Findings Of Fact On February 7, 14 and 21, 1989, respondent, School Board of Pinellas County (Board), published a legal advertisement in an area newspaper inviting prospective bidders to submit proposals for certain construction work to be performed on two elementary schools, Walsingham and Cross Bayou, located in Largo and Pinellas Park, Florida, respectively. The bidders were advised that their bids must be "prepared and submitted in accordance with the drawings and specifications" and that such drawings and specifications could be obtained from the Board. Such bids were to be filed with the Board no later than 2:00 p.m. on March 6, 1989. The notice also provided that the bids would be opened the same day. Bids were timely filed by at least five contracting firms, including petitioner, Prelude Construction Company, Inc. (Prelude), and intervenors, Lincoln Construction Company (Lincoln) and Bandes Construction Company (Bandes). In filing these proposals, each bidder represented he had "thoroughly examined all of the contract documents." After the bids were opened and reviewed by Board personnel, Lincoln, Prelude and Bandes were ranked first, second and fourth, respectively, based upon the dollar amount of their proposals. 2/ Thereafter, the Board issued its notice of intended action on March 7, 1989, wherein it advised all parties of its intention to award the contract to Lincoln. In doing so, the Board concluded that, although a bid bond accompanying Lincoln's proposal was not dated March 5 or 6 as required by the specifications, the deviation was minor and could be waived. That action prompted Prelude to file its protest. Through testimony of Lincoln's vice-president, it was established that the Board staff intended to change its initial position and to recommend to the Board that Lincoln's bid proposal be rejected and the contract awarded to Bandes. This change was prompted by the Board staff's discovery on the day of hearing (April 3) that, with the exception of Bandes, all bidders had failed to list the, roofing subcontractor on their bid proposals. The Board staff accordingly concluded that all bidders except Bandes should be disqualified. The bid specification upon which the Board relies to award the contract to Bandes is found in Part One, paragraph 1.1 of section 07511 of the bid specifications. The requirement is a relatively new one and imposes the following requirement upon bidders: NOTE: The contractor is required to list the name of the roofing subcontractor on the form of proposal, Section 1C. Section 1C is entitled "Form of Proposal" and includes the following section on page 1C-3 to be filled in by the bidder: The following subcontractors will be contracted with on this project. Type of Subcontractor Name of Subcontractor (Trade Specialty) (Company/Firm) The column on the left side is intended to identify the subcontractor by specialty, such as plumbing or roofing, while the blank spaces in the right hand column are to be filled in by the bidders with the name of the subcontractor who will perform the specialty. The Board has not been consistent in requiring bidders to list the name of subcontractors on the bid documents. According to the uncontroverted testimony of Lincoln, the Board requires the listing of subcontractors on some projects but not on others. For example, on the specifications for the recently let contract for the prototype new media center at four elementary schools, the left hand column on the above form was filled in by the Board with five types of subcontractors who were required on the project, including roofing. This meant that the bidder was to fill in the blanks in the right hand column with the name of the subcontractor who he intended to use on each specialty. However, on other contracts, including the one under challenge, both columns in the Form for Proposal have been left blank, and Lincoln construed this to mean that the name of the subcontractor was not required. Indeed, Lincoln pointed out, without contradiction, that on a recent contract which left both columns blank, as was true in this case, it was awarded the contract even though it did not identify the roofing subcontractor on its proposal. Because of this prior agency practice, Lincoln assumed the same policy would be used again. However, Lincoln conceded it had failed to read the requirement in paragraph 1.1 of section 07511 before preparing its proposal. There was no evidence that Lincoln gained any substantial advantage over other bidders by this omission. Also relevant to this controversy is Paragraph 10A of the General Requirements. This item is found on page 1B-11 and reads as follows: Each bidder shall indicate the names of specific major Subcontractors if called for on the form of proposal. If listing of Subcontractors is required and the Bidder fails to list them, the bid may, at Owner's option, be disqualified. (Emphasis added) This authority to waive the requirement is reinforced by language in Paragraph 21 of the General Requirements which provides in part that "(t)he owner reserves the right to waive minor technicalities." According to the Board's outside architectural consultant, who was the author of a portion of the contract specifications including section 07511, the omission of the name of the roofing subcontractor is a "minor" technicality that can be waived. However, the consultant had no personal knowledge as to whether the provision had actually been waived by the Board on prior contracts.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered awarding the contract in question to Bandes Construction Company. DONE AND ORDERED this 20th day of April, 1989, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 20th day of April, 1989.
The Issue The issue is whether Respondent undertook to act as a contractor without a license as charged in the Administrative Complaints, and if so, what disciplinary action should be taken.
Findings Of Fact Pursuant to Section 20.165, the Division of Professions is a subordinate unit of the Department of Business and Professional Regulation (the Department). The Department provides administrative support, including prosecutorial support to the Construction Industry Licensing Board (the Board), which is also located within the Department. Mr. Grandmont is not currently licensed as a State Registered or State Certified Contractor in this state, nor has he ever been licensed by the Board. Mr. Grandmont's last known address is 355 China Berry Circle, Davenport, Florida. He was provided notice of the hearing at that address, and at 7733 Park Road, Charlotte, North Carolina 28210, which is the address he used when demanding a hearing on disputed facts in two of these cases. In DOAH Case No. 06-3279, he provided no address in his demand for a hearing. All attempts by U. S. Mail to notify Mr. Grandmont of the hearing, were returned. Mr. Grandmont is deemed to have known of the time, date, and place of the hearing, and is deemed to have waived his appearance at the hearing. On November 11, 2005, subsequent to Hurricane Wilma, Robert L. Coe, of Lake Worth, Florida, was contacted by Mr. Grandmont, who offered to repair his damaged mobile home. He provided a written estimate of $10,500. The estimate contained a list of 11 items requiring repair, and stated that he would accomplish the repair of them. He demanded a $4,200 down payment, which Mr. Coe provided in a draft drawn on Fidelity Cash Reserves, and dated November 11, 2005. Mr. Coe never saw Mr. Grandmont again. The repairs set forth in the written estimate were not accomplished. The draft, however, was negotiated by Mr. Grandmont. On November 12, 2005, subsequent to Hurricane Wilma, Joseph Webster, of Lake Worth, Florida, was contacted by Mr. Grandmont, who offered to repair his damaged residence. Mr. Grandmont discussed charging $13,500 in return for repairing Mr. Webster's residence. After negotiations, Mr. Grandmont agreed to do it for $11,500. No written estimate or contract was prepared. Mr. Grandmont demanded $5,750 payment in advance. Mr. Webster rounded off the down payment to $6,000 and presented Mr. Grandmont an official check of the Taunton Federal Credit Union, of Taunton, Massachusetts, for that amount. The check was negotiated by Mr. Grandmont, but the promised repairs were not accomplished. On November 4, 2005, subsequent to Hurricane Wilma, Ella Arseneau, of Lake Worth, Florida, was contacted by Mr. Grandmont, who offered to replace her roof. He provided an estimate of $5,500 in return for repairing Ms. Arseneau's residence. He demanded that she pay $3,500 in advance, which Ms. Arseneau provided by presenting Mr. Grandmont a check for $3,500, drawn on an account in Wachovia Bank. The check was negotiated by Mr. Grandmont, but the roof was not repaired as promised. Mr. Coe is 78 years of age, Mr. Webster is 85, and Ms. Arseneau is 77.
Recommendation Based upon the Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Business and Professional Regulation impose a fine upon Clifford Grandmont in the amount of $30,000. DONE AND ENTERED this 28th day of November, 2006, in Tallahassee, Leon County, Florida. S HARRY L. HOOPER Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 28th of November, 2006. COPIES FURNISHED: Brian A. Higgins, Esquire Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-2202 Clifford Grandmont 7733 Park Road Charlotte, North Carolina 28210 Nancy S. Terrel, Hearing Officer Office of the General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Simone Marstiller, Secretary Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792 Josefina Tamayo, General Counsel Department of Business and Professional Regulation Northwood Centre 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact Based upon the testimony of the witnesses and the documentary evidence received at the hearing, the following findings of fact are made: The Petitioner, School Board of Brevard County, Florida, is empowered to designated the personnel positions to be filled, prescribe qualifications for those positions, and provide for the appointment, compensation, promotion, suspension, and dismissal of employees for the school district. The Respondent, Arthur Douglas Barna, has been employed by the Petitioner since the early 1970s. The Respondent has a degree in mechanical engineering, is a registered professional engineer, and has twenty years of experience in the construction field. Respondent's first position with the Petitioner was as construction manager. In 1976, Respondent's title was amended to staff engineer and construction manager. In 1981, Respondent was made Director of Facilities a position he held until February, 1991, when he was returned to the staff engineer position and John Allen was retained to be Director of Facilities. On April 23, 1991, Respondent was recommended for appointment to the position of staff engineer for the 1991-92 contract term by the school superintendent. The qualifications for appointment as staff engineer/project manager are: Graduation from a college or university with a degree in engineering. Registered as an engineer in the State of Florida. Experience (five years minimum) in educational design and facility planning administration. Experience in administration of educational construction contracts. Knowledge of Uniform Building Code and Florida School Laws and Regulations. On April 23, 1991, by a 3-2 vote, the Petitioner rejected the superintendent's recommendation to employ Respondent. Prior to April 23, 1991, Respondent had received satisfactory personnel evaluations. Prior to April 23, 1991, Respondent had not been reprimanded or disciplined for any act or omission regarding the performance of his duties. In the two years prior to April 23, 1991, Respondent had participated in numerous construction and remodeling projects for the Petitioner. Such projects exceeded $46,000,000.00 in cost to the public. One of projects Respondent was involved with during his tenure with the Board was Stone Middle School (Stone). That project originated with a bid proceeding to choose a contractor to perform the construction work. One of Respondent's duties was to represent the Board at bid openings. In the case of the Stone project, within a short time after the bid opening, the apparent low bidder on the job, Speegle Construction (Speegle), advised Respondent that an error had been made on the bid form. That error was claimed to be in the amount of $40,000.00. Speegle's bid was $90,000.00 lower than the next low bidder. Speegle had tendered a bid bond in the amount of $50,000.00. After reviewing the matter with the bidder, Respondent took the matter to his supervisor who then took the issue to the school superintendent and board staff. Among the staff who considered the issue was the school board attorney. Regardless of any dispute regarding the computation of the $40,000.00 error (such are deemed irrelevant to the essential issue), the Board was presented its options: to take the bid bond and award the contract to the next lowest bidder; to give Speegle the additional $40,000.00 and award it the contract; or, presumably, rebid the project. Since awarding Speegle the contract, with the $40,000.00 addition, still saved the public $50,000.00, over the next lowest bidder, Respondent recommended that option. His recommendation was supported by his superiors. After public discussion of the matter, the Board unanimously voted to select Speegle as recommended by staff. No evidence supports the assumption that the Board's decision, based in part on Respondent's recommendation, was found to be illegal, unethical or challenged by the other bidders on the project. The Stone project had additional problems since the architectural firm hired to complete the drawings did not meet the guidelines established by the Department of Education. On at least two occasions the plans had to be returned to comply with state standards. Consequently, the project was late commencing. Such lateness was not due to the fault or error of the Respondent. To the extent he was involved, Respondent properly supervised the Stone construction project and did not approve inferior work. All specifications of the contract were met and verified by Respondent and then assistant superintendent for facilities, Leon Cowling. Issues regarding performance of the Stone project arose between Respondent and Cliff Gordon, president of the architectural firm involved with the job. Such issues related to the lockers and an athletic field which Mr. Gordon claimed did not meet specifications. Such allegations are not supported by the record in this case. When the Stone project was not completed on time, Respondent assessed liquidated damages against Speegle in accordance with the contract terms. Respondent was not responsible for the lateness, and Speegle, in fact, made good on the damages. Respondent and Mr. Gordon did not agree on aspects of the Stone project. Mr. Gordon became disgruntled when Respondent would not approve payment to Mr. Gordon's firm for work allegedly done. Mr. Gordon attended Board meetings regardless of his claim that Respondent had advised him to stay away. Respondent was not responsible for the removal or encapsulation of asbestos found in several schools. Respondent's position placed him in a position over construction, not maintenance. Moreover, another school administrator was assigned to be responsible for overseeing issues related to asbestos at all times material to this case. Respondent did not supervise a project wherein the treatment of asbestos was at issue. Anderson Elementary School (Anderson) has a noise problem in that sound travels from one area to another. The ceiling tile used in the Anderson project was the same product used in the other schools and was the contractor's choice. At the time of installment an issue arose as to whether the tile to be used met the specifications of the contract. Ultimately, the architect signed off on the use of the tile requested by the contractor. Unfortunately, the tile used does not buffer noise. Whether the tile originally requested would more effectively buffer the noise is unknown. Whether the design of the facility contributes to the noise problems is also unknown. That there is a noise problem at Anderson is not due to an act, omission, or the negligence of the Respondent. In connection with the air conditioning system installed at Southwest Junior High School (Southwest) a problem arose as to that system's design. Respondent did not design the system. In fact, a design firm was retained to complete the work and the system was installed based upon that work. The Board does not have the personnel or the staff expertise to verify whether outside consultants perform their jobs correctly. Presumably, the Board utilizes such consultants because it does not have the internal resources to do the work requested. In the case of Southwest, the firm hired designed the system improperly. As a result, the Board made a claim, and collected, against the firm's errors and omissions insurance. Thus, the Board received damages for the design defect. Cambridge Elementary School (Cambridge) is located adjacent to a housing subdivision developed by Centex Homes. Due to drainage problems associated with the development, the homeowners' association and the developer requested that the Board execute a drainage easement on the Cambridge property so that the properties might be enhanced. The homeowners' proposal made to the Board gave the expense of preparing and maintaining the easement to the association. Respondent was approached regarding the drainage easement and considered the matter to benefit the school site. Respondent and Mr. Cowling recommended granting the easement. Such easement was to be preceeded by an agreement setting forth the homeowners' obligations to the Board. For reasons not addressed by this record, an agreement was not prepared and returned to the Board as had been directed. In fact, the Board chairman and superintendent executed the drainage easement without evidence of an agreement. Nothing in this record suggests Respondent had anything to do with the execution of the easement or the failure to obtain a written agreement regarding it. Moreover, these events occurred in May and November, 1988, some three years prior to the nonappointment of Respondent. The construction of the educational services facilities at Viera posed many novel and complicated construction issues for the Board and its staff. For one thing, the Board had not utilized a "design/build" format in construction before. Based upon the record in this case, it is unlikely that the format will be used again. The design/build format requires the construction of some phases of a project while the design is still occurring. As a result, unlike situations where a contractor has a determined set of plans to follow, the builder in the design/build format is in a constant state of flux and change. As may be expected, the owner is tied to the same constant amendment to plans. In the case of Viera, Respondent served as the owner's representative on the project. By contract, all notices and changes went through Respondent who was then responsible for coordinating with the Board staff. At all times material to the Viera project, Respondent kept his supervisor aware of the progress of the project and of the changes to plans or specifications. It was not Respondent's responsibility to report directly to the Board regarding the Viera project (or any other for that matter). Respondent routinely made reports to his supervisor who then coordinated matters with finance and the superintendent. Respondent was available to the Board for any matters that might require his input. Early on in the Viera project Respondent advised his supervisor and the Board that they had little control over how the building was constructed. As long as the project stayed within the general design concept, the specifications were fairly open. Respondent's first priority was to try to keep the Viera project on budget as to the changes that occurred. To that end, items such as the carpet allotment were reduced to capture more funding for other requested items. In each such case Respondent made his superior aware of the changes. Ultimately, the changes requested by Respondent, the superintendent, or John Forbes were placed before the Board as change order #1 and approved. While some of the changes had already occurred, there is no evidence that the Board took action to prohibit Respondent and the administration from making the day-to-day decisions on the project. In fact, the contractor make changes on the Viera project without authorization from any Board administrator. Presumably, necessity caused the Board to accept such work. There is no evidence that the changes authorized by Respondent on the Viera project were arbitrary or in violation of the contract. Respondent did not fail to abide by the contract terms. Respondent did not act improperly regarding the Viera project and is not responsible for the quality of the workmanship of the job. As energy costs became a concern to the Board, the Respondent participated in a conservation effort whereby energy firms were solicited for proposals as to how the Board might save on energy expenses. Initially five contractors showed interest in the project but only three filed proposals with the facilities department. To evaluate the proposals, which was deemed a "win/win" deal by the Board, an outside consultant was hired to review each of the submittals. The proposals, along with input from the consultant, was then heard and considered by a committee of eleven school board employees. The Respondent was not a voting member of the group. After receipt of the proposal and the foregoing review, the committee and Respondent recommended to the Board that Facility Masters Incorporated (FMI) be selected for the contract. The Board also reviewed the proposals and recommendations and approved the recommendation to hire FMI. The contract between FMI and the Board was reviewed by the school board attorney. The scope and terms of the project were outlined to the Board and the administrative staff. The concept of the proposal was to replace, at no initial cost to the Board, the outdated and inefficient equipment with new, efficient units so that the energy savings would actually pay for the equipment. None of the persons who reviewed the FMI project was aware that the proposal might require a performance bond. Respondent and others aware of the project were familiar with bonds and the necessity to have same on certain types of projects. In this instance, the superintendent, the assistant superintendent for facilities, the school board attorney, and Respondent did not request a bond for this job. No Board member questioned whether a bond should be requested for the project. All of the foregoing operated under the assumption that the replacement of equipment and the construction incidental to that did not require a bond. The principals employed at FMI had a satisfactory work history on similar projects. Their qualifications were investigated by Mr. Cowling, the assistant superintendent. No prior poor work performance was discovered. Under the terms of the FMI contract, the Board was to receive and approve a list of subcontractors before FMI was to "commence the installation of the System." There was no requirement that FMI submit a list for subcontractors of subcontractors. After commencement of the installation of the system, the Board and several of its individual members were sued for amounts allegedly owed Miller Electric, a subcontractor of a subcontractor on the FMI project. That suit brought to light the issue of the performance bond, or lack thereof, and the discovery that an individual, identified in the record as Armondo Diaz, had somehow obtained the balance of $167,000 from the Shawmut Bank. Such monies represented the final draws due on the FMI project. Respondent, however, did not authorize the final draw from the bank nor is there any evidence that he supported Mr. Diaz in that matter. Subsequently, the Board sued the bank over the release of the funds and settled the suit with Miller. Whether the $167,000 (quickly released) would have settled Miller Electric's claim is unknown. Certainly, it would have greatly reduced it. At the time of Respondent's departure from employment, the FMI system was operating in seven of the twelve schools in an acceptable manner. The other five schools were operational but not to the efficiency level anticipated. The Respondent acted reasonably in the selection and award of the contract to FMI, the administration of the project, and is not responsible for the improper release of the final draw. Three Board members testified that they have lost confidence in Respondent's ability to perform the duties of staff engineer/project manager. None of the three had registered complaints regarding his work performance with Respondent or his supervisor, Mr. Cowling, prior to the Board meeting April 23, 1991. None of the three Board members was able to articulate the factual basis for her lost confidence when asked to do so in December, 1991. The Respondent meets all of the qualifications for employment as staff engineer/project manager as that job title is described by the Board. The Respondent acted appropriately and within the scope and description of his job duties on each of the following projects: Stone Middle School; asbestos; Anderson Elementary School; Southwest Junior High School; Cambridge Elementary School; Viera; and FMI.
Recommendation Based on the foregoing, it is RECOMMENDED: That a final order be entered appointing Respondent to the position of staff engineer/project manager with all back pay and benefits withheld him from the date of his termination. DONE and ENTERED this 31st day of July, 1992, in Tallahassee, Leon County, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 31st day of July, 1992. APPENDIX TO CASE NO. 91-5645 RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE PETITIONER, THE SCHOOL BOARD: It should be noted that Petitioner did not number the paragraphs in its proposed findings of fact. The numbers indicated below were assigned as follows: paragraphs 1 through 20 related to Respondent's general job description and responsibilities; paragraphs 21 through 31 are under the heading related to Viera; paragraphs 32 through 53 are under FMI; paragraphs 54 through 66 are under the Stone Middle School heading; paragraphs 67 and 68 are under Southwest Jr. High School; paragraphs 69 through 73 are under the asbestos heading; and 74 through 79 are under Cambridge Elementary School heading. No proposed findings of fact were submitted for the allegations related to Anderson Elementary School. Paragraphs 1 through 16 are accepted but do not necessarily reflect accurate quotes of the cited material as there are minor, insignificant irregularities. Paragraph 17 is rejected as contrary to the weight of the evidence. While it is accepted that three board members testified they had lost confidence in Mr. Barna, it is not concluded that they had objective reasons for that opinion prior to the vote on the Superintendent's recommendation. Paragraph 18 is accepted. With regard to paragraph 19, it is accepted that the job description had been held by Mr. Barna prior to the Board decision and would have been afterwards had they accepted the Superintendent's recommendation. Paragraphs 20 and 21 are accepted. Paragraph 22 is rejected as irrelevant. Paragraph 23 is accepted. Paragraph 24 is rejected as contrary to the weight of the credible evidence. Paragraph 25 is accepted. With regard to paragraph 26, it is accepted that some, but not all, of the changes addressed by change order 1 were completed prior to the submission of the item to the Board. Paragraph 27 is rejected as contrary to the weight of the evidence, and contrary to the facts established at hearing. Mr. Barna did not authorize changes without making his superiors aware of the items to be considered. The contract speaks for itself as to his authority. Paragraph 28 is rejected as contrary to the weight of the evidence; see also comment re: paragraph 27 above. With regard to paragraph 29, it is accepted that change order 1 represented an increased cost to the project; otherwise rejected as not supported by the record cited. Paragraph 30 is accepted but is irrelevant since evidence established that Mr. Barna did not approve some of the changes to the project and that they were done without any authorization. Paragraph 31 is accepted but is irrelevant; Mr. Barna did not stand as the guarantor on the work performed by others. Paragraph 32 is accepted. Paragraph 33 is rejected as contrary to the weight of the evidence. Paragraphs 34 and 35 are accepted. Paragraph 36 is rejected as not supported by the record cited; weight of the evidence supports the fact that Miller Electric was a subcontractor for a subcontractor and that the contract did not require the disclosure of subs of subs. Paragraph 37 is rejected as contrary to weight of the evidence; see comment paragraph 36 above. Paragraph 38 is accepted but is irrelevant. Paragraph 39 is accepted but is irrelevant. Paragraph 40 is rejected as contrary to the weight of the evidence. Paragraph 41 is rejected as irrelevant. Paragraph 42 is rejected as contrary to the weight of the credible evidence. Paragraph 43 is rejected as not supported by the evidence; to the extent that the paragraph suggests Mr. Barna was generally familiar with bond requirements and that he compiled "boiler plate" forms it can be accepted, otherwise must be rejected since no evidence that Mr. Barna prepared or drafted documents. The bond form on its face shows it is an AIA document A310 form. Paragraph 44 is rejected as argument. Paragraph 45 is rejected as a conclusion of law. The facts of this case establish that no one associated with the School Board side of the project realized it was, or should have been, a bond job until the lawsuit was filed. Had anyone suspected a bond should be required, it would have been requested. Mr. Barna was not at fault for not requesting a bond anymore than Mr. Walker was, or Mr. Cowling, or Mr. Collingsworth, or the individual Board members who know when bonds are required. Paragraph 46 is rejected as contrary to the weight of the evidence. Paragraph 47 is rejected as contrary to the weight of the evidence as it suggests Mr. Barna knew a bond was required (as it was a construction job); clearly, neither he nor anyone else realized a bond would, or should, be required. Paragraph 48 is rejected as irrelevant. Paragraph 49 is rejected as contrary to the weight of the evidence. Paragraph 50 is rejected as irrelevant. Paragraph 51 is accepted. Paragraph 52 is contrary to the weight of the evidence. Paragraph 53 is contrary to the weight of the evidence. Paragraphs 54 through 57 are accepted. Paragraph 58 is rejected as a conclusion of law not supported by the record and contrary to the weight of the evidence. Paragraph 59 is rejected as a conclusion of law not supported by the record and contrary to the weight of the evidence. Paragraph 60 is accepted but is irrelevant. Paragraphs 61 through 66 are rejected as contrary to the weight of the evidence, irrelevant, or assuming facts or conclusions of law not evidence. Paragraph 67 is accepted. Paragraphs 68 through 73 are rejected as contrary to the weight of the evidence, conclusions based upon facts not in evidence, or irrelevant. Paragraph 74 is accepted. With regard to paragraph 75, it is accepted that Mr. Barna represented that drainage would be improved by the proposed easement drainage; as to the suggestion that Mr. Barna assured "no water" would be drained unto the property, such proposed fact is rejected. Paragraphs 76 and 77 are rejected as contrary to the weight of the evidence. The Board's decision to accept the concept was not solely based upon Mr. Barna's recommendation. Paragraph 78 is accepted. Paragraph 79 is rejected as irrelevant, beyond the scope of this proceeding, and to the extent it suggests Mr. Barna to be at fault, is contrary to the weight of the evidence. Mr. Barna was not responsible for drainage problems at the school. RULINGS ON THE PROPOSED FINDINGS OF FACT SUBMITTED BY THE RESPONDENT, BARNA: 1. Paragraphs 1, 2, 7 through 18, 20, 22, 23, 25 through 38, 41, 43, 46 through 56, 58 through 61, 66 through 71, 77 through 79, 93 through 97, 101, 102 through 105, 109 through 111, 113, 114, 116, 120, 123, 124, 127, 129, 130, 132, 135 through 146, 148, 149, 151 through 157, 159, 160, 162 through 165, 167 through 169, 171, 172, 174, 176, 177, 179, 181, 182, 186, 188, 189, 190, 191 are accepted. Paragraphs 3, 4, and 5 are accepted but are irrelevant. Paragraph 19 is rejected as irrelevant; reiteration of charges, not fact; or argument. With regard to paragraph 21, it is accepted that projects described in statement of cause were extent of Board consideration (if that); otherwise, not supported by record cited. 5. Paragraph 24 is rejected as irrelevant and argument. 6. Paragraph 39 is rejected as repetitive or argument. 7. Paragraph 40 is rejected as argument. 8. Paragraph 42 is rejected as conclusion of law. 9. Paragraph 44 is rejected as restatement of document not fact. 10. Paragraph 45 is rejected as argument or comment. 11. Paragraph 57 is rejected as restatement of document not fact and argument. Paragraph 62 is rejected as hearsay not supported by direct evidence. Paragraph 63 is rejected as restatement of document not fact and argument. Paragraph 64 is rejected as comment, not fact. Paragraph 65 is rejected as hearsay not supported by direct evidence. Paragraphs 72 and 73 are rejected as recitation of testimony. Paragraph 82 is rejected as restatement of document not fact and irrelevant. Paragraph 83 is rejected as irrelevant. Paragraph 84 is accepted but is irrelevant to this case. Paragraphs 85 and 86 are rejected as argument. Paragraph 87 is rejected as restatement of document not fact. Paragraph 88 is rejected as argument. Paragraph 89 is accepted but is irrelevant to this case. Paragraph 90 is rejected as restatement of document not fact. Paragraphs 91 and 92 rejected as argument and recitation of testimony. Paragraph 98 is rejected as irrelevant. Paragraph 99 is accepted but is irrelevant to this case. Paragraph 100 is rejected as restatement of document not fact. Paragraph 106 is accepted but is irrelevant to this case. Paragraphs 107 and 108 are rejected as restatement of document not fact. Paragraph 112 is accepted to the extent that the terms outlined were Mr. Barna's understanding but such terms were not reduced to writing in accordance with the Board's directive. Why the easement was signed prior to an agreement being drafted and approved by the Board is unknown. No evidence suggests Mr. Barna was responsible for the oversight. With regard to paragraph 115, see comment regarding paragraph 112 above. Paragraph 117 is rejected as irrelevant. Paragraph 118 is accepted but is irrelevant to this case. Paragraph 119 is rejected as restatement of document not fact. Paragraph 122 is rejected as argument. Paragraph 128 is rejected as not supported by evidence cited. Paragraph 131 is rejected as hearsay. Paragraph 133 is rejected as hearsay. Paragraph 134 is rejected as restatement of document not fact. Paragraph 147 is accepted but is irrelevant to this case. Paragraph 150 is rejected as restatement of document not fact. With regard to paragraph 155, the phrase "which ultimately recommended" should be added before "FMI" to clarify the statement instead of "recommending." Paragraph 158 is rejected as restatement of document not fact. Paragraph 161 is rejected as restatement of document not fact. With regard to paragraph 166, it should be added that at all material times to the review of the project before the letting of the job, the FMI project was considered as described. Paragraph 170 is accepted with the substitution of the word "acceptably" for "perfectly." It is the view of the trier of fact that no system can be perfect. Paragraph 173 is rejected as contrary to the weight of the evidence. From this record it would appear that Mr. Walker gave no definitive statements regarding the FMI project. Paragraph 175 is rejected as contrary to the weight of the evidence. It is accepted that Mr. Barna and Mr. Walker, together with other persons in authority, discussed the FMI project. Paragraph 178 is rejected as argument. Paragraph 180 is rejected to the extent it concludes funds were obtained by fraud; clearly that is the Board's position as no one authorized the final draw. Paragraph 183 is accepted but is irrelevant to this case. Paragraph 184 and 185 are rejected as argument not fact. Paragraph 187 is rejected as irrelevant and argument. Paragraphs 192 through 196 are rejected as argument, conclusion of law, or not supported by the weight of the evidence. COPIES FURNISHED: Stanley Wolfman David J. Wolfman STANLEY WOLFMAN, P.A. 200 W. Merritt Island Causeway Post Office Box 540513 Merritt Island, Florida 32954-0513 Louis V. Cianfrogna James H. Earp CIANFROGNA, TELFER, REDA & FAHERTY, P.A. Suite 102 1990 West New Haven Avenue Melbourne, Florida 32904 Abe Collingsworth Superintendent of Schools Brevard County School District 2700 St. Johns Street Melbourne, Florida 32940
The Issue The issue in this case is whether Respondent failed to include his professional license number on contractual documents, committed mismanagement or misconduct in the performance of contracting services, abandoned construction projects, and was incompetent or mismanaged work he performed.
Findings Of Fact Petitioner is the state agency responsible for, inter alia, licensing general construction contractors in the State of Florida. Its headquarters is located in Tallahassee, Florida. Respondent is a certified general contractor, who has qualified two businesses under his license: Arizen Homes, Inc., and Islander Builders, Inc. Respondent's two licenses, both of which are currently active, are Nos. CG-C1104399 and CG-C1204399. Respondent has two addresses of record with Petitioner: 1862 Pier Point Street, North Port, Florida, and 2700 West Cypress Creek Road, No. B-111, Ft. Lauderdale, Florida. Shanahan Project On or about December 21, 2005, Respondent contracted with Steve Shanahan to build a home at 3416 6th Street Southwest, Lehigh Acres, Florida. (An amended contract was prepared on January 23, 2006, and an addendum was added on February 8, 2007.) The contract price was $292,300. The contract did not contain Respondent's license number on it. Shanahan paid Respondent a deposit on the contract amount by way of four checks totaling $14,865. Shanahan did not own the lot on which the house was to be built by Respondent. One of the checks (in the amount of $250) Shanahan sent to Respondent was for "lot evaluation." That is, Shanahan paid Respondent to determine the adequacy of the lot for the proposed house, which Respondent presumably did. Shanahan was relying on Respondent to assist him (Shanahan) with the purchase of the lot. Early in 2006, Shanahan began calling Respondent to ascertain why no work was being done on the site. He was advised by "Michael" at Respondent's office that the project was going to take a little longer than expected. An addendum to the contract was prepared in February 2008, extending the deadline for completion from two years to three years. Shanahan signed the Addendum. No work has been done on Shanahan's house. The contract with Respondent was never terminated. None of Shanahan's deposit money was returned to him. Respondent is not financially able to do any work on Shanahan's home at this time. Hall Project By contract dated October 22, 2006, Respondent agreed to construct a house for Dornant Hall at 1017 State Avenue, Lehigh Acres, Florida. The contract amount was $372,960. The contract did not include Respondent's license number. Hall paid Respondent a deposit of $17,648 by way of two separate checks. The contract between Hall and Respondent was never terminated. No work has been done on the proposed house, nor is Respondent financially able to work on the project at this time. Hall did not receive any of his deposit back from Respondent. Gordon/Suarez Project On June 10, 2006, Respondent contracted with Arthur Gordon and Alma Suarez to construct a house for them at 1311 Southwest 38th Terrace, Cape Coral, Florida. The contract amount was $404,039 for the lot, the house, and a pool. The contract between Gordon/Suarez and Respondent did not include Respondent's license number. Gordon/Suarez paid for the lot on which the home was to be built. An additional deposit of $44,411 was paid to Respondent either by way of checks or draws from the construction loan. Some of that amount may have been for impact fees or permits relating to construction, but the permits were never picked up from the city or county by Respondent. The contract between Respondent and Gordon/Suarez was never terminated. The house called for in the contract was never built. Gordon/Suarez did not receive their deposits back. Gordon/Suarez ultimately contracted with another builder to construct a home on the site. The house built for Gordon/Suarez had more options than the one planned by Respondent and cost less. However, Gordon/Suarez never got their money back from Respondent. Respondent's Position Respondent has been a builder since 1972 and a licensed general contractor in Florida since at least 1990 (the date Island Builders, Inc., was licensed). Respondent was building homes in Lee and Charlotte counties for many years. In total, Respondent built approximately 200 to 300 homes in that geographic area and had plans to expand to other counties as well. For most of its existence, Respondent relied upon a line of credit from lenders to fund construction projects. Once a contract with a client was finalized, Respondent would take a small deposit, then begin construction using money from the line of credit. The line of credit was sometimes also used to purchase lots on which to build the homes. From September 2006 through July 2007, Respondent began to experience great difficulty closing construction projects. The real estate boom had reached its climax and was beginning to quickly diminish. Appraisals of projects were going down. Respondent could not match competitors which owned their own lots. It was a difficult time for Respondent financially. In 2007, Respondent had approximately 100 houses in various stages of development. About one-half of those homes had received Certificates of Occupancy so that the buyers could move in once the closing was held. However, many buyers did not close on the deals for a number of reasons. Some could not get an appraisal of the home high enough to justify the mortgages for which they had applied. Others simply got "cold feet" as a result of the economic situation in the state. Many buyers simply did not show up at the scheduled closing. Buyers began to ask Respondent for discounts at closing, meaning that Respondent was losing money on many projects. In response, Respondent began negotiating with its lenders, seeking for a discount from them to match the discounts being requested by buyers. Respondent asked its bank for a 30-percent discount; the request was denied. Respondent asked for 16-percent; that was also denied. Finally, in May 2008, negotiations between Respondent and its lenders ended. The banks refused to give Respondent any leeway on the amounts owed on the construction loan lines of credit. The banks refused to enter into an agreement to purchase the houses with Certificates of Occupancy in order to generate capital to pay off the line of credit. The effect of termination of discussions between Respondent and the banks was to place Respondent in bankruptcy. That effectively ended Respondent's ability to do any further work on its clients' houses. And because all of Respondent's funds were tied up in bankruptcy, Respondent could not offer any refunds to his aggrieved clients. Respondent also offered to finish all the pending projects for the banks, allowing the banks to then negotiate settlements with the buyers, but that offer was refused as well. Respondent did not refund the deposits paid by Shanahan, Hall, and Gordon/Suarez. Based on the pending bankruptcy, Respondent does not have the current ability to make such refunds.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a final order be entered by the Department of Business and Professional Regulation, Construction Industry Licensing Board, finding Respondent guilty of violating Subsection 489.129(1), Florida Statutes, and that: (1) a fine of $9,750 be imposed and that Respondent be required to pay $841.09 in costs; and (2) Respondent's license be suspended until such time as all fines and costs have been paid. All claims for restitution by the aggrieved parties will need to be filed in the bankruptcy court proceeding. DONE AND ENTERED this 13th day of April, 2009, in Tallahassee, Leon County, Florida. R. BRUCE MCKIBBEN 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 13th day of April, 2009. COPIES FURNISHED: G. W. Harrell, Executive Director Construction Industry Licensing Board Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Ned Luczynski, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Val L. Osinski, Esquire Law Offices of Val L. Osinski 9600 West Sample Road, Suite 304 Coral Springs, Florida 33065 Lisa Livezey Comingore, Esquire Tiffany A. Harrington, Esquire Sorin Ardelean, Esquire Department of Business and Professional Regulation 1940 North Monroe Street, Suite 42 Tallahassee, Florida 32399-2202
The Issue Whether Respondent's intended rejection of all responses to its solicitation of "qualifications" from entities interested in contracting with Respondent to perform construction management at risk services in connection with a project at Fort Lauderdale High School is illegal, arbitrary, and/or dishonest, as alleged by Petitioner.
Findings Of Fact Based on the evidence adduced at hearing, and the record as a whole, the following findings of fact are made: Respondent is a district school board responsible for the operation, control and supervision of all public schools (grades K through 12) in Broward County, Florida (including, among others, Fort Lauderdale High School) and for otherwise providing public instruction to school-aged children in the county. As authorized by Florida Administrative Code Rule 6A- 1.012, Respondent has "establish[ed] purchasing rules" (denominated as "policies"). Respondent's Policy 3320 contains Respondent's "Purchasing Policies." Part III of Respondent's Policy 3320 prescribes "Purchasing Policies" for Respondent's Facilities and Construction Management Division, and it provides, in pertinent part, as follows: All additions, modifications, and alterations to School Board properties shall conform with the State Requirement for Educational Facilities (SREF), Florida Building Code (FBC) and the laws of the State of Florida. School Board administrators shall obtain assistance in preparing bid specifications and applicable building permit(s) from the Facilities and Construction Management division for these items. Part VIII of Respondent's Policy 3320 addresses the subject of "protests arising from the competitive solicitation process" and incorporates the protest procedures found in Section 120.57(3), Florida Statutes. Respondent's Policy 7003 is entitled, "Pre- Qualification of Contractors and Selection of Architects, Engineers, Design Builders, Construction Managers, and Total Program Managers Pursuant to the Consultants Competitive Negotiation Act." It provides, in pertinent part, as follows: The School Board shall pre-qualify bidders for construction contracts, and, publicly announce, in a uniform and consistent manner, each occasion when construction and/or professional services are required to be purchased in compliance with governing statutes and regulations. The Superintendent shall establish procedures for the pre-qualification of contractors and selection of architects, engineers, design- builders, construction managers and total program managers consistent with this policy, applicable statutes and State Requirements for Educational Facilities (SREF). Rules The School Board authorizes the Superintendent to: Receive applications for Contractor Pre- Qualification on the attached application form in compliance with FS 1013.46 and SREF 4.1(8), as amended. . . . * * * 4. Designate an evaluation committee of eleven (11) voting members for the purpose of Pre-Qualification of contractors and selection of architects, engineers, design builders, construction managers and total program managers. * * * The committee shall make recommendations to the Superintendent regarding the pre- qualification of contractors. The Superintendent shall make recommendations to the Board: Along with a report from the committee containing findings of fact indicating the proposers' compliance with the procurement requirements and scoring criteria and the Board shall have the final approval of such recommendations. The Contractor Pre-Qualification Application Form "attached" to Policy 7003 contains the following description of the contractor pre-qualification process: The School Board ("Board") through the Superintendent or his/her designee, shall pre-qualify all "contractors" for construction contracts, and any other contracts that require a certificate issued pursuant to Chapter 489, Florida Statutes, including, but not limited to, all bidders, construction managers, design-builders, job- order contractors, term contractors, and all other types of contractors on an annual basis or for a specific project according to the rules set forth in the State Requirements for Educational Facilities (SREF) Section 4.1(8). Contractors shall be pre-qualified on the basis of the criteria set forth in SREF and included in the foregoing application form. In addition to the foregoing criteria the applicant shall provide the Dun and Bradstreet report indicated in the application. The evaluation committee shall be as set forth in Board Policy 7003. The applicant shall complete the form in its entirety and submit all required documents by the deadline set forth in the public announcement. Separate applications shall be submitted for each desired contracting category. The School Board of Broward County shall receive and either approve or reject each application for prequalification within sixty (60) days after receipt of application in its entirety and all required documents. Approval shall be based on the criteria and procedures set forth in SREF. The Board shall issue to all pre-qualified contractors a certificate valid for one (1) year from the date of approval or for the specific project(s). That certificate shall include the following: A statement indicating that the contractor may bid, propose, or otherwise be considered, on the specific project(s) or for this specific time period. A statement establishing the total dollar value of the work the contractor will be permitted to have under contract with the Board at any one time. The maximum value shall not exceed the contractor's bonding capacity or ten (10) times the net quick assets. A statement establishing the maximum dollar value of each individual project the contractor will be permitted to have under contract with the Board at any one time. The maximum value of each project may be up to twice the value of the largest similar project previously completed but shall not exceed the Contractor's bonding capacity or ten (10) times the net quick assets. A statement establishing the type of work the contractor will be permitted to provide. The expiration date of the certificate. It shall be the responsibility of the contractor to renew annually certificates not for a specific project. Financial statements or written verification of bonding capacity on file with the Board shall be updated annually. Failure to submit a new statement or verification of bonding capacity within thirty (30) days written notice by the Board shall automatically revoke a pre-qualification certificate. 1. Pre-qualified contractors may request a revision of their pre-qualification status at any time they believe the dollar volume of work under contract or the size or complexity of the projects should be increased if experience, staff size, staff qualifications, and other pertinent data justify the action. These procedures are in accordance with requirements set forth in Section 4.1 of the State Requirements for Educational Facilities. As the parties stipulated in Admitted Fact 6, "[o]n May 20, 2008, [Respondent] approved the Request for Qualifications No. 2008-030-FC (RFQ) entitled 'Construction Management at Risk Services for Districts 2, 3 and 4 Projects (Cooper City High School - Project No. 1931-99-02; Fort Lauderdale High School – Project No. 0951-27-01; Margate Elementary School – Project No. 1161-26-01; and Northeast High School – Project No. 1241-27-01),' and authorized the public announcement of the RFQ." "[In] [t]he summary explanation and background [section of] the Agenda Request Form [for this agenda item, it was] stated that the 'Facilities and Construction Management staff recommend[ed] the procurement of construction services utilizing Construction Management at Risk delivery method due to the complexity, scope and scale of the projects.'" This "delivery method" is to be distinguished from the "hard bid" or "design/bid/build" method of procurement, where a contractor is hired only after "the construction documents are completed." Under the "Construction Management at Risk delivery method," contrastingly, the construction manager typically assists in the development and "complet[ion]" of the "construction documents," offering advice and recommendations to maximize quality and cost efficiency. As a result, it is "not uncommon" for there to be post-solicitation changes in a project's scope and budget when this "delivery method" is employed. As the parties stipulated in Admitted Fact 7, "[a]t the time of [Respondent's] approval of the RFQ, the portion of the RF[Q] pertaining to [the FHS Project] had an advertised Proposed Construction Budget of $29,150,340 and a project scope which was described [in RFQ] as follows: 'Concurrent replacement in two phases to include: Phase I – Construct a 3- story Administration Classroom Building of 68,940 GSF to include Administration, 3 general classroom[s], 5 resource rooms, 4 Science Labs and related spaces, a 4-classroom ESE Suite, 1 Business Technology Lab, 1 Family and Consumer Science (ProStart) Lab, 1 Health Occupations Lab, 1 Pre-Law Public Service Education Lab, Custodial spaces, Textbook Storage and Student, Staff and Public Restrooms. Demolish Buildings 1, 2, 3, 4, 11, 12, 13 and 14.'" Phase II of the project was, at the time, described in the RFQ as follows: "Construct Parent drop off & pick up area and Staff/Visitor Parking; Construct Regional Athletic Facility; Renovate Building 8 into Science Labs; Demolish existing tennis courts & replace with 6 tennis courts; Demolish Swimming Pool; Construct basketball courts; Resurface Student Parking." These descriptions represented the "initial concept" of the FHS Project (the design of the project having been then only in the "conceptual stage" of development). Respondent wanted to have the benefit of the input and advice of a construction manager (working together with the architect selected for the project) in developing the project's design beyond the "conceptual stage." As the parties stipulated in Admitted Facts 12 through 19, "[b]etween the initial public release of the RFQ and the submission of proposed qualifications, [Respondent] issued seven (7) addenda revising the RFQ's terms and conditions," with "Addendum No. 4 chang[ing] the scope of the [FHS Project] component of the RFQ as follows": Delete the scope in Phase I to demolish Building #4. Delete the scope in Phase II to construct basketball courts and to resurface student parking. Revise the words "replace with 6 tennis courts" to be the words "construct five (5) tennis courts." Clarify phasing: In Phase I, demolish the existing track and athletic field and relocate existing baseball field. Clarify scope: In Phase II, for the staff parking construct a 3-story parking structure including required access road work. Clarify scope: Phase II includes renovation of existing courtyard to provide ADA access to existing gymnasium and auditorium. (Emphasis, by bolding, supplied in original). Addendum No. 6 "[r]evised the [RFQ's] Submittal Due Date to read 'No later than 2:00 p.m. on September 3, 2008.'" As the parties stipulated in Admitted Fact 20,"[a]fter [the] issuance of Addendum No. 7 to the RFQ, the scope of the [FHS Project] component of the RFQ was described as follows [with strike-throughs and underlining indicating, respectively, post-issuance deletions and additions]: Concurrent replacement in two phases to include: Phase I – Construct a 3-story Administration Classroom Building of 68,940 GSF to include Administration, 3 general classroom[s], 5 resource rooms, 4 Science Labs and related spaces, a 4-classroom ESE Suite, 1 Business Technology Lab, 1 Family and Consumer Science (ProStart) Lab, 1 Health Occupations Lab, [1 Pre-Law Public Service Education Lab], Custodial spaces, Textbook Storage and Student, Staff and Public Restrooms. Demolish the existing track and athletic field and relocate existing baseball field. Demolish Buildings 1, 2, 3, 4, 11, 12, 13 and 14. Phase II – Construct Parent drop off & pick up area and a 3-story parking structure including required road access work for Staff Parking and /Visitor Parking[.] Construct Regional Athletic Facility[.] Renovate building 8 into Science Labs[.] Demolish existing tennis courts & replace with 6 tennis courts construct five (5) tennis courts. Demolish Swimming Pool. Renovate existing courtyard to provide ADA access to existing gymnasium and auditorium. Construct basketball courts. Resurface Student Parking." As the parties stipulated in Admitted Facts 10 and 11, on August 26, 2008, the date that Respondent issued its final addendum to the RFQ (Addendum No. 7), it also issued a Revised Public Announcement publicizing the issuance of the RFQ (as revised by the seven addenda). The Revised Public Announcement read, in pertinent part, as follows: In order to supplement the expertise of the Facilities and Construction Management Department, the Superintendent of Schools, pursuant to Florida Statutes, announces that The School Board of Broward County, Florida, is in need of Construction Management Services, related to new construction and renovations of educational facilities. Pursuant to this request for qualifications, The Board will consider contracts with one of more proposers to provide these services. Services under this contract include, but are not limited to the following items and shall be in accordance with SREF [State Requirements for Educational Facilities] 1999 Chapter 4: Bid and award activities including managing bidder listing, addendum, bidding, proposals, schedule of values, contracts, guaranteed maximum price, value engineering, and bonds. Construction activities including managing meetings, contract administration, monitoring procedures, contract records, inspections, non-conformances, owner- supplied equipment, testing, project accounting, and construction services. Warranty activities including managing claims and periodic inspections. Provide other basic services as required. Refer to the Request for Qualifications for more detailed project scopes. * * * RFQ No. 2008-30-FC Project Nos. 0951 27 01/P000687 Fort Lauderdale High School (proposed construction budget $29,150,340): Phase replacement in 2 phases to include: Phase I - Demolish selected buildings, tennis courts, swimming pool, track and athletic field. Construct a 3-story Administration Classroom Buildings[2] of 68,949 GSF; parent drop off/pick-up area and visitor parking; 5 tennis courts. Relocate existing baseball field. Phase II - Demolish selected building. Construct a 3-story parking structure including required access road work; Regional Athletic Facility. Renovate existing courtyard for ADA access to Gym and Auditorium. Renovate Building 8 into Science Labs. * * * Award: Project will be awarded by Facility. Proposed Construction Budget: Includes all costs inclusive of the Construction Manager's fees, Cost of Work, and any other costs related to construction. Minimum Selection Criteria: Will include the following as a minimum, (refer to document RFQ, Article X Submittal Requirements for expanded list of selection criteria): The company's history, structure, personnel, licenses, and experience. Related projects similar in scope or amount completed by the company, including name of client or its representative. Financial information such as balance sheet and statement of operations and bonding capacity. Project management, scheduling and cost control systems the company uses for similar projects. Proposed minority business involvement in the project. . . . Cost control, value engineering techniques and constructability reviews. Description of litigation, major disputes, contract defaults and liens in the last five (5) years. Interview. Confirmation of references. Consideration of the volume of work previously awarded to each firm, with the object of effecting an equitable distribution of contracts among qualified firms, provided such distribution does not violate the principle of selection of the most qualified firms. * * * The completed RFQ response must be delivered . . . . NO LATER THAN 2:00 PM SEPTEMBER 3, 2008 * * * Qualifications Selection Evaluation Committee (QSEC): After submission, proposers will be evaluated by the Qualification Selection Evaluation Committee (QSEC) based upon the above minimum criteria. The QSEC will select no less than three (3) proposers, ranked in order of tabulated score. The QSEC will recommend the finalist(s) for award of contracts to Construction Managers to the Superintendent. The Superintendent shall either recommend award of contract(s) to the finalist(s) selected by the QSEC or recommend rejection of all proposals to the Board. After the Board approves the recommendations of the QSEC the Board will authorize the Superintendent, or designee, to negotiate a contract for services for fees to provide direct management of the Construction Management at Risk Contract. Recommendations by the Qualification Selection Evaluation Committee do not guarantee a contract will be awarded by the Board. Award of a contract does not guarantee that work will be issued. Fees will be negotiated in accordance with Board Policy 7003 and Section 287.055, F.S. Article I of the RFQ (as revised) listed "General Requirements" that "proposers [had to] meet" "[i]n order to be considered." As the parties stipulated in Admitted Fact 21, Article I.D. of the RFQ (as revised) provided, in pertinent part, as follows: All proposers must be prequalified according to 1013.46 F.S., SREF 4.1(8), and Board Policy 7003 at the time of submittal due date to this RFQ. Article I.H. of the RFQ (as revised) provided as follows: The School Board of Broward County, Florida reserves the right to reject any or all responses, to waive technicalities, or to accept the proposal that, in its sole judgment, best serves the interest of The School Board of Broward County, Florida. Article II of the RFQ (as revised) described the "Selection Process." As the parties stipulated in Admitted Fact 22, Article of the RFQ (as revised) "was entitled 'Proposal Review by Staff' and stated as follows": Facilities and Construction Management Division staff will conduct a review of the proposer's submittal to determine whether the proposer meets the terms of this RFQ, requirements of the Florida Statutes, State Requirements for Educational Facilities regulations, Florida Building Code, and any other code, statute, or standard applicable at the time of response. Facilities and Construction Management Staff will provide information to the QSEC Members showing payments made by the district to the proposing firms over the past three (3) years. Non-compliant proposals will be recommended to the committee for rejection. As the parties stipulated in Admitted Fact 23, Article of the RFQ (as revised) "was entitled 'Shortlist Selection' and stated as follows": The QSEC Members will assign points to each proposer, for each facility, based upon the Selection Criteria below and attached Selection Criteria Score Sheet in the shortlist evaluation process. Each QSEC Member shall assign points for each proposer according to the selection criteria and rank them according to their scores. The proposer receiving the most points by a QSEC Member will be considered the first choice of that QSEC Member. The firm that receives the most first choice votes from the committee will be the top-ranked proposer. The second-ranked proposer will be the proposer that receives the most points, other than the proposer who was already selected as the top-ranked, and so on. In the event of a tie a voice vote will be taken until the tie is broken. If the voice vote is not unanimous, then a roll-call vote will be taken. The selection process will establish a "shortlist" for each facility/project of not less than three (3) proposers and no more than five (5) proposers submitting proposals. Shortlist selection will be done by each facility. Article II.E. of the RFQ (as revised) called for "[p]resentations" to be made to the QSEC by the shortlisted proposers. As the parties stipulated in Admitted Fact 24, Article II.G. of the RFQ (as revised) "was entitled 'Final Selection' and stated as follows": The QSEC will interview and rank the shortlisted firms. The QSEC will assign points to each proposer, for each facility, utilizing the Selection Criteria and point schedule included with the Selection Criteria Score Sheet to finalize the selection. Note, M/WBE staff will provide scores for M/WBE categories. However, such scores are recommendations by M/WBE staff and may be adjusted by individual QSEC Members. Each QSEC Member shall assign points for each proposer according to the selection criteria and rank them according to their scores for each project/facility. The proposer receiving the most points by a QSEC Member will be considered the first choice of that QSEC Member. The proposer that receives the most first choice votes from the committee will be the top-ranked proposer. The second-ranked proposer, will be the proposer that receives the most points, other than the proposer who was selected as the top-ranked proposer, and so on. In the event of a tie a voice vote will be taken until the tie is broken. If the voice vote is not unanimous, then a roll- call vote will be taken. The QSEC will recommend the finalist(s) for award of contract to Construction Manager to the Superintendent. The Superintendent shall either recommend award of contract(s) to the finalist(s) selected by the QSEC or recommend rejection of all proposals to the Board. After the Board approves the recommendations of the QSEC the Board will authorize the Superintendent, or designee, to negotiate a contract with the top-ranked firm according to Section 287.055, F.S. The Board shall have final approval of such recommendations. Final selection will be done by each facility. Article II.H. of the RFQ (as revised) contained the "Minimum Selection Criteria." This provision read as follows: Minimum Selection Criteria: Will include the following as a minimum, (refer to this document Article XI Submittal Requirements for expanded list of selection criteria): The company's history, structure, personnel, licenses, and experience. Related projects similar in scope or amount completed by the company, including name of client or its representative. Financial information such as balance sheet and statement of operations and bonding capacity. Project management, scheduling and cost control systems the company uses for similar projects. Proposed minority business involvement in the project (refer to this document Article I, J for requirements). Cost control, value engineering techniques and constructability reviews. Description of litigation, major disputes, contract defaults and liens in the last five (5) years. Interview. Confirmation of references. Consideration of the volume of work previously awarded to each firm, with the object of effecting an equitable distribution of contracts among qualified firms, provided such distribution does not violate the principle of section of the most qualified firms. As the parties stipulated in Admitted Fact 25, Article III of the RFQ (as revised) "[was] entitled 'Competitive Negotiations' and state[d] as follows": After the QSEC ranks the firms, recommends the finalist(s) to the Superintendent, and the Superintendent recommends the finalist(s) to the Board[,] [t]he Superintendent, or designee will negotiate a contract for services for fees to provide direct management cost of the CM and Guaranteed Maximum Price (GMP). The CM contract shall maintain an "open book" project accounting process, with any savings returned to the Board. Should the negotiations not result in a contract with the finalist at a price determined by both parties to be customary, fair, competitive, and reasonable, negotiations with that firm shall be formally terminated. The Superintendent, or designee, shall undertake negotiation with the second most qualified firm and thereafter, if necessary, with the third firm. Should the Board be unable to negotiate a satisfactory contract with any of the selected firms, additional firms will be selected in accordance with the above- described procedure. Negotiation should continue in accordance with Section 287.055, F.S., or until the Board determines not to proceed and to re-advertise and repeat the process. Article IV of the RFQ (as revised) addressed the "Scope of Services." It simply provided as follows: "Refer to attached Agreement Between Owner and Construction Manager for requirements." Article 3 of the "attached Agreement Between Owner and Construction Manager" (Sample Contract) enumerated the "Construction Manager's Services." Those services to be performed by the hired construction manager during the "Pre-Design Phase" were described in Article 3.2 of the Sample Contract as follows: The Construction Manager shall review project requirements, educational specifications, on and off-site development, survey requirements, preliminary budget, and make value engineering and constructability recommendations for revisions to the Owner and Project Consultant in the form of a written report prior to the final payment for this phase. The Construction Manager shall, subject to Owner's approval and compliance with existing Owner completion schedule, establish a preliminary master project schedule identifying all phases, Critical Path elements, responsibilities of the Owner, Project Consultant, outside agencies, third parties and any other impacts which would affect project schedule and progress and update them monthly throughout the duration of the contract. When the project includes renovation or expansion of an existing Facility, the Construction Manager will assist the Construction Team in preparing an analysis package outlining the condition of the existing Facility, existing structure, existing finishes, and existing equipment, code deficiencies, energy use, and life expectancy of other building systems by providing constructability, value engineering, and cost estimates recommendations. The package should contain the Construction Manager's recommendations, cost estimates and preliminary schedules. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for this phase. The Construction Manager shall prepare detailed cost estimates and recommendations to Owner and Project Consultant at S.D. (Schematic Design), D.D. (Design Development), C.D. (50% and 100% Construction Documents) phases of the project. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for each phase. The Construction Manager shall provide project delivery options for the design, bid, and bid packaging of the project for efficient scheduling, cost control and financial resource management. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for this phase. The Construction Manager shall utilize information and reporting systems to provide the Owner with monthly reports containing accurate and current cost controls, work status, including but not limited to Work narrative, Work completed/anticipated, short term and long term schedules, estimated expenditures, and project accounting systems of the project at all times. Such information shall be provided to the Owner and Project Consultant in the form of a written report, prior to final payment for this phase. The Construction Manager shall prepare a report with the Project Team's participation which shall describe, as a minimum, the Work plan, job responsibilities, and written procedures for reports, meetings, inspections, changes to the project, building systems, and delivery analysis and other relevant matters. Such information shall be provided to the Owner and Project Consultant prior to final payment for this phase. The Construction Manager shall provide market analysis and motivation for subcontractor interest and recommendations for minority business participation. This shall include analysis of the Construction Manager's historical data for subcontracting, communication with contractor and trade organizations requesting participation, review of the Owner's M/WBE data, advertising, outreach programs, mailings to all prospective bidders identified by these actions, and reporting of all of the for[e]going to the Owner. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for this phase. The Construction Manager's personnel to be assigned during this phase and their duties and responsibilities to this project and the duration of their assignments are shown on Exhibit D to the General Conditions. All required reports and documentation shall be submitted and approved by the Owner as pre-requisite to progress payments to the Construction Manager by the Owner during this phase. Those services to be performed by the hired construction manager during the "Design Phase" were described in Article 3.3 of the Sample Contract as follows: The Construction Manager will be required to attend all project related meetings and include a summary of the meeting of its monthly report to the Owner as specified in Document 01310. The Construction Manager will periodically review to the best of their abilities all Contract documents for constructability and compliance with applicable laws, rules, codes, design standards, and ordinances. Such information shall be provided to the Owner and Project Consultant in the form of a written report in the format as noted herein prior to final payment for this phase (Refer to exhibits G and H). The Construction Manager will be required to work with and coordinate [its] activities with any additional consultants, or testing labs and others that Owner provides for the project and report all findings as specified in Document 01310. The Construction Manager shall review all Contract documents for the new and existing buildings and/or building sites and provide value engineering recommendations to minimize the Owner's capital outlay and maximize the Owner's operational resources. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for this phase. All such recommendations shall be acknowledged and incorporated into the construction documents by the Project Consultant unless otherwise authorized by the Owner in writing. The Construction Manager will review construction documents and the new and existing buildings conditions and/or building site to reduce to the best of [its] abilities conflicts, errors and omissions and shall coordinate with the Project Consultant in order to eliminate change orders due to errors, omissions and unforeseen conditions. The Construction Manager shall periodically update the master project schedule and make recommendations for recovery of lost time. Such information shall be provided to the Owner and Project Consultant in the form of a written report prior to final payment for this phase. The Construction Manager will coordinate with the Project Consultant and provide to the Project Construction Team permitting applications and requirements for the projects. The Construction Manager will periodically update cost estimates and make recommendations to keep the project within the FLCC. AT COMPLETION OF THE CONSTRUCTION MANAGER'S REVIEW OF THE PLANS AND SPECIFICATIONS, EXCEPT ONLY AS TO SPECIFIC MATTERS AS MAY BE IDENTIFIED BY APPROPRIATE WRITTEN COMMENTS PURSUANT TO THIS SECTION, CONSTRUCTION MANAGER SHALL WARRANT, WITHOUT ASSUMING THE PROJECT CONSULTANT'S RESPONSIBILITES, THAT THE PLANS AND SPECIFICATIONS ARE CONSISTENT, PRACTICAL, FEASIBLE AND CONSTRUCTIBLE. CONSTRUCTION MANAGER SHALL WARRANT THAT THE WORK DESCRIBED IN THE PLANS AND SPECIFICATIONS FOR THE VARIOUS BIDDING PACKAGES IS CONSTRUCTIBLE WITHIN THE SCHEDULED CONSTRUCTION TIME. DISCLAIMER OF WARRANTY: THE OWNER DISCLAIMS ANY WARRANTY THAT THE PLANS AND SPECIFICATIONS FOR THE PROJECT ARE ACCURATE, PRACTICAL, CONSISTENT OR CONSTRUCTIBLE OR WITHOUT DEFECT. .10. The Owner may select certain projects for expediting using fast-track construction. When this option is exercised, in writing, by SBBC, it shall be implemented in accordance with the following: A. Design/Construction documents as noted herein shall be submitted by the Consultant for review and approval by SBBC (including Building Code review and Building permit issuance for 100% completion documents), the Construction Manager and others, as applicable, having jurisdiction: Foundation/Structural/LCCA/Site and Off- Site Package-100% Documents A separate 50% completion progress set (for information only) of Building Finish Package drawings shall also be submitted which shall show all of the major characteristics of the project utilities and service, detailed site and floor plans, elevations, section, schedules, etc. Construction may begin after approvals and building permit is obtained for above package. Building Finish Package-100% Documents As mutually agreed by the parties in writing. .11 Guaranteed Maximum Price (GMP): Upon completion of the design phase [construction documents 100% complete] and prior to the bidding and award phase, the Construction Manager shall present to the Owner the GMP for the Owner[']s review and approval in accordance with Article 6 of this Agreement.[3] Those services to be performed by the hired construction manager during the "Bidding and Award Phase" were described in Article 3.4 of the Sample Contract as follows: At this stage the Construction Manager assumes the leadership responsibility for the project team. Upon obtaining all necessary approvals of the Construction Documents including a Building Permit as required by FBC and Owner approval of the latest Statement of Probable Construction Cost, the Construction Manager shall obtain bids and commence awarding construction contracts. The Owner will have the drawings and specifications printed for bidding purposes, either through its open Agreements with printing firms or as a reimbursable service through the Project Consultant, or as set forth in Article 26.03.08 in the General Conditions of this CM Agreement. The Construction Manager shall review the Owner[']s records of pre-qualified contractors, including Minority/Women Business Enterprises (M/WBE) and prepare a list of those recommended for work pursuant to this contract. The Owner reserves the right to reject any or all subcontractors recommended for approval. The Construction Manager shall maintain a list of all potential bidders, including M/WBEs and those who are approved as pre-qualified. The Construction Manager shall prepare and issue the bid packages to cover the scope of the Work for this contract. The Construction Manager, in coordination with the Owner, shall schedule pre-bid conferences as required and issue a written summary of the conference(s). Solicitation of Bids: .1 The Construction Manager shall enter into Contracts with the firm who submits the lowest, responsive and responsible bid. The Construction Manager shall advertise according to SBBC policies as amended from time to time for bids on Documents 00101 at least three (3) times, seven (7) days apart, and with the third (3rd) advertisement prior to a pre-bid conference if applicable and at least seven (7) days prior to the bid opening. Written proposals based on drawings and/or specifications shall be submitted to the Construction Manager. The written proposals shall be opened at the usual location for bid opening. A tabulation of the results shall be furnished by Construction Manager to the Owner. .6 The Construction Manager and Owner shall open at the Construction Manager location and evaluate at least three bids, if possible, for each portion of the Work solicited. The Construction Manager shall also make recommendations to the Owner for award to the lowest, responsive, and responsible bidder. A recommendation for award to other than the lowest bidder shall be justified in writing. Those services to be performed by the hired construction manager during the "Construction Phase" were described in Article 3.5 of the Sample Contract as follows: The Construction Manager shall fully comply with the provision[s] of the Owner's Project Manual, including but not limited to Division 0 and 1, and the attached General Conditions of this contract. In the event of a conflict between this Agreement and such documents the agreement shall control. The Construction Manager shall provide the minimum staffing level as set forth in Exhibit C-F for this project. The Construction Manager shall maintain and prepare monthly updates for all project schedules, including Critical Path elements, provide written progress reports, describe problems and corrective action plan(s) and conduct briefings as required by the Owner. Such information shall be provided to the Owner and Project Consultant in the form of a written report with progress payments requests. The Construction Manager may self perform certain construction work when it benefits the Owner, results in cost and time savings, and is pre-approved by the Owner in writing. The Construction Manager shall coordinate project close-out, operation, and transition to occupancy. The Construction Manager shall coordinate with the Project Consultant to provide complete project records including project manual and electronic Computer Assisted Drafting (CAD) drawings corrected to show all construction changes, additions, and deletions. (Construction Manager shall note all changes on the as-builts for the Project Consultant to reflect on the drawings and CAD disc.) The Construction Manager shall coordinate with the Owner's staff to prepare the Certificate of Final Inspection. The Construction Manager shall obtain and review all warranties, operation and maintenance manuals and other such documents, for completeness, have them corrected if necessary and submit them to the owner. The Construction Manager shall complete all punch list items generated by the Building Code Inspector (BCI), the Owner, the Project Consultant and any others having jurisdiction over the project during its inspections. Those services to be performed by the hired construction manager during the "Warranty Phase" were described in Article 3.6 of the Sample Contract as follows: The Construction Manager shall provide a minimum one (1) year warranty and shall coordinate and supervise the completion of warranty Work during the warranty period. Construction Manager shall participate with the Owner in conducting of warranty inspections held on the sixth (6th) and eleventh (11th) months after occupancy. Construction Manager shall deliver as-built drawings, warranties and guaranties to the Owner. Where any Work is performed by the Construction Manager's own forces or by subcontractors under contract with the Construction Manager, the Construction Manager shall warrant that all materials and equipment included in such work will be new except where indicated otherwise in Contract Documents, and that such Work will be free from improper workmanship and defective materials and in conformance with the Drawings and specifications. With respect to the same Work, the Construction Manager further agrees to correct all work found by the Owner to be defective in material and workmanship and not in conformance with the Drawings and Specifications for a period of one year from the Date of Owner Occupancy of the Project or a designated portion thereof or for such longer periods of time as may be set forth with respect to specific warranties contained in the trade sections of the Specifications or by Florida Law. The Construction Manager shall collect and deliver to the Owner any specific written warranties given by others as required by the Contract Documents. The Construction Manager shall provide a Warranty Summary Report at the end of the 6- month warranty period and 11-month warranty period. This report shall provide at a minimum: Description of each warranty item during the period. Date item reported to Construction Manager. Date item corrected. If more than one trip required, document each. Description of action taken to cure warranty item. Obtain signature of school principal or designee acknowledging warranty items have been completed. Other pertinent information, if applicable. Article V of the RFQ (as revised) provided the following information with respect to "Fees and Pricing": Successful proposers shall negotiate a fee for providing construction management services during the design phase and subsequently shall negotiate a GMP for construction services during the bidding and construction phase. Architectural/Engineering firms will develop Contract documents under separate contract with the Board. As the parties stipulated in Admitted Fact 26, Article VII of the RFQ (as revised) "[was] entitled 'Board's Right to Reject' and state[d] in part as follows": The Board reserves the right to reject any and all proposals and readvertise the project(s) at any time prior to Board approval of the recommended proposer(s) and the negotiated agreement(s). All costs incurred in the preparation of the Proposal and participation in this RFQ process shall be borne by the proposers. Proposals submitted in response to this RFQ shall become property of the Board and considered public documents under applicable Florida law. The District reserves the right to accept or reject any and all submittals, or to waive any technicalities or formalities when and if it is in the best interests of the District. Rejection: A submittal shall be rejected for failure to comply with one or more of the following requirements: The proposer is not licensed or registered in the State of Florida to provide the proposed services. The submittal shall be rejected if not received by The School Board of Broward County, Florida by the specified deadline. Not Applicable. Article XI of the RFQ (as revised) discussed "Submittal Requirements" and contained the following provisions concerning "Related Projects Similar in Scope (to this RFQ)" and "References": Related Projects Similar in Scope (to this RFQ): List educational projects of related scope and size. Provide name and location of project, project owner, project owner name, address phone and contact person, project cost, current project status, firm[']s key personnel assigned to the project. . . . L. References: Provide a list of all projects, clearly stating name of project, using Construction Management at Risk, completed or in progress within the last five (5) years from due date of this RFQ. If Proposer[']s firm also has offices outside the tri-county area (meaning Broward, Miami-Dade, or Palm Beach), then at a minimum provide references for all Construction Management at Risk projects in the tri-county area. List projects that are 75 percent or greater of the construction budget statement in the Public Announcement for each listed project. Provide the address, telephone numbers and contact person(s) listed as references for each project. . . . As the parties stipulated in Admitted Fact 27, "[o]n or about September 3, 2008, [Respondent] received proposed qualifications to provide construction management at risk services for [the FHS Project] from 13 vendors including Petitioner." Among the other "vendors" submitting "proposed qualifications" were Elkins Constructors, Inc., the Morganti Group, Inc., and W. G. Mills, Inc. As the parties stipulated in Admitted Fact 28, "[i]n accordance with the terms and conditions of the RFQ [as revised] and [Respondent's] governing statutes, rules and policies, Respondent's Qualifications Selection and Evaluation Committee ('QSEC') recommended the rejection of certain proposers for their failure to comply with [Respondent's] pre-qualification requirements or limits." There were three such "proposers": Elkins Constructors, Inc.; the Morganti Group, Inc.; and W. G. Mills, Inc. At the time of the "submittal due date to this RFQ [as revised]," neither Elkins Constructors, nor the Morganti Group, was "prequalified according to 1013.46 F.S., SREF 4.1(8), and Board Policy 7003" for any project. W. G. Mills, on the other hand, was "prequalified" for certain projects, but only within the following limits: a "[p]er [p]roject [l]imit [of] $25,000,000 [and an] [a]ggregate [l]imit [of] $250,000,000." The "advertised Proposed Construction Budget" of the FHS Project was $29,150,340, which was more than W. G. Mills' "[p]er [p]roject [l]imit [of] $25,000,000." As of the date "proposed qualifications" were due, there were 11 prequalified firms, including W. G. Mills, who had a "[p]er [p]roject [l]imit" of between $17,000,000 and $26,000,000. These firms were not eligible to be awarded the contract for the FHS Project because the project's "advertised Proposed Construction Budget" was in excess of their "[p]er [p]roject [l]imit." W. G. Mills was the only one of these 11 prequalified firms to respond to the RFQ (as revised). As the parties stipulated in Admitted Fact 29, "[i]n accordance with the terms and conditions of the RFQ [as revised] and [Respondent's] governing statutes, rules and policies, [the] QSEC next evaluated and short-listed the remaining proposers. It thereafter received presentations from the short-listed proposers and, after scoring those short-listed proposers, recommended Petitioner . . . to [Respondent] as the proposer with whom to negotiate a contract for services for fees to provide direct management cost of the construction manager and the project's guaranteed maximum price ('GMP')." As the parties stipulated in Admitted Fact 30, "[o]n October 7, 2008, [Respondent] approved [the] QSEC's selection of Petitioner . . . as the vendor with whom negotiations would be had for [the] Fort Lauderdale High School component of the RFQ [as revised] and 'authorized negotiations for Construction Management at Risk Services.' The scope of Construction Management at Risk services was [as noted above] included within the RFQ [as revised]. The summary explanation and background portion of the agenda item to authorize negotiations stated that the 'Superintendent's designees will negotiate the selected Constriction Management at Risk Services fees for the projects and recommend award of contracts at a future School Board Meeting.'" As the parties stated in the "Statement of the Controversy" section of their Joint Pre-Hearing Stipulation, "[n]egotiations between [Respondent] and [Petitioner] occurred between October 2008 [following Respondent's approval of the QSEC's selection of Petitioner] and December 2009." In December 2009, Cubellis, the architectural firm working on the FHS Project for Respondent, was "experiencing some financial difficulties" and there was uncertainty as to whether it would "be able to continue [on] the project." As a result, negotiations between Respondent and Petitioner were halted. Eventually, Cubellis "assigned [its] contract [with Respondent] to somebody else" (specifically, Manuel Synalovski Associates, LLC), but negotiations between Respondent and Petitioner never resumed. Petitioner's last written contract proposal was dated December 10, 2009. It was based on a proposed construction budget of $18,297,367 and provided for the following "Negotiated Contract Terms": Construction Manager Fees: Pre-Design Not Applicable Design Not Applicable Bidding & Award $37,685 Construction Phase Fee $1,172,370 Warranty $35,000 Overhead $289,200 Profit $185,385 General Conditions $659,846 Total $2,379,489 Above Fees based on scope of work issued "Project Scope" document dated 11/5/2009 per 11/9/2009 letter from M. Decker. CM Performance and Payment Bonds and GL Insurance are included based on budgeted contract amount of $18,297,367. Builders Risk, Contingency, and Subcontractor insurance costs are not included in the fees and will be shown in the schedule of values as separate line items as a cost of work. Should the cost of work increase Bonds and GL insurance fees are to be adjusted at insurance providers' invoiced amount. Overhead, profit and bond allowances for Change Orders: 10% Substantial Completion: 570 Final Completion in General Conditions 25.01.02: 600 Construction Phase Fee and General Conditions in 25.01.02: $3,050 per Consecutive Calendar Day Liquidation Damages for Substantial Completion: $1,000 per Consecutive Calendar Day Liquidation Damages for Final Completion: $600 per Consecutive Calendar Day This contract proposal was made following a December 8, 2009, negotiation session at which Denis Herrmann, Respondent's Director of Design and Construction Contracts, had stated that he had negotiated a construction management at risk contract for another project the previous day where the "Construction Manager Fees" were 13.8 percent of that particular project's proposed construction budget. Mr. Herrmann had relayed this information to Petitioner's representatives at the meeting to give them "a flavor for the range [Respondent was] talking about, not to give them a [specific] number [or percentage] that would be acceptable." The "Construction Manager Fees" proposed by Petitioner in its December 10, 2009, offer were slightly less than 13.8 percent of the $18,297,367 proposed construction budget (but they did not cover any "Pre-Design"-related or "Design"-related work). While Respondent has never, in writing, specifically rejected Petitioner's December 10, 2009, offer, neither has ever formally accepted it. As the parties stipulated in Admitted Facts 45 and 48, respectively, Respondent's "Superintendent of Schools has not placed an item on [the School Board] agenda recommending that [Respondent] enter into a contract with [Petitioner] concerning the RFQ [as revised]," and "[Respondent] has not approved a contract with [Petitioner] concerning [the] RFQ [as revised]." It has been two years since "[Respondent] approved [the] QSEC's selection of Petitioner . . . as the vendor with whom negotiations would be had." Significant changes impacting the FHS Project have occurred over that period of time. Respondent now finds itself in the midst of an "unprecedented budget crisis," making it especially imperative that it "take every [possible] step to maximize the purchasing power of the public's dollars." A precipitous decline in revenue available for capital projects (due, in large measure, to a decline in property values, coupled with a reduction in the capital outlay millage rate) has required Respondent to eliminate or scale back various planned projects. The FHS Project is among the projects that have been scaled back. As the parties stipulated in Admitted Fact 31, "[p]rior to, during and subsequent to its negotiations with [Petitioner], [Respondent] determined on several occasions that the project scope of the [FHS Project] needed to be further adjusted, ultimately resulting [in] the following project scope [with strike-throughs and underlining indicating, respectively, deletions and additions]": Concurrent Replacement in two phases to include: Demolish existing swimming pool (buildings 15 and 16). Demolish existing tennis courts and replace with 6 tennis courts. Demolish Buildings 1, 2, 3, 4, 11, 12, 13, and 14. Construct basketball courts. Construct Regional Athletic Facility. Construct (2) 3-story buildings (1 – Administration & 1 - Classroom) of approximately 68,940 GSF combined to include Administration, 3 general classrooms, 5 resource rooms, 4 science labs and related spaces, 4-classroom ESE suites, 1 Business Technology lab, 1 Family and Consumer Science (ProStart) lab, 1 Health Occupations Lab, 1 Pre-Law Public Service Education Lab, Custodial spaces, Textbook Storage, and Student, Staff and Public Restrooms. Remodel Renovate existing Science Building (building 8). Construct Parent Drop Off and Pick Up area and Staff/Visitor Parking. Resurface Student Parking. Construct New Student parking area on the West side of the site to increase parking capacity by 92 spaces. Modify existing temporary bus loop to meet SREF code and ADA standards; modifications will include barricades and covered sidewalk. Redesign courtyard to meet current ADA standards.' As the parties further stipulated in Admitted Fact 31, "[t]he project scope was revised five (5) times between October 7, 2008 and December 2, 2009[,] [and Petitioner] was notified of the changes in scope and acknowledged the same." "[R]evis[ions]" have also been made to the project's budget. Respondent's "5-Year Plan" allocates funding for all costs (including, but not limited to, construction costs4) associated with each of Respondent's funded capital projects. As the parties stipulated in Admitted Fact 32, "[Respondent] adopts and revises its 5-Year Capital Improvement Plan ('5-Year Plan') each year." As the parties further stipulated in Admitted Fact 33: [Respondent's] 5-Year Plan adopted for Fort Lauderdale High School for Fiscal Years 2009-10 to 2013-14 eliminated the $39,491,259 previously budgeted as "Capacity Additions" . . . . Instead, the 2009-10 to 2013-14 Five Year Plan provided $21,050,000 for Capacity Additions . . . . Respondent's current "5-Year Plan" (for the Fiscal Years 2010- 2011 to 2014-2015), which was adopted on September 7, 2010, allocates $22,366,085 to the FHS Project (as scaled back). The dour economic conditions responsible (in part) for the drop in tax revenues available to fund Respondent's capital projects have also led to increased competition in the construction industry and a resultant decline in construction prices. This increased competition is particularly pronounced "in the procurement area of hard bidding." During "the peak of the construction boom," before the downturn in the economy, it was not atypical for Respondent, when it "hard bid" a construction project, to get just one or even no bids in response to the solicitation. Now, Respondent "expect[s] to see between half a dozen [and] a dozen or more bidders." Moreover, recently, winning bids on "hard bid" projects have been, on average, well below these projects' advertised proposed construction budgets. Respondent has not experienced the same overall cost-savings results when it has used the "Construction Management at Risk delivery method." Given the market conditions that exist today, Respondent estimates that the construction costs for the FHS Project (as scaled back) would be no more than $16,950,000 and possibly as little as approximately $13,000,000 (if a "hard bid" were used). These amounts are considerably less than the "Proposed Construction Budget of $29,150,340" that had originally been "advertised." There are prequalified firms (including W. G. Mills) which were not eligible to be awarded the contract under the RFQ (as revised) because their "[p]er [p]roject [l]imit" was less than $29,150,340, but which would now be able to bid on a scaled-back FHS Project were it to be readvertised (with a proposed construction budget of $16,950,000). Another (and perhaps the most significant) difference between the circumstances existing at present and those that existed two years ago (vis-à-vis the FHS Project) is that the design of the project (as scaled back) has advanced to the point that, with a few revisions,5 the construction documents for the project will be 100 percent complete.6 As a result, Respondent no longer has a need for most, if not virtually all, of the "pre-design" and "design" services, described in Articles 3.2 and 3.3 of the Sample Contract, that, back in 2008, it had wanted a construction manager to perform. In April 2010, Respondent's Office of the Chief Auditor issued a report (April 2010 Audit Report) critical of Respondent's use of the "Construction Management at Risk delivery method" in connection with 14 projects "which were included in the Construction Management at Risk Kitchen/Cafeteria RFQ No. 2006-12-FC." The report read, in pertinent part, as follows: The projects included in RFQ No 2006-12-FC were sufficiently completed by the Architect/Engineer firm(s) prior to being advertised as CM at Risk construction projects. The inability [of] any CM firm to provide "professional services" and scheduling of both design and construction phases represents a deviation from the intent of Florida Statutes, SREF and the School Board's CM at Risk contract.[7] In nearly every executed CM at Risk agreement in the Kitchen/Cafeteria program, the Pre- Design and Design phase responsibilities of the CM were stricken from the contract. That is a further representation that the input required by a prospective CM to qualify for the committee selection process was not, nor was it intended to be provided. F.S. 1013.45(1)(c) also states that the use of the CM at Risk delivery method " . . . shall not unfairly penalize an entity that has relevant experience in the delivery of construction programs of similar size and complexity by methods of delivery other than program management." All of the projects in the Kitchen/Cafeteria program were originally intended to be "hard-bid" but were changed to the CM at Risk delivery method. One project was removed from the group prior to the due date of submittals for RFQ No. 2006-12-FC. That hard bid project, Margate ES, cost approximately $5.6 million, including nearly $466,226 in change orders, which was approximately $3.3 million less, on average, than the fourteen (14) projects that remained in RFQ No. 2006-12- FC. Due to the change in delivery method, general contracting firms could have been "unfairly penalized" by the decision to use the CM at Risk delivery method, as many local general contractors have the relevant experience in the delivery of construction programs of similar size and complexity by methods other than the CM at Risk delivery method.
Recommendation We recommend that Facilities & Construction Management discontinue developing construction procurement packages (i.e. RFQ and RFP) for award of CM at Risk agreements when construction management services requested are associated with reused, prototypical or otherwise sufficiently developed construction documents. Kitchen/Cafeteria program data indicates that the benefits associated with the CM at Risk delivery method were not realized using prototypical designs, as the program resulted in over $24 million in avoidable fees while circumventing applicable laws and regulations. On May 10, 2010, Mr. Herrmann sent a letter to Respondent's General Counsel requesting, in light of the April 2010 Audit Report, a "legal opinion related to the award of a Construction Manager at Risk Agreement (CM) to [Petitioner] and whether such an award would comply with Chapter 1013.45(1)(c), S. and State Requirements for Educational Facilities 1999 (SREF)," given that the FHS Project (as scaled back) was then "in the design phase and Phase III 100% Construction Documents [were] being prepared." The concluding paragraph of the letter read as follows: In this project, The Weitz Company has been selected by the board and we intend to recommend award of a contract within several months. An award of a CM agreement in this case would not violate the specific audit recommendation and we believe such an award does not violate statute or SREF. Please advise whether you concur. Mr. Herrmann has since changed his opinion. He now believes (reasonably so, in the undersigned's view) that "award of a CM agreement" in the instant case would be inconsistent with the "audit recommendation" inasmuch as the FHS Project (as scaled back) now has "sufficiently developed construction documents." On May 18, 2010, Mr. Herrmann sent another letter to Respondent's General Counsel. This letter read as follows: This is to provide you with additional information relating to a request for a legal opinion regarding the award of a Construction Manager at Risk Agreement (CM) to The Weitz Company. Please also refer to the attached memos dated 10/14/09, 11/16/09 and 5/10/10. In summary, we have requested opinions based on the following: Whether such an award would comply with applicable statutes, SREF, and board policy given the extent of the changes to the scope and budget. Whether such an award would comply with Chapter 1013.45(1)(c), F.S. and State Requirements for Educational Facilities 1999 (SREF). We have recently revised the construction cost estimate as a result of current market conditions, and the project consultant, Manuel Synalovski [Associates], LLC agrees with the revised estimate. The change in the cost estimate is as follows: In the RFQ: $29,150,340 October 2009 (Change in scope): $21,770,000 November 2009 (Market conditions): $18,297,367 May 2010 (Market conditions) $16,950,000 Please advise whether we should proceed with the award or reject all bids. Respondent's General Counsel responded to neither of these May 2010, letters from Mr. Herrmann. As the parties stipulated in Admitted Fact 34, "[o]n June 15, 2010, [Respondent] approved Item J-15 during its June 15, 2010, Regular Meeting." The "Requested Action" and "Summary Explanation and Background" section of the Agenda Request Form for this agenda item (J-15) provided as follows: REQUESTED ACTION Approve the change in the delivery method from Construction Management at Risk to Design/Bid/Build and the First Amendment to the Professional Services Agreement with Manuel Synalovski Associates, LLC (MSA) for Fort Lauderdale High School, Phased Replacement Project No. 095-27-01, dated February 12, 2008. SUMMARY EXPLANATION AND BACKGROUND Scope of Work: Basic Services Amended 6/15/10: This item changes the delivery method from Construction Management at Risk to Design/Bid/Build. Demolish existing Swimming pool (Buildings 15 and 16); demolish existing tennis courts; demolish Buildings 1, 2, and 3; construct two 3-story buildings (1 administration and 1 classroom) of approximately 68,940 gross square feet combined to include administration, 3 general classrooms, 5 resource rooms, 4 science labs and related spaces, 4 ESE classroom suite, 1 business technology lab, 1 family and consumer science (ProStart) lab, 1 health occupations lab, 1 pre-law public service education lab, custodial spaces, textbook storage, and student, staff, and public restrooms. Remodel existing science building (Building 8). Construct new parent drop off and pick up areas and staff/visitor parking. Construct new student parking area on the west side of site to increase parking capacity by 92 spaces. Modify existing temporary bus loop to meet SREF, Florida Building Code and ADA Standards. ADA modifications will include barricades and covered sidewalk. Remodel existing courtyard for ADA access to gym and auditorium. MSA and the Superintendent's Negotiations Committee negotiated a total reduction in [architectural] fees from the February 12, 2008 Board approved amount of $2,021,000 to $1,683,650. This decrease in the Basic Services Fees totals $337,350 and is decreased as follows: Phase IV (Bidding and Award) by $54,357, Phase V (Construction Administration) by $269,250, and Phase VI (Warranty) by $13,743. This fee reduction is as a result of a reduction of the original scope as per Attachment 2 to the First Amendment. This First Amendment also reduces the Fixed Limit of Construction Cost (FLCC) from $29,150,340 to $16,950,000 as a result of the reduction in scope and construction costs resulting from current market conditions. The Risk Management Department and the Office of the Chief Auditor have reviewed this First Amendment. The School Board Attorney has approved this First Amendment as to form and legal content. As the parties stipulated in Admitted Fact 35, on June 30, 2010, "[Respondent] posted its Revised Recommendation[] and Tabulation for [the FHS Project, which] set forth the following recommendation": Per Article VII.A of the RFQ, based upon the recommendation of the Qualification Selection Evaluation Committee, the Facilities and Construction Management Division intends to recommend that The School Board of Broward County, Florida, at the School Board meeting on July 20, 2010, reject all responses received for Fort Lauderdale High School Project No. P.000687. The original, intended scope of work as set forth in the original RFQ is substantially and materially different than the revised scope of work and budget in the proposed contracts and such work should be re- advertised and re-bid. This decision to "reject all responses" and "re- advertise[] and re-bid" was based on an honest and good faith exercise of discretion, intended, ultimately, to allow Respondent to receive (in the words of Mr. Herrmann) "more bang for [its] buck." As the parties stipulated in Admitted Facts 39 through 41, Petitioner timely protested Respondent's intended "reject[ion] [of] all responses." As the parties stipulated in Admitted Facts 42 through 44, after the parties had unsuccessfully attempted "to resolve the protest by mutual agreement," Respondent, at Petitioner's request, referred the matter to DOAH on August 23, 2010.
The Issue Whether Respondent, a certified general contractor in the State of Florida, violated various provisions of the contracting laws related to five different construction projects and, if so, what disciplinary action should be taken against him, if any?
Findings Of Fact At all times material hereto, Respondent has been licensed as a Certified General Contractor, holding license numbers CG C008004 and CG CA08004. At all times material hereto, Respondent was the qualifying agent for Asher Melzer Construction Corporation (hereinafter "AMCC"). DOAH CASE NO. 86-4732 At all times material hereto, Mr. and Mrs. Victor M. Franzese resided at 8880 Southwest 182nd Terrace, Miami, Florida 33157. On March 29, 1985, the Franzeses contracted with AMCC to construct a home in the Cutler Glen development for $279,000. The Franzeses made payments to AMCC totalling $32,901. Construction of the Franzese residence began almost immediately after the contract was signed. However, after the foundation was poured and the walls were put up, AMCC abandoned the project. During the time that the initial work was performed, Victor Franzese stopped by the construction site almost every day. Although he met the foreman on the job, he never met with, spoke to, or heard of the Respondent. Throughout the fall of 1985, Franzese wrote to Asher Melzer, the owner of AMCC, regarding the lack of work at the construction site. He received no responses to his letters. In January of 1986, Melzer indicated to Franzese that the roof trusses which had been lying on the ground at the Franzese project for many months would be installed. Franzese hired an engineer to inspect the trusses due to their obviously-deteriorated condition. The engineer reported that the trusses would need substantial bracing in order to be used. Additionally, a Dade County structural engineer told Franzese and Melzer after inspecting the trusses that no matter what bracing was added, the trusses would never pass inspection. AMCC did not begin construction again, and a foreclosure action was brought by Amerifirst Savings & Loan Association against Melzer, AMCC, the Franzeses, and others. The Franzeses lost all rights to the property which their house was being built on and lost all of the money which they had paid AMCC. During the entire time that the Franzeses were dealing with AMCC, they never heard of, spoke to, or saw the Respondent. The Franzeses lost approximately $38,000 in their dealings with AMCC. At all times material hereto, Mr. and Mrs. James R. Cross were the owners of property located at 9990 Southwest 127th Terrace, Miami, Florida. On March 25, 1985, the Crosses contracted with AMCC to construct a home on their property. The total contract price including extras subsequently agreed upon was approximately $152,400. The Crosses paid AMCC approximately $29,000 in deposit and draw monies. Although AMCC began construction of the Cross residence, the project was only completed through the tie beam phase. During the time that construction was being performed, James Cross visited the construction site on a daily basis. Although he met the foreman at the job site, he never spoke to, heard of, or met the Respondent. Construction at the Cross project ceased on approximately September 11, 1985, and was never resumed by AMCC. By that time, Cross had begun receiving Notices to Owner that liens would be placed on his property for failure to be paid by AMCC, and one lien had already been placed. The liens placed on his property were from the architect Ronald J. Dorris, Rinker Construction Company, ASP Construction Equipment Company, and Distrito Trucking Corporation. After receiving the first Notice to Owner, Cross contacted AMCC. He was told not to worry, that things would be taken care of by AMCC. All of the subcontractors and materialmen who filed liens on the Cross property were to have been paid by AMCC pursuant to the contract between the Crosses and AMCC. AMCC never provided the Crosses with any money nor posted any bonds to clear the liens. In fact, Melzer gave the Crosses a check to pay one of the liens, but the check bounced. Melzer never attempted to repay the money to them, and they were forced to pay off these liens personally for a total amount of $4,666. While James Cross was attempting to have AMCC pay the liens which were placed on his property, he never spoke to or heard from the Respondent. On December 7, 1985, after no work had been performed on the project for over 90 days, Cross served notice on AMCC that he considered the project abandoned. Cross hired another general contractor to complete the project and paid approximately $14,000 more than the original contract price to finish the project. During Cross' visits to the project, it did not appear that anyone was in control. Concrete blocks were being cemented into places where sliding glass doors were supposed to be placed, and windows were being built at improper sizes. Dade County, Florida, follows the South Florida Building Code as well as Chapter 10 of the Dade County Code, which regulates the conduct of contractors doing construction work within the limits of Dade County and all municipalities. In reference to the Cross project, Respondent obtained a permit for the construction. However, that permit did not include any plans for mechanical work, and no mechanical permit for the air conditioning system was ever obtained. Additionally, although an electrical permit was obtained, no inspections were ever called for by Respondent or anyone else. It is a violation of the South Florida Building Code and a violation of Dade County Code Chapter 10 to perform work without a permit, and it is the obligation of the qualifying agent pursuant to Chapter 10 to supervise, direct, and to control all work that is done under any permits that he has obtained The failure to obtain a mechanical permit for the Cross project indicates that Respondent was improperly supervising the job site activities. The numerous liens placed on the Cross property by subcontractors and materialmen indicate that there was a lack of supervision by Respondent. Under the Dade County Code, such actions would be considered diversion of funds. At all times material hereto, Mr. and Mrs. Mark E. Demsky resided at 7601 Southwest 162nd Street, Miami, Florida 33157. On May 16, 1985, the Demskys entered into a contract with AMCC to construct a home in the Cutler Glen development for $221,000. The Demskys paid AMCC a total of $28,000 towards the construction of that home. Work at the construction site began in late July or early August of 1985. Mark Demsky was concerned that the project did not begin immediately after the deposit money was paid and spoke to Melzer several times. When the work finally began, it proceeded very slowly. Although Demsky continued to ask questions regarding the pace of the work, he received only excuses from Melzer. Construction ceased after the foundation was poured. Construction ceased completely by December of 1985. By that time, numerous liens had been placed on the Demsky property. Because no money was placed in an escrow account at the beginning of construction, Demsky had required that Melzer sign a letter agreement on July 9, 1985, allowing Demsky to rescind the contract with 45-days notice prior to the closing. By March 18, 1986, after no work had been performed for over a three-month period, Demsky exercised that right of rescission and attempted to obtain the $28,000 deposit money he paid Melzer. Melzer gave Demsky a promissory note in the amount of $28,000 and executed a Release of Contract for Sale and Purchase. Although the promissory note from AMCC and Melzer became due on September 18, 1986, the Demskys have never received any payments on that promissory note. They filed suit to recover the $28,000 and received a final judgment against Melzer and AMCC for repayment of the promissory note, which final judgment remains unsatisfied. During the time that construction was being performed at the Demsky project, Mark Demsky visited the construction site almost every day. Although he met one of the supervisors on the job, and some of the workers, Demsky never met with, heard of, or spoke to the Respondent. Additionally, during all of the time that problems arose at the construction site and during the time that the job was abandoned, Demsky never heard from or spoke to the Respondent. The Demskys lost a total of approximately $29,250 in their dealings with AMCC. DOAH CASE NO. 88-5764 At all times material hereto, Mr. and Mrs. Calvin W. Tinsley resided at 14123 Southwest 66th Street, Miami, Florida. They now reside at 585 Shadowwood Lane, Titusville, Florida. On October 2, 1984, the Tinsleys contracted with AMCC to construct a home in the Cutler Glen development for $242,908. The Tinsleys paid AMCC approximately $32,000 in deposit money. Although the contract was signed in October of 1984, construction did not begin until February of 1985. The Tinsleys immediately noticed that things were not proceeding on schedule and the work was taking longer than promised. After a while, the subcontractors were placing liens on the Tinsley property. During all of the conversations with Melzer regarding the construction project, Calvin Tinsley never spoke to, heard of, or met with the Respondent. In fact, Calvin Tinsley believed that Asher Melzer was the general contractor for AMCC. Amerifirst Savings & Loan Association filed a foreclosure action against AMCC and Melzer, as well as the Tinsleys. A final summary judgment was entered against the Tinsleys, and their property was sold at an auction. The Tinsleys never recovered any of the $32,000 deposit money they paid AMCC. DOAH CASE NO. 89-0133 At all times material hereto, Mr. and Mrs. Warren W. Lovell, Jr., resided in Miami, Florida. They now reside at 16630 Southwest 87th Place, Miami, Florida 33157. On February 8, 1985, the Lovells contracted with AMCC to construct a home in Cutler Glen development for $195,000. The Lovells paid AMCC a total of $168,000 for the work which was performed at 16630 Southwest 87th Place in Miami. In August of 1985, construction stopped on the Lovell project for at least three months. Numerous liens had been placed on Lovell's property as well as the other properties within Cutler Glen. Lovell attempted to help Melzer complete the Cutler Glen project and arranged a meeting among Melzer and many of the homeowners and subcontractors. During this period of time, as well as when the construction was being performed, Lovell never met with, spoke to, or heard of the Respondent. In order to help AMCC begin construction again, Lovell released the claims of lien which he had placed on four homes owned by AMCC in the Cutler Glen development. Unfortunately, Lovell's efforts proved fruitless, and AMCC was never able to complete the development. Lovell ultimately had to pay to have the claims of liens which had been placed on his property released. Lovell then had to pay the subcontractors approximately $30,074 to complete his house. In 1986, Lovell discovered that the mortgage he had entered into with Melzer on the Lovell property was not a first mortgage as Melzer had represented. Lovell discovered that there were two previous mortgages filed on his property that were superior to his mortgage. Lovell was forced to pay an additional $70,000 to satisfy those mortgages to obtain title to his property. At the time those mortgages were discovered, Lovell had already paid $168,000 to AMCC for the construction of his house and the purchase of the property. In exchange for Lovell paying off the prior mortgages, Melzer gave Lovell three promissory notes totalling $70,000. These notes are past due and have not been paid, even in part. Lovell's out-of-pocket costs to complete his house were approximately $87,500.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, therefore, RECOMMENDED that a Final Order be entered as follows: Finding Respondent guilty of the statutory violations as set forth above; Permanently revoking Respondent's license numbers CG C008004 and CG CA08004; Requiring Respondent to pay a civil fine to Petitioner in the amount of $5,000 within 30 days from the entry of the Final Order; Requiring Respondent to make partial restitution to each of the homeowners involved in this proceeding in the amount of $11,000 each to the Franzeses, to the Crosses, to the Demskys, to the Tinsleys, and to the Lovells for a total of $55,000 within 30 days from the entry of the Final Order; and Requiring that Respondent pay such civil fine and such partial restitution prior to any application for relicensure by Respondent being approved. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 22nd day of November, 1989. LINDA M. RIGOT Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of November, 1989. COPIES FURNISHED: Jan L. Darlow, Esquire Rapheal M. Prevot, Jr., Esquire Department of Professional Regulation Adorno, Zeder, Allen, Yoss, Bloomberg & Goodkind, P. A. Bayview Executive Plaza 3225 Aviation Avenue, Suite 400 Miami, Florida 33133 Nicholas A. Mascioli 18750 Southwest 207th Avenue Miami, Florida 33187 Kenneth E. Easley, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Fred Seely, Executive Director Department of Professional Regulation Construction Industry Licensing Board Post Office Box 2 Jacksonville, Florida 32202 APPENDIX TO RECOMMENDED ORDER, CASE NOS. 86-4732, 88-5764 and 89-0133 Petitioner's proposed findings of fact numbered 1, 3-10, 13-19, 22-27, 30-33, and 36-40 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed finding of fact numbered 2 has been rejected as being unnecessary for determination of the issues in this cause. Petitioner's proposed findings of fact numbered 11, 12, 20, 21, 28, 29, 34, 35, and 41-47 have been rejected as not constituting findings of fact but rather as constituting recitations of the testimony, conclusions of law, or argument of counsel.
Findings Of Fact Respondent Paul McAllister is a certified general contractor and was the qualifying individual for the firm of Garnett-McAllister Associates, Inc., Fort Lauderdale, Florida, in 1977 and until July, 1978. (Stipulation) On April 8, 1977, Respondent's firm entered into a contract with Ray Borchardt, Westchester, Illinois, for the construction of a four-unit apartment building at Lighthouse Point, Florida. The contract provided for a total price of $139,110.00, payable in five payments or "draws" in various percentages of the contract price at specified stages of construction. However, the contract did not specify a time for performance or completion of the building. It contained a clause stating "Any alteration or deviation from above specifications involving extra costs - will be executed only upon written orders, and will become an extra charge over and above the estimate." Respondent obtained a building permit for the construction of the building from the building official, City of Lighthouse Point, Florida, on May 8, 1977. (Petitioner's Exhibits 1, 2) Prior to the commencement of construction, it was determined that foundation pilings for the building were required and therefore Borchardt sent Respondent the sum of $13,519.65 on June 9, 1977, as an additional sum over and above the contract price. At this time, he also sent the first draw in the amount of $20,866.00 even though such payment was not called for until completion of the foundation and "rough in" of plumbing and electric connections. On August 1, 1977, Borchardt paid the second draw of $20,866.00 although the roof was not on, nor had the beam been poured at the time as called for under the contract. Respondent was delayed approximately three weeks by failure of a supplier to provide the second floor concrete planking. On October 24, 1977, Borchardt paid the third draw in the amount of $34,777.00 although construction was not at the stage called for under the contract. On November 22, 1977, Borchardt paid $18,000.00 of the fourth draw and on January 23, 1978, paid the remaining portion of $16,777.00. At that time, the roof was not completed, tile work had not been started, woodwork was incomplete, and kitchen cabinets and vanities had not been installed pursuant to the terms of the contract. Borchardt had made a number of trips from Illinois to Florida during the construction period and was aware that his various partial payments were made in advance of completion of the several construction phases. He had dealt primarily with Edward J. Garnett, president of Garnett-McAllister Associates, Inc., as to the financial aspects of the project. Respondent primarily was a "field" man in charge of supervising construction. Also, Borchardt's son-in- law, Vincent A. Svegel, had moved to Florida in September, 1977, and acted as Borchardt's contact with Respondent's firm after that time. Both Respondent and Garnett informed Svegel in the fall of 1977 that the building would be completed by December 15. (Testimony of Borchardt, Svegel, Petitioner's Exhibit 1) Although during the early part of 1978, five subcontractor liens were filed against the property for work and materials supplied on the project, three of these liens were eventually paid by Garnett-McAllister and the remaining two totaling over $7,000.00 were eventually paid by Borchardt. One of the latter liens was filed by Pompano Roofing Company, Inc. That firm refused to install the roofing tile until paid and the tile therefore "sat on the roof" for approximately five months. On March 13, 1978, Borchardt filed a complaint with Petitioner based on the fact that the work had not been performed according to the draw schedule and liens had been placed on the property. Borchardt also complained to James P. Simmons, the building official of Lighthouse Point about the project delays and claims of lien. As a result, on March 14, 1978, Simmons referred the complaint to Petitioner because Respondent was certified by the state. Petitioner's local inspector, Wallace Norman, issued a Notice of Violation of Section 468.112(2)(e), F.S., to Respondent on March 15, 1978, for diversion of funds based on the filing of liens by suppliers. In a meeting with Respondent and Garnett, Norman asked for an explanation of the situation. They told him that they had been building a house in Davies, Florida, and had used some of the money that Borchardt had paid them to pay suppliers on that house and they had expected to be able to put the money back into the Borchardt project when they sold and realized a profit on the other house. (Testimony of Borchardt, Svegel, Simmons, Norman, Petitioner's Exhibits 7, 9, 10; Respondent's Exhibit 3) During the period between January and March, 1978, some progress was made toward completing the building, including the rough in of the plumbing and electrical systems, installation of inside lath work, installation of tub and shower stalls, and extension of a kitchen area. As late as April 19, 1978, Respondent accompanied Borchardt to a supplier to purchase windows for the building. (Testimony of Svegel, Respondent, Pet. Ex. 3) On May 29, 1978, Svegel, in behalf of Borchardt, notified building official Simmons that Garnett-McAllister Associates, Inc. had been terminated from any further work on the building due to the fact that the building permit had expired and would not be reissued, and requested authorization to finish the building. Simmons thereafter issued a building permit to complete the building to Borchardt on June 21, 1978. He also instructed his staff not to issue any more permits to Respondent due to his "poor track record" and liens which had been filed against the building under construction. Simmons issued the completion permit under the authority of Section 304.3 of the South Florida Building Code, Broward County Edition, which provided that a building permit expires and becomes null and void if work is abandoned at any time for a period of ninety days. Although Simmons considered that the time limit had elapsed because an inspection had not been called for by the builder for ninety days, he erroneously believed that the last inspection had been on January 4, 1978, when, in fact, the city's inspection records show that the plumbing department had made an inspection of rough plumbing on March 27, 1978. Simmons did not notify Respondent of the issuance of the second permit. He considered that he had inherent authority in his position to prohibit issuance of additional permits to Respondent, but didn't consider his action in this regard to be disciplinary in nature because the City of Lighthouse point does not issue contractor's licenses. Therefore, the matter was referred to Petitioner for any action against Respondent's state certification. (Testimony of Simmons, Svegel, Petitioner's Exhibit 3, 4, 11, Respondent's Exhibit 1) At some time prior to obtaining the permit to complete the building, Borchardt had refused to pay the final draw of $27,824.00 to Garnett-McAllister Associates, Inc. because the firm was so far behind on the job. Garnett had told Borchardt that be was selling another home for $80,000.00 and was going to put some of the money he realized from that sale into the Borchardt project. He wanted Borchardt to loan him $20,000.00 and take back a lien on a boat in order to have money in the interim to work on the building. When Borchardt declined to do so, Garnett told him that he could not complete the job. Borchardt also received a call from Respondent to the effect that he would finish the job on his own for $150.00 a week if Borchardt would pay the remaining costs. Borchardt informed him that he would pay nothing further until the job was completed. Garnett had also told Svegel that he had used some $25,000 to $30,000 of the Borchardt funds to construct the house in Davies and that he would put that money back into the firm's business account to use for the Borchardt building when the house was sold. (Testimony of Borchardt, Svegel, Respondent) At the time Borchardt took over completion of construction, the building was approximately 70-75 percent completed. Borchardt paid an additional sum of about $82,000.00 to complete the building which was some $54,000.00 more than the original contract price. However, about $12,000.00 of this sum constituted changes to the original specifications that had been agreed to by Borchardt during the course of construction. Some of these involved changes due to building code requirements, such as the addition of a ramp for the handicapped. Other changes were made on the recommendation of subcontractors or resulted from requests by Borchardt's daughter and son-in-law who were intending to occupy one of the apartments in the building. None of these changes was reflected in a written change order or supplemental agreement to the contract because Borchardt had agreed to the changes and neither party to the contract apparently considered it necessary to formalize these matters. Additional changes in the sum of some $12,000 were made to the building after Borchardt took over construction. These primarily dealt with carpeting, appliances and the like. (Testimony of Borchardt, Svegel, Simmons, Respondent, Stipulation, Petitioner's Exhibits 5, 8) Respondent testified at the hearing and disclaimed knowledge of the financial affairs of the corporation which he claimed were handled exclusively by Garnett. He denied ever abandoning the project and stated that he was unaware, until June 7, 1978, that Borchardt was taking over the construction project to complete. He acknowledged that funds became a problem about mid- January, 1978, and that he then recognized that the contract price had been set at too low a figure because cost overruns were being experienced. He denied diversion of Borchardt's funds to the Davies house, and claimed that his firm did not purchase supplies for that project. He conceded, however, that the firm had one corporate business account from which suppliers on all jobs were paid. Respondent further testified that when funds for the Borchardt building became scarce, profits from other jobs were used in meeting construction costs on the building. He acknowledged receiving a salary of $8,420.00 during the course of construction and said that Garnett had also drawn a sum of approximately $11,000.00 for himself. (Testimony of Respondent) A review of the books of Garnett-McAllister Associates, Inc. by a certified public accountant indicated that they were not well kept and were frequently in error. The auditor's report reflected that the firm had expended at least $80,675.00 in direct construction costs on the project. Certain cost items could not be verified due to the failure of suppliers to respond to the auditor's inquiry. These accounts were reflected on the books of the firm at a total of approximately $1,000.00. (Testimony of Webb, Respondent's Exhibit 4)
Recommendation That Respondent's certification as a general contractor be suspended for a period of 90 days, but that he be permitted to complete any contracts which are uncompleted at the time suspension is effected. DONE and ENTERED this 25th day of April, 1979, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Barry Sinoff, Esquire 2400 Independent Square Jacksonville, Florida 32302 Alan C. Brandt, Jr., Esquire 1040 Bayview Drive Fort Lauderdale, Florida 33304 J. K. Linnan Executive Director Florida Construction Industry Licensing Board Post Office Box 8621 Jacksonville, Florida 32211
Findings Of Fact The Department of General Services, (hereinafter "DGS") is a state agency, the responsibilities of which include the management of state construction project. It accomplishes such management through its Division of Building Construction. The Divisions responsibilities include, negotiation of architect/engineer contracts, review of plans and specifications, contract administration, and contract management. One such project is Project No. MA-87080010, the subject matter of which involves repairs and alterations to the National Guard Armory in Fort Lauderdale, Florida, hereinafter referred to as the Armory Project. Certain portions of the bid specification for the Armory Project were prepared by the project architect, Mr. William D. Tschumy, Jr. Other portions, specifically the portions dealing with bidding conditions and contractual conditions, were provisions provided by DGS for inclusion in the specifications. The project architect was not familiar with all of the bid specification provisions provided by DGS. Prior to submitting its bid on the Armory Project, James P. Moran, Inc., had been prequalified for bidding on the project. Such prequalification did not obviate the need for James P. Moran, Inc., to meet the experience requirements in the bid specifications and in Rule 13D-11.904(2)(a)(8), Florida Administrative Code. The bid specifications for the Armory Project include the following provisions: 1/ Section B-2, page 9: 8. Firm experience - must have successfully completed no less than two project of similar size and complexity within the last three years. and; Section B-22, page 16: The owner reserves the right to reject any and all bids when such rejection is in the best interest of the State of Florida and to reject the proposal of a bidder who the owner determines is not in a position to perform the contract and to negotiate the contract in accordance with its Rule 13- D11.08 if the low qualified bid exceeds the project construction budget. James P. Moran, Inc., timely submitted its bid on the Armory Project and was subsequently notified that it had been recommended for contract award by the Director of the Division of Building Construction. This recommendation was made on the basis of a recommendation by the project architect that the bid be awarded to James P. Moran, Inc. At the time of making his recommendation, the project architect was not aware of the firm experience provision in either the bid specifications or the applicable rules. A timely protest was filed by another bidder on the Armory Project, in which the protesting bidder raised the issue of the firm experience of James P. Moran Inc. DGS concluded that the protest was valid and after further deliberation made the determination to reject all bids. All the bids other than the bid submitted by James P. Moran, Inc., exceeded the funds available for construction of the Armory Project. Because the other bids all exceeded the available funds, DGS decided that the best course of action would be to modify the scope and nature of the work involved in the project and then re-bid the project. It is reasonable to expect that the proposed modifications to the project will result in lower bids, because the modifications would permit the work to be done quicker and at less cost to the contractor. James P. Moran, Inc., was incorporated in 1981. However, prior to the summer of 1988, it had submitted no bids acquired no permits, and had neither started nor completed any jobs. The qualifying contractor for James P. Moran, Inc., is Mr. James P. Moran who, for many years prior to the summer of 1988, was an employee, officer, and shareholder of Frank J. Moran, Inc. Mr. James P. Moran holds a State of Florida building contractors license, a State of Florida electrical contractors license, a Dade County electrical masters license, a Broward County electrical masters license, and a State of Maine electrical contractors license. While employed by Frank J. Moran, Inc., Mr. James P. Moran was also the qualifying contractor for that corporation. While so employed, Mr. James P. Moran's primary duties were those of project director and estimator. He was also a corporate officer of Frank J. Moran, Inc. During his employment with Frank J. Moran, Inc., Mr. James P. Moran was the project manager on projects of similar size and complexity to the Armory Project. The construction budget for the Armory Project is approximately 250,000. The dollar values of construction jobs are valid indicators of the comparative sizes of construction jobs. The dollar values of the two largest construction jobs completed by James P. Moran, Inc., are approximately $161,000 and $112,000, respectively. The two largest construction jobs completed by James P. Moran, Inc., are not of similar size to the Armory Project. While DGS is concerned about the qualifications of the personnel employed by a contracting firm, DGS is also concerned about the track record of the firm itself, and, therefore, requires that a firm have completed projects in its own name in order to qualify for a bid award. In other words, a new firm cannot "take credit" for work performed by one of its employees at a time when the employee was working for another firm. Also, DGS does not allow "stacking" of the dollar value of several small jobs in order to demonstrate completion of a job of similar size to the job that is the subject of a bid. The purpose of the experience rule is to require a contracting firm to have completed at least two jobs of similar dollar size to the dollar size of the job being contracted. Among, the reasons stacking is not allowed is that completion of a job of any given size is a more complicated and complex undertaking than completion of a series of smaller jobs that total up to the same dollar value as the job of given size. DGS has now modified the scope of the project and has amended the plans and specifications in such a fashion that it will take less time to complete the modified Armory project and may reasonably be expected to result in lower bids closer to or below the construction budget. The modified Armory project may reasonably be expected to result in a savings of both time and money.
Recommendation For all of the foregoing reasons it is RECOMMENDED that the Department of General Services issue a final order in this case rejecting the bid of James P. Moran, Inc., as being non-responsive, and rejecting all other bids, in order to modify the scope of the project and rebid it. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of March 1990. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 2nd day of March, 1990.
