, Board meeting, by a vote of 4 to 3, the Board granted USA's protest and awarded the bid to USA whom the Board had determined was the highest bidder meeting bid specifications. All bidders were notified of the Board's action and on the 16th day of March 1994 Bliss timely filed its notice of protest and its formal written protest. Bliss appeared with counsel before the Board on the 5th day of April 1994. After considering arguments of counsel for Bliss and reviewing the material in Agenda Item H-1 and in consideration of its previous actions, it voted to reject Bliss' protest seeking the rejection of all bids received and re-bidding of the item. Bliss subsequently requested a formal hearing under Chapter 120.57, Florida Statutes. Findings based on evidence adduced at hearing The General Conditions portion of the Invitation To Bid includes the following provision: INTERPRETATIONS: Any questions concerning conditions and specifications must be submitted in writing and received by the Department of Purchasing no later than five (5) working days prior to the original bid opening date. If necessary, an Addendum will be issued. A related provision in the Special Conditions portion of the Invitation To Bid reads as follows: 21. INFORMATION: Any questions by prospective bidders concerning this Invitation to Bid should be addressed to Mrs. Sharon Swan, Purchasing Agent, Purchasing Department, (305) 765-6086 who is authorized only to direct the attention of prospective bidders to various portions of the Bid so they may read and interpret such for themselves. Neither Mrs. Swan nor any employee of the SBBC is authorized to interpret any portion of the Bid or give information as to the requirements of the Bid in addition to that contained in the written Bid Document. Questions should be submitted in accordance with General Condition #7. Interpretations of the Bid or additional information as to its requirements, where necessary, shall be communicated to bidders only by written addendum. The Special Conditions portion of the subject Invitation To Bid includes the following provisions: REFERENCES: A minimum of three (3) references must be provided by completing page 14 of the bid. Failure to provide references with the bid or within five (5) days of request by the Purchasing Department will be reason for disqualification of bid submitted. All references will be called. SBBC reserves the right to reject bid based on information provided by references. Page 14 of the Invitation To Bid has three sections, each of which reads as follows: COMPANY NAME: STREET ADDRESS: CITY: STATE: ZIP: TELEPHONE NUMBER: CONTACT PERSON'S NAME: NUMBER OF PARKING SPACES: LENGTH OF CONTRACT: At page 12 of the Invitation To Bid, the following note appears under the Bid Summary Sheet portion of the document: "NOTE: Calculation of high bidder shall be the bidder offering the highest percent of shared revenue meeting all specifications and conditions of this bid." The Special Conditions portion of the Invitation To Bid also contains a procedure for resolving tie bids, which reads as follows, in pertinent part: TIE BID PROCEDURES: When identical prices are received from two or more vendors and all other factors are equal, priority for award shall be given to vendors in the following sequence: A business that certifies that it has implemented a drug free work place program shall be given preference in accordance with the provisions of Chapter 287.087, Florida Statutes; The Broward County Certified Minority/ Women Business Enterprise vendor; The Palm Beach or Dade County Certified Minority/Women Business Enterprise vendor; The Florida Certified Minority/Women Business Enterprise vendor; The Broward County vendor, other than a Minority/Women Business Enterprise vendor: The Palm Beach or Dade County vendor, other than a Minority/Women Business Enterprise vendor; The Florida vendor, other than a Minority/Women Business Enterprise vendor. If application of the above criteria does not indicate a priority for award, the award will be decided by a coin toss. The coin toss shall be held publicly in the Purchasing Department; the tie low bid vendors invited to be present as witnesses. The Petitioner filled out all three sections on page 14 of the Invitation To Bid and submitted that page with its bid. The three references listed by the Petitioner were companies for whom the Petitioner provided parking services or parking facilities, but none of the three references listed by the Petitioner was a land owner from whom the Petitioner leased land for the operation of a parking facility. Mr. Arthur Smith Hanby is the Director of Purchasing for the School Board of Broward County. In that capacity he is in charge of the bidding process for the School Board. Specifically, he was in charge of the bidding process for the subject project. In the course of evaluating the bids on the subject project, the evaluation committee reached the conclusion that there was a problem with the bid submitted by the Petitioner with respect to the references listed in the Petitioner's bid. In the original bid tabulation and recommendation posted on January 4, 1994, the recommendation was that the contract be awarded to the Intervenor, whose bid amount tied with the Petitioner's bid amount. 4/ The reasons for the recommendation were described as follows in the "remarks" portion of the tabulation and recommendation form: REJECT BID FROM BLISS PARKING, INC. REFERENCES WERE GIVEN ON PAGE 14 OF BID. ALL REFERENCES WERE CALLED. BASED UPON INFORMATION PROVIDED BY THESE REFERENCES AND IN ACCORDANCE WITH SPECIAL CONDITION #10, IT IS RECOMMENDED THAT THE BID FROM BLISS PARKING, INC. BE REJECTED. EVALUATION OF THIS BID CEASED AT THIS TIME. THERE MAY BE ADDITIONAL REASONS WHY THIS BID COULD NOT BE ACCEPTED. The sole reason for the rejection of the Petitioner's bid was that the references listed by the Petitioner were not the types of references the evaluation committee wanted to receive. The evaluation committee wanted references from entities who, like the School Board, were land owners who had leased land to a parking lot operator. The evaluation committee was of the opinion that references from other sources would not adequately protect the interests of the School Board. There is nothing in the Invitation To Bid that addresses the issue of who should be listed as references. Specifically, there is nothing in the Invitation To Bid requiring that references be submitted from land owners who had leased land to a parking lot operator. At the time of the issuance of the subject Invitation To Bid, the Petitioner was operating the subject parking lot for the School Board. There were no material differences in the bids submitted by the Petitioner and the Intervenor other than the differences in the types of references they listed. The Petitioner's references who were contacted did not provide any adverse information about the Petitioner. The evaluation committee spoke to two of the references listed by the Petitioner, but did not speak to the third listed reference. The third reference listed by the Petitioner was a court reporting firm located across the street from the location of the subject parking lot. The evaluation committee did not speak to anyone at the court reporting office because the telephone number listed for that reference was not a working number. The evaluation committee made an unsuccessful attempt to locate the telephone number of the court reporting firm in the telephone book.
Recommendation On the basis of all of the foregoing, it is RECOMMENDED that the School Board issue a final order in this case concluding that the Petitioner's bid is responsive to the Invitation To Bid and that the School Board then take one of the courses of action described in paragraph 26, above. DONE AND ENTERED this 23rd day of June 1994 at Tallahassee, Leon County, Florida. MICHAEL M. PARRISH 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 June 1994.
The Issue Whether Respondent acted contrary to the agency's governing statutes, rules, or policies or the bid specifications in its proposed decision to award Contract No. T7380 to Astaldi Construction Corporation ("Astaldi").
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, and on the entire record of the proceeding, the following Findings of Fact are made: The Department is a state agency authorized by section 337.11 to contract for the construction and maintenance of roads within the State Highway System, the State Park Road System, and roads placed under its supervision by law. The Department is specifically authorized to award contracts under section 337.11(4) to “the lowest responsible bidder.” On April 15, 2016, the Department advertised a bid solicitation for Contract T7380, seeking contractors for the widening of a 3.8 mile portion of U.S. Highway 301 in Hillsborough County from two lanes to six lanes between State Road 674 and County Road 672 and over Big Bull Frog Creek. The advertisement provided a specification package for the project and the “Standard Specifications for Road and Bridge Construction” (“Standard Specifications”) used on Department roadway projects. The work included seven components: bridge structures (Section 0001), roadway (Section 0002), signage (Section 0003), lighting (Section 0004), signalization (Section 0005), utilities (Section 0006), and intelligent transportation systems (Section 0007). The advertisement identified 666 individual items of work to be performed and quantity units for each item. The project was advertised as a low-bid contract with a budget estimate of $51,702,729. The Department’s bid proposal form contains five columns with the following headings: Line Number; Item Number and Item Description; Approximate Quantities and Units; Unit Price; and Bid Amount. The bid proposal form contains line items for the seven components of the project. The utilities component contains 42 line items, each with an Item Number and Item Description. For example, Line Number 1410 corresponds with the following Item Number and Item Description: “1050 11225 Utility Pipe, F&I, PVC, Water/Sewer, 20–40.9 [inches].” Each bidder inserts a Unit Price for the line item in the corresponding “Unit Price” column. The “Bid Amount” column for each line item is an amount generated by multiplying a bidder’s Unit Price by the Quantities (determined by the Department) for each Line Number. The Bid Amount for each Line Number is then added together to generate the “Total Bid Amount” representing the bid for the entire project. Astaldi, Prince, Hubbard, and other potential bidders attended the mandatory pre-bid meeting. Prequalified contractors were given proposal documents that allowed them to enter bids through Bid Express, the electronic bidding system used by the Department. Plan revisions were issued by addenda dated May 10, 2016, and June 7, 2016. A Question and Answer Report was published and updated as inquiries were addressed. Bids were opened on the letting date of June 15, 2016. Bids for Contract T7380 were received from Astaldi, Prince, Hubbard, the DeMoya Group (“DeMoya”), Ajax Paving Industries of Florida, LLC (“Ajax”), and Cone & Graham, Inc. (“Cone & Graham”). The bids were reviewed by the Department’s contracts administration office to ensure they were timely, included a Unit Price for each line item, and contained the completed certifications required by the specifications. Bidders were checked against the Department’s list of prequalified bidders to confirm they possessed a certification of qualification in the particular work classes identified by the bid solicitation. Each bidder’s total current work under contract with the Department was examined to ensure that award of Contract T7380 would not place the bidder over its Department-designated financial capacity limit. Astaldi submitted the lowest bid, a total amount of $48,960,013. Prince submitted the next lowest bid, a total amount of $57,792,043. Hubbard’s total bid was the third lowest at $58,572,352.66. The remaining bidders came in as follows: DeMoya, $63,511,686.16; Ajax, $68,617,978.10; and Cone & Graham, $70,383,697.74. All bidders were prequalified in the appropriate work classes and had sufficient financial capacity, in accordance with section 337.14 and Florida Administrative Code Chapter 14-22. The Department’s construction procurement procedure, from authorization to advertisement through contract execution, is outlined in the Department’s “Road and Bridge Contract Procurement” document (“Contract Procurement Procedure”). The scope statement of the Contract Procurement Procedure provides: “This procedure applies to all Contracts Administration Offices responsible for advertising, letting, awarding, and executing low bid, design-bid-build, construction, and maintenance contracts.” Limited exceptions to the procedure may be made if approved by the assistant secretary for Engineering and Operations. If federal funds are included, the Federal Highway Administration division administrator, or designee, must also approve any exceptions from the procedure. The stated objectives of the Contract Procurement Procedure are: “to standardize and clarify procedures for administering low-bid, design-bid-build, construction, and maintenance contracts” and “to provide program flexibility and more rapid response time in meeting public needs.” The Department’s process for review of bids is set forth in the “Preparation of the Authorization/Official Construction Cost Estimate and Contract Bid Review Package” (“Bid Review Procedure”). The scope statement of the Bid Review Procedure states: This procedure describes the responsibilities and activities of the District and Central Estimates Offices in preparing the authorization and official construction cost estimates and bid review packages from proposal development through the bid review process. Individuals affected by this procedure include Central and District personnel involved with estimates, specifications, design, construction, contracts administration, work program, production management, federal aid, and the District Directors of Transportation Development. The Bid Review Procedure contains a definitions section that defines several terms employed by the Department to determine whether a bid or a unit item within a bid is “unbalanced.” Those terms and their definitions are as follows: Materially Unbalanced: A bid that generates reasonable doubt that award to that bidder would result in the lowest ultimate cost or, a switch in low bidder due to a quantity error. Mathematically Unbalanced: A unit price or lump sum bid that does not reflect a reasonable cost for the respective pay item, as determined by the department’s mathematically unbalanced bid algorithm. Official Estimate: Department’s official construction cost estimate used for evaluating bids received on a proposal. Significantly Unbalanced: A mathematically unbalanced bid that is 75% lower than the statistical average. Statistical Average: For a given pay item, the sum of all bids for that item plus the Department’s Official Estimate which are then divided by the total number of bids plus one. This average does not include statistical outliers as determined by the department’s unit price algorithm. For every road and construction project procurement, the Department prepares an “official estimate,” which is not necessarily the same number as the “budget estimate” found in the public bid solicitation. The Department keeps the official estimate confidential pursuant to section 337.168(1), which provides: A document or electronic file revealing the official cost estimate of the department of a project is confidential and exempt from the provisions of s. 119.07(1) until the contract for the project has been executed or until the project is no longer under active consideration. In accordance with the Bid Review Procedure, the six bids for Contract T7380 were uploaded into a Department computer system along with the Department’s official estimate. A confidential algorithm identified outlier bids that were significantly outside the average (such as penny bids) and removed them to create a “statistical average” for each pay item. Astaldi’s unit pricing was then compared to the statistical average for each item. The computer program then created an “Unbalanced Item Report,” flagging Astaldi’s “mathematically unbalanced” items, i.e., those that were above or below a confidential tolerance value from the statistical average. The unbalanced item report was then reviewed by the district design engineer for possible quantity errors. No quantity errors were found.1/ The Department then used the Unbalanced Item Report and its computer software to cull the work items down to those for which Astaldi’s unit price was 75 percent more than or below the statistical average. The Department sent Astaldi a form titled “Notice to Contractor,” which provided as follows: The Florida Department of Transportation (FDOT) has reviewed your proposal and discovered that there are bid unit prices that are mathematically unbalanced. The purpose of this notice is to inform you of the unbalanced nature of your proposal. You may not modify or amend your proposal. The explanation of the bid unit prices in your proposal set forth below was provided by ASTALDI CONSTRUCTION CORPORATION on ( ) INSERT DATE. FDOT does not guarantee advanced approval of: Alternate Traffic Control Plans (TCP), if permitted by the contract documents; Alternative means and methods of construction; Cost savings initiatives (CSI), if permitted by the contract documents. You must comply with all contractual requirements for submittals of alternative TCP, means and methods of construction, and CSI, and FDOT reserves the right to review such submittals on their merits. As provided in section 5-4 of the Standard Specifications for Road and Bridge Construction you cannot take advantage of any apparent error or omission in the plans or specifications, but will immediately notify the Engineer of such discovery. Please acknowledge receipt of this notice and confirmation of the unit bid price for the item(s) listed below by signing and returning this document. Section 5.4 of the Bid Review Procedure describes the Notice to Contractor and states: “Contracts are not considered for award until this form has been signed and successfully returned to the Department per the instruction on the form.” State estimating engineer Greg Davis testified that the stated procedure was no longer accurate and “need[s] to be corrected” for the following reason: Since the procedure was approved back in 2011, we’ve had some subsequent conversations about whether to just automatically not consider the award for those that are not signed. And since then we have decided to go ahead and just consider the contract, but we are presenting a notice, of course, unsigned and then let the technical review and contract awards committee determine. Astaldi signed and returned the Notice to Contractor and noted below each of the ten listed items: “Astaldi Construction confirms the unit price.” Mr. Davis explained that the purpose of the Notice to Contractor form is to notify the contractor that items have been identified as extremely low and to ask the contractor to confirm its understanding that in accepting the bid, the Department will not necessarily approve design changes, methods of construction, or maintenance of traffic changes. Section 6.6 of the Contract Procurement Procedure sets forth the circumstances under which an apparent low bid must be considered by the Department’s Technical Review Committee (“TRC”) and then by the Contract Awards Committee (“CAC”). Those circumstances include: single bid contracts; re-let contracts; “significantly mathematical unbalanced” bids; bids that are more than 25 percent below the Department’s estimate; 10 percent above the Department’s estimate (or 15 percent above if the estimate is under $500,000); materially unbalanced bids, irregular bids (not prepared in accordance with the Standard Specifications); other bid irregularities2/; or “[a]ny other reason deemed necessary by the chairperson.”3/ Bids that are not required to go before the TRC and CAC are referred to as “automatic qualifiers.” Because it was mathematically unbalanced, the Astaldi bid was submitted to the TRC for review at its June 28, 2016, meeting. The TRC is chaired by the Department’s contracts administration manager, Alan Autry, and is guided by a document entitled “Technical Review Committees” (“TRC Procedure”). The TRC Procedure sets forth the responsibilities of the TRC in reviewing bid analyses and making recommendations to the CAC to award or reject bids. The TRC voted to recommend awarding Contract T7380 to Astaldi. The TRC’s recommendation and supporting paperwork was referred to the CAC for its meeting on June 29, 2016. The duties of the CAC are described in a document entitled “Contracts Award Committees” (“CAC Procedure”). Pursuant to the CAC Procedure, the CAC meets approximately 14 days after a letting to assess the recommendations made by the TRC and determines by majority vote an official decision to award or reject bids. Minutes for the June 29, 2016, CAC meeting reflect 21 items before the committee including: two single bid contracts; four bids that were 10 percent or more above the official estimate; one bid that was 15 percent or more above the official estimate on a project under $500,000; three bids that were more than 25 percent below the official estimate; and 11 bids with significantly unbalanced items, including Contract T7380 with an intended awardee of Astaldi. The CAC voted to award Contract T7380 based on the low bid submitted by Astaldi. A Notice of Intent to award the contract to Astaldi was posted on June 29, 2016. As noted at Finding of Fact 2, supra, Contract T7380 consisted of seven components: structures, roadway, signage, lighting, signalization, utilities, and intelligent transportation system. The Department does not compare bids by component, but looks at the total bid amount to find the lowest bidder. The Department also reviews the bids for discrepancies in individual unit items using the process described above. Astaldi’s bid of $48,960,013 was approximately $8.8 million below Prince’s bid of $57,792,043, $9.6 million less than Hubbard’s bid of $58,572,352, and $2.7 million below the Department’s public proposal budget estimate of $51,702,729. As part of its challenge to the intended award, Prince performed a breakdown of bids by individual components and discovered that nearly all of the differences between its bid and Astaldi’s could be attributed to the utilities component. Astaldi’s bid for the utilities component was $7,811,720, which was roughly $8.5 million below Prince’s utilities bid of $16,305,903 and $5.8 million below Hubbard’s utilities bid of $13,603,846.4/ The utilities component was included pursuant to an agreement between the Department and Hillsborough County, the owner of the water and sewer lines, relating to the improvement of water and sewer lines along the roadway limits of the project. The utility work consists of installing a new water- line and force main sewer. The existing water main and the existing force main conflict with the proposed location of the new storm drainage system. The new water main and force main must be installed, tested, and approved before being put into active service. To prevent water utility outages to customers, the new system must be installed and approved before the existing waterline and existing force main can be cut off and removed. Utility work is therefore the first task to be performed on Contract T7380. Once the utility component is completed, the contractor will furnish and install the stormwater system, the roadway, the bridgework, and all other components. Article 3-1 of the Standard Specifications5/ reserves to the Department the right to delete the utility relocation work from the contract and allow the utility owner to relocate the utilities. Utilities are the only portion of a Department contract subject to deletion because the funding is provided by the utility owner, which usually has allocated a certain dollar figure to contribute towards the contract prior to the bidding. If the bid for utilities comes in over the utility owner’s budget, the owner can opt out of the contract and self-perform. In this case, Hillsborough County had contracted with the Department to contribute $8.9 million for utility relocation work. The Department did not exercise the option to delete the utilities portion of the contract. Jack Calandros, Prince’s chief executive, testified that Prince uses a computer program called HeavyBid, created and supported by a company called HCSS, to build the cost components of its bids. Every witness with industry knowledge agreed that HeavyBid is the standard program for compiling bids in the construction field. Mr. Calandros testified that cost components include material quotes provided by third-party vendors and quotes from potential subcontractors. Labor and equipment costs are ascertained by using historical rates and actual cost estimates that are tracked by the HeavyBid software. Prince maintains its own database of costs derived from 20 years’ experience. Mr. Calandros stated that Prince’s internal labor and equipment rates are checked and adjusted at least once a year to ensure they are current and accurate based on existing equipment and personnel. Prince received three vendor quotes for the materials to perform the utility work on Contract T7380. In compiling its bid, Prince ultimately relied on a final quote from Ferguson Waterworks (“Ferguson”) of $8,849,850. Based on this materials quote and Prince’s overall utilities bid of $16,305,903, Mr. Calandros opined that it would not be possible for Astaldi to perform the utilities component for its bid amount of $7.8 million. Prince’s estimating expert, John Armeni, reviewed Astaldi’s bid file, read the deposition testimony of Astaldi’s chief estimator, Ed Thornton, and spoke to Mr. Thornton by telephone. Mr. Armeni also reviewed Prince’s bid and the bid tabulation of all bidders’ utilities component line items. Based on his review and his extensive experience in the industry, Mr. Armeni concluded that Astaldi’s bid does not include all costs for labor, material, and equipment necessary to construct the utilities portion of this project. Mr. Armeni reviewed the materials quote from Ferguson that Prince used in its bid. He noted that Astaldi’s bid file contained an identical quote from Ferguson of $8.8 million for materials, including some non-utilities materials. Mr. Armeni noted that the Ferguson quote for utilities materials alone was approximately $8 million, an amount exceeding Astaldi’s entire bid for the utilities portion of the project. Mr. Armeni also noted that Astaldi’s overall bid was 18 percent below that of the second lowest bidder, Prince. He testified that 18 percent is an extraordinary spread on a bid where the Department is providing the quantities and all bidders are working off the same drawings and specifications. Mr. Armeni believed that the contracting authority “should start looking at it” when the difference between the lowest and second lowest bidder is more than 10 percent. In his deposition, Mr. Thornton testified he was not aware of how Astaldi arrived at its bid prices for the utility section of the project. Mr. Thornton indicated multiple times that he was not Astaldi’s most knowledgeable person regarding the bid submitted by Astaldi on Contract T7380 project. He testified that Astaldi intended to subcontract the utilities work and acknowledged that the company received a subcontractor quote of $14.9 million after the bids were submitted. Mr. Thornton did not know if Astaldi had solicited the quote. He said it is not unusual for a company to receive subcontractor bids after it has been named the low bidder on a project. Mr. Thornton conceded that Astaldi’s bid did not include all the costs necessary to construct the utilities portion of Contract T7380. At his deposition, he did not have before him the materials needed to determine which items of cost Astaldi had omitted. Mr. Thornton testified that Astaldi was not missing any information it needed at the time of bid submission and understood that its price was to include all labor, materials, and subcontracting costs to perform the contract. After the proposed bid award, Astaldi used HeavyBid to produce a report indicating that the company now estimates its cost of performing the contract at $53,708,129.03, or roughly $4.75 million more than its winning bid. Mr. Thornton testified that Astaldi nonetheless stood ready to execute the contract and perform the work at its bid price. Central to the dispute in this case is Standard Specifications Section 9, “Measurement and Payment,” article 9-2 of which is titled “Scope of Payments.” In particular, subarticle 9-2.1 provides: 9-2.1 Items Included in Payment: Accept the compensation as provided in the Contract as full payment for furnishing all materials and for performing all work contemplated and embraced under the Contract; also for all loss or damage arising out of the nature of the work or from the action of the elements, or from any unforeseen difficulties or obstructions which may arise or be encountered in the prosecution of the work until its final acceptance; also for all other costs incurred under the provisions of Division I. For any item of work contained in the proposal, except as might be specifically provided otherwise in the payment clause for the item, include in the Contract unit price (or lump sum price) for the pay item or items the cost of all labor, equipment, materials, tools and incidentals required for the complete item of work, including all requirements of the Section specifying such item of work, except as specially excluded from such payments. Prince contends that the second paragraph of subarticle 9-2.1 renders Astaldi’s bid nonresponsive because Astaldi admittedly failed to include “the cost of all labor, equipment, materials, tools and incidentals” in its bid. Prince points out that the “Technical Special Provisions” governing the utilities portion of the project reinforce the requirement that each bidder include all costs for the work. Technical Special Provisions Section 1-7.1 provides that “[p]ipe installation cost shall include all necessary work, equipment, and labor needed for installing the pipe, such as, coordination with existing utilities and support during construction and support of existing power poles during construction.” Technical Special Provisions Section 1-8.1 goes on to say that “[n]o separate payment will be made for the following items for work under this Technical Special Provision and the cost of such work shall be included in the applicable contract pay items of work,” followed by a comprehensive list of 30 items. Prince concludes that the requirement that each bidder include all costs, including costs of all necessary labor, equipment, and materials, in the Unit Price for each work item is “manifest” in the bid specifications and requires rejection of any bid that does not include all costs. Mr. Armeni opined that if one bidder excludes a portion of its costs, the other bidders are placed at a competitive disadvantage. Alan Autry, the Department’s central contracts administration manager, testified that five other projects were let as part of the bid package that included Contract T7380. He stated that it is typical for the Department to list multiple projects on one day. Mr. Autry’s office usually performs one bid letting per month, with the holiday months of November and December rolled together in a single letting. Mr. Autry stated that his office lets between 200 and 300 projects per year, not counting contracts that are let at the district level. Twenty other contracts were before the CAC at the June 29, 2016, meeting at which the Astaldi award in this case was approved. As noted at Finding of Fact 2, supra, Contract T7380 included 666 line items. Six companies submitted bids, meaning there were a total of 3,996 line items in this single contract. Assuming that the 200 to 300 other projects let by the Department’s Tallahassee office contain similar numbers, there are more than one million line items bid in any given year. If Prince’s reading of the bid specifications is correct, the Department is required to examine each of these line items and somehow make a determination whether the item includes all of the bidder’s costs. This problem of determining bidder cost is complicated by the presence of “companion” or “sister” items in bids, i.e., two items that must be considered in tandem to arrive at something like the actual cost of the work. Prince provided an example of such companion items in its analysis of the bids in this project. Two bid items included in the structures section of the bid proposal form were concrete culverts and reinforcing steel. The contractor may cast the culverts in place at the worksite or purchase them precast. If the concrete culvert is cast in place at the worksite, then reinforcing steel must be used to strengthen the culvert. If the concrete culvert is precast by a materials supplier, then the reinforcing steel has already been incorporated into the culvert at the time of installation. Mr. Calandros explained that when a contractor uses precast culverts, there is no need to list a separate additional cost for reinforcing steel; all costs are captured in the line item for concrete culverts. In this bid, Prince used precast culverts and therefore bid a penny per unit for reinforcing steel.6/ Bidders who cast the culverts in place showed a much higher cost for reinforcing steel but a lower cost for the concrete culverts. When the “companion items” were considered in tandem, the total cost for each vendor was fairly consistent. Prince’s explanation for companion items was coherent but did not explain how the Department is supposed to know which items are companion items as it undertakes the line-by-line cost examination of each bid in accordance with Prince’s reading of the bid specifications. Prince also failed to provide an explanation as to how the Department is to determine a bidder’s costs for any one line item or, for that matter, for its overall bid on a project. Bidders consider their cost information and the processes by which they build bids to be confidential proprietary information. In the instant case, Prince disclosed its own information (aside from materials costs) only under seal during litigation. In its ordinary course of business, the Department does not have access to this information. In fact, as noted at Finding of Fact 23, supra, the Department does not compare bids by component. It looks only at the total bid amount in determining the lowest bidder. Standard Specifications Article 3-8 reserves to the Department the right to perform an audit of the contractor’s records pertaining to the project upon execution of the contract. No authorization is provided to audit records of bidders prior to contracting. Standard Specifications Subarticle 2-5.1 allows bidders to indicate “free” or “$.00” for items that will be supplied at no cost to the Department. Though the Department’s practice, according to Mr. Autry, is to include zero bid items on the Notice to Contractor for confirmation of the price, subarticle 2-5.1 requires no Department investigation as to whether the bidder’s cost for a zero bid is actually zero. Bidders often bid a penny on items, as Prince did on reinforcing steel in this case. Standard Specifications Article 3-5 requires all contracts to be secured by a surety bond such that, in the event of a default by the contractor, the surety company will indemnify the Department on all claims and performance issues. Standard Specifications Section 4 provides that the scope of work is to be determined within the contract, including the furnishing of all labor, materials, equipment, tools, transportation, and supplies required to complete the work. The Department is authorized to make changes to the scope of work and make equitable adjustments of payments. If necessary, the Department may enter into supplemental agreements for additional or unforeseen work. Prince cautions that these change provisions could become relevant because Astaldi’s bid contains no information explaining how Astaldi will cover the $4.75 million difference between its bid price and its actual cost to perform the contract. Prince accurately states that nothing in Astaldi’s bid demonstrates that it has cash reserves to cover the loss and still complete the entire scope of the work.7/ Prince contends that this lack of demonstrable reserves renders Astaldi nonresponsible as to this project. Prince argues that it is error for the Department to rely on Astaldi’s certificate of qualification as proof of the company’s responsibility. The certificate of qualification process considers a contractor’s financial status at the time it submits its financial statements and other information regarding company resources. Prince contends that the Department’s assessment of the contractor’s financial statements and issuance of a certificate of qualification is insufficient to determine the contractor’s responsibility on a given bid. Prince argues that the Department is required by its governing statutes and the Standard Specifications to award a particular contract to the particular bidder that is the lowest, responsive, and responsible bidder, and that “responsible” for a given project is not synonymous with “prequalified.” Prince hypothesizes that under the Department’s practice, a bidder could possess a certificate of qualification issued in January, be indicted in another state for fraud and bribery in February, submit the lowest bid for a Department project in March, and be awarded the contract. By relying solely on the bidder’s certificate of qualification to determine responsibility, the Department could award a contract to a nonresponsible bidder. Section 337.14 provides that any person desiring to bid on any construction contract in excess of $250,000 must first be certified by the Department. Mr. Autry explained that the Department prequalifies contractors to submit bids on certain types of contract, such as major bridges and structures. Contractors applying for certification are required to submit their latest annual financial statements. The Department is charged with reviewing applications to determine “whether the applicant is competent, is responsible, and possesses the necessary financial resources to perform the desired work.” § 337.14(3), Fla. Stat. The Department assigns the contractor work classes and a total capacity after evaluating its experience and financials. The Department’s certificate is good for 18 months, though the contractor’s capacity is reviewed annually. At the time of a particular bid, the Department verifies the contractor’s available capacity, which is simply its total assigned capacity minus current work the contractor is performing for the Department. Mr. Autry testified that the Department does not go back and look at a bidder’s financials to determine whether it can sustain a loss on a given project. The Department does not repeat its capacity analysis during the year, regardless of how many projects the company bids on. The Department’s analysis is limited to whether the company’s current capacity is sufficient for the project on which it is bidding.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Transportation enter a final order dismissing Prince Contracting, LLC’s, second amended formal written protest and awarding Contract T7380 to Astaldi Construction Corporation. DONE AND ENTERED this 22nd day of December, 2016, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON 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 22nd day of December, 2016.
