The Issue Whether Respondent's determination that the bid submitted by Petitioner was non-responsive, was arbitrary, capricious, or beyond Respondent's scope of discretion as a state agency.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the formal hearing, the following relevant facts are made: A. Background The Department issued a Request For Proposal and Bid Submittal Form (BID) for a full service lease, Lease Number 700:0556, seeking to rent office space in an existing facility located in Polk County, Florida. Responses to the BID were to be filed with the Department by 10:00 a.m. on June 12, 1990. Six proposals were timely submitted in response to the BID, including McCarty's and Fearn's proposal. The Department evaluated the six proposals and made site visits to the properties proposed to be leased. The McCarty proposal received the highest evaluation score of 95.4 points, while the Fearn proposal received the second highest evaluation score of 92.6 points. Because the McCarty proposal had been found responsive to the BID and received the highest evaluation score, the Department awarded the lease contract for Lease No. 700:0556 to McCarty. Fearn filed a timely protest challenging the award to McCarty. The Fearn protest was referred to the Division of Administrative Hearings for hearing. However, after the protest was referred to the Division of Administrative Hearings but before McCarty could intervene or a hearing could be held, the Department reviewed the McCarty proposal and found it to be non- responsive. The Department determined that the McCarty proposal was non-responsive because the McCarty proposal was for more space than authorized by the BID and that not all owners of the property proposed to be leased signed the BID. After determining that the McCarty proposal was non-responsive, the Department rejected the McCarty proposal and awarded the lease contract for Lease No. 700:0556 to Fearn. Upon Fearn withdrawing its protest, the Division of Administrative Hearings closed its file by relinquishing jurisdiction to the Department and the Department entered a Final Order dismissing the Fearn protest. By letter dated July 31, 1990, the Department advised McCarty of its decision to reject his proposal as non- responsive and award the bid to Fearn. By this same letter, the Department advised McCarty of his right to file a protest and his right to a formal administrative hearing. B. Lease Space Requirement Prior to issuing the BID the Department submitted to the Department of General Services (DGS) a Request For Prior Approval of Space Need (BPM Form 4405) wherein the Department justified, through a Letter of Agency Staffing, the need for 3,108 square feet of office space to be located in an existing facility in Auburndale, Polk County, Florida. However, the Department requested approval of only 3,017 net square feet. DGS approved the request for 3,017 net square feet of space and the Department issued the BID referred to in Finding of Fact l. The BID requested bidders to submit proposals to lease 3,017 square feet (plus or minus 3%) measured in accordance with Standard Method of Space Measurement and advised the bidder that the space offered must be within the plus or minus three percent required. The maximum square footage requested by the BID was 3,108 square feet (3017 + 3%). The McCarty proposal was for 3,150 square feet or 42 square feet over the maximum requested. The Department was aware of, and considered, the square feet of rental space proposed by each response to the BID in the initial evaluation since it rejected two proposals for exceeding this requirement by 145 and 392 square feet, respectively. The Department apparently considered the excess 42 square feet of space in the McCarty proposal in its initial evaluation but through an oversight failed to reject the McCarty proposal as it had in the other two proposals. Upon the Fearn protest being filed the Department's legal office reviewed the McCarty proposal and determined that the excess 42 square feet of space was a deviation that should not have been waived. At this point, the McCarty proposal was found to be non-responsive. The price per square foot of the McCarty proposal in all years, one through five, was less than the Fearn proposal. The total price of the lease in the McCarty proposal, including the excess 42 square feet, in all years, one through five, was less than the Fearn proposal. There was no evidence that the cost of the McCarty proposal would exceed the amount budgeted by the Department for this lease. C. Signature of Owner(s) and Transfer of Ownership Requirements. At the time McCarty signed and submitted the BID he was co-owner of the property bid with Adrian Gabaldon. Gabaldon was aware that McCarty was offering the property in question for lease to the Department having witnessed McCarty's signature on the BID and having been involved with the Department personnel concerning the BID. Section D. 4. A, General Provision, page 8 of the BID provides in pertinent part: Each proposal shall be signed by the owner,(s), corporate officer(s), or legal representative(s). The corporate, trade, or partnership title must be either stamped or typewritten beside the actual signature(s). If the Bid Submittal is signed by an agent, written evidence from the owner of record of his/her authority must accompany the proposal McCarty's signature was the only signature, as owner, appearing on the McCarty proposal. Below McCarty's signature the word "owner" was handwritten. Gabaldon signed the McCarty proposal as a witness to McCarty's signature and not as an owner. There is insufficient evidence to establish that at the time McCarty submitted his proposal the property bid was owned by a partnership consisting of McCarty and Gabaldon. There is no printed or typewritten partnership name in the vicinity of McCarty's signature in his proposal or anywhere else in his proposal. Sometime between the date McCarty submitted his BID and the date of the hearing, Gabaldon transferred his interest in the property bid to McCarty. D. General By signing the BID, McCarty agreed to comply with all terms and conditions of the BID and certified his understanding of those terms and conditions. In accordance with Section D.10., General Provisions, page 9 of the BID, all question concerning the specifications were to be directed to C. Donald Waldron. And, although McCarty or Gabaldon may have discussed the space requirement and other matters with certain employees of the Department, they knew, or should have known, that these questions should have been directed to Waldron. Otherwise, the answer could not be relied upon. Neither McCarty or Gabaldon ever contacted Waldron concerning the terms, conditions or specifications of the BID and, more specifically, concerning the space requirement or who was required to sign the BID. Submitted with the Fearn proposal was a letter from Entrepreneur of Tampa as owner of the property bid in the Fearn proposal appointing David Fearn, CCIM and The Fearn Partnership, Inc. as its agent to submit a proposal on behalf of Entrepreneur of Tampa.
Recommendation Pursuant to notice, the Division of Administrative Hearings by its duly designated Hearing Officer, William R. Cave, held a formal hearing in the above- captioned case on October 16, 1990 in Tampa, Florida.
Findings Of Fact Based upon the documentary evidence received and the entire record compiled herein, I hereby note the following findings of fact: Notice and Invitation to Bid on State Project Number 72001-3448 (the project) was extended to various contractors by the Respondent, Department of Transportation, on August 1, 1985. Sealed bids on the project were opened August 28, 1985. The scope of the project involved cleaning and painting the structural steel of the Buckman Bridge over the St. Johns River in Jacksonville, Florida. (State Bridge Numbers 720249 and 720343). The bids were opened and Petitioner was the apparent low bidder on the project with a bid amount of $193,000. The Department of Transportation, on October 2, 1985, rejected all bids "due to error in quantities in plans." According to the contract plans and specifications utilized by the Department of Transportation for the project, the beams, girders, bracing and trusses were composed of 2,540 tons of structural steel. The plans were in error and the tonnage of structural steel was less than 2,540 tons. Petitioner, upon visiting the job site as required, immediately recognized that there was less steel in the bridge than shown in the plans. In submitting and formulating his bid, the Petitioner considered the amount of work and materials which would actually be required to complete the project. 6 Prior to the bids being posted on the project, the Department of Transportation discovered that the amount of structural steel noted in the plans was grossly overestimated. On October 2, 1985, the Department of Transportation notified bidders in writing that all bids submitted on the project were rejected and that the plans would be revised and the project relet.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is, RECOMMENDED that the petition of Industrial Enterprise Sandblast and Painting, Inc., protesting the rejection of all bids on State Project No. 72001- 3448, be dismissed. DONE AND ORDERED this 11th day of December 1985 in Tallahassee, Florida. W. MATTHEW STEVENSON Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 11th day of December 1985. APPENDIX Respondent's Findings of Fact FINDING RULING Accepted; see Recommended Order paragraph 1. Accepted; see Recommended Order paragraph 2. Accepted, but not included because subordinate. Accepted; see Recommended Order paragraph 4. Accepted; see Recommended Order paragraphs 3 and 6. Accepted; see Recommended Order paragraphs 3 and 6. Accepted; see Recommended Order paragraph 6. COPIES FURNISHED: HONORABLE THOMAS E. DRAWDY, SECRETARY DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING TALLAHASSEE, FLORIDA 32301 A. J. SPALLA, ESQUIRE GENERAL COUNSEL DEPARTMENT OF TRANSPORTATION 562 HAYDON BURNS BUILDING TALLAHASSEE, FLORIDA 32301 LARRY D. SCOTT, ESQUIRE DEPARTMENT OF TRANSPORTATION HAYDON BURNS BUILDING, M.S. 58 TALLAHASSEE, FLORIDA 32301-8064 INDUSTRIAL ENTERPRISE SANDBLAST & PAINTING, INC. P. O. BOX 1547 1502 FOX RUN DRIVE TARPON SPRINGS, FLORIDA 32486-1547
Findings Of Fact Respondent solicited contractors to replace a chiller in Building #45 at its Sunland facility located in Marianna, Florida. The project number for the replacement was HRS-95203000. The vendors were allowed until 10:00 a.m., Central Daylight Time, August 24, 1995, to submit responses to the request for bids. On August 24, 1995, Respondent received four responses. The responses were from Petitioner, Neel, JLS International and Smiths, Inc. On August 24, 1995, when the bids were opened JLS International and Smiths, Inc. were disqualified as nonresponsive bidders. On August 24, 1995, Respondent determined that Petitioner had submitted a base bid in the amount of $141,185.00 and as described on the tabulation form, an alternate bid in the amount of $14,750.00 for confined space compliance. The Neel bid as reflected on the tabulation was a base bid for $142,000.00. The forms upon which Petitioner and Neel had submitted their bid prices were forms identical in their format. The format was required by the Respondent. The Petitioner's bid stated: Base Bid: $141,185.00 With foregoing as a Base Bid the following costs of alternate proposals are submitted in accordance with the drawings and specifi- cations. Alternate No. 1 Add or Deduct $ N/A Alternate No. 2 Add of Deduct $ Alternate No. 3 Add or Deduct $ If more or less work is required than that qualified by the specifications and drawings the following unit prices shall be applicable. *If Required (not included in base bid) ITEM UNIT PRICE Compliance for confined space for refrigerants & equipment *Note: Base bid price is compiled costs for construction duration & equipment delivery of 18 weeks. When Petitioner submitted its response to the request for bids, it offered no further explanation concerning the $14,750.00 price for "compliance for confined space for refrigerants and equipment" than has already been described. The Neel bid stated: Base Bid: $142,000.00 With foregoing as a Base Bid the following costs of alternate proposals are submitted in accordance with the drawings and specifications. Alternate No. 1 Add or Deduct $ Alternate No. 2 Add of Deduct $ Alternate No. 3 Add or Deduct $ If more or less work is required than that qualified by the specifications and drawings the following unit prices shall be applicable. ITEM UNIT PRICE Respondent had provided written instructions to the bidders concerning execution of the bid proposal form to the effect: Omit mention of alternates entirely, if there are none. Unit prices are to be used only if unit prices are applicable and approved by the Project Director. This project did not call for alternate bids or unit prices. The request for bids did not contemplate a quotation other than the base bid for all items, to include any costs associated with implementation of a design that complies with all applicable codes associated with the installation and with any laws pertaining to refrigerant handling. Posting of the bid evaluation/tabulation and notice of contract award recommendation was given on September 8, 1995, indicating Respondent's intent to award to Petitioner in the amount of $141,185.00 as the base bid for the project. Prior to the posting of the bids on September 8, 1995, as was customary, Thomas McAuley, an account representative for Petitioner, who had submitted Petitioner's bid response had met with Respondent's project manager Glen Jenkins, a Professional Engineer III. The meeting was held to discuss Petitioner's bid response as the apparent responsive lowest and best bidder. In the conversation held between Messrs. McAuley and Jenkins, they did not discuss the $14,750.00 separate price quotation in the Petitioner's bid. They did discuss compliance with the codes that were going to be applicable to the project and whether the base price quotation took into account the code requirements. McAuley indicated his opinion that the base price quotation did account for compliance with code requirements contemplated by the terms in the request for bids. McAuley was specifically asked whether Petitioner was complete and thorough in its compliance with the bid specifications and in its prices, inclusive of all the items that were going to be mandated by the State of Florida, Department of Management Services. McAuley answered that question in the affirmative. In the specifications, under Article 7, Miscellaneous Provisions, within the request for bids is set forth Sections 7.2, 7.3 and 7.4 related to permit and code compliance issues, which state as follows: State Building Permit. Current DMS requirements for state building permit applications and for permit inspections are attached. It shall be the Contractor's responsibility to apply for and pay all costs associated with the state building permit (including the cost of preparing any permit documents on which the state building official may require the seal of a registered engineer). It shall further be the Contractor's responsi- bility to comply fully with all permit inspection requirements. Code Compliance. It is the Contractor's responsibility to implement a design complying with all codes applicable to this installation, and with all laws pertaining to refrigerant handling. Neither the Owner nor the Project Manager shall be held responsible for stating or setting forth (in this or any other document, or verbally) any code requirement which may be applicable to this project. By disseminating this "Statement of Work Scope and Contractual Conditions", the Owner merely sets forth minimum acceptance criteria for materials and workmanship, and neither the Owner nor the Project Manager shall thereby be held liable, in full or in part, for the Contractor's adherence or non-adherence to any governing code and/or legal requirement. Special Terms and Conditions for Cont- racts Under the National Energy Conservation Policy Act. Due to partial project funding under a federal NECPA grant, Contractor compliance with federal laws and regulations are a special requirement of this project. Special terms and conditions pertaining to wages and payrolls, records retention and access, apprenticeship and training, equal opportunity access, are set forth in the attached "Special Terms and Conditions for Contracts Under the National Energy Conserva- tion Policy Act". The contractor shall responsible for full compliance with the attached special terms and conditions. In the meeting between McAuley and Jenkins discussion was made concerning compliance with pertinent electrical codes. One question was asked about pipes in the system being installed in a manner to allow variable speed drives to be placed above the pipes. Jenkins considered that speed drive placement underneath the pipes would be contrary to code requirements. Related to the mechanical features in the project there was discussion about the provision of refrigerants in compliance with the mechanical code that pertained. In the meeting there was little discussion about code compliance within confined spaces, because the two individuals did not perceive that there would likely be a code requirement concerning confined spaces. Mention was made that some code inspector or code official who came to the job site might require attention to the confined spaces, even though that requirement was not found in the code. According to Jenkins, in his recount of the meeting with McAuley, if a code official required compliance for an item in the confined spaces that was not set forth in the code, that would constitute an item about which the Respondent had not requested information to be included in the base price quotation offered by the Petitioner. Further, Jenkins stated there would not be a problem for failing to offer a quotation for the features required by the inspector, because it was not sought by the Respondent in designing the bid requirements. As Jenkins describes, Petitioner's unit price for that work had been made known. This is taken to refer to the $14,750.00 quote for compliance for confined space for refrigerants and equipment. In that circumstance, Mr. Jenkins told Mr. McAuley that if a code official required something that was not contemplated by the code and the Respondent did not consider it worth fighting over, then Respondent would have to process a change order to install that equipment. This is taken to mean that Petitioner would be paid additional money under a change order for installing the equipment in the event that the Respondent did not choose to contest the decision of the code official. At the time that McAuley and Jenkins had the meeting, counsel for Neel had contacted Jenkins about protesting the decision to award the contract to Petitioner. That individual had stated the opinion to Respondent that Petitioner's discussion of confined space for refrigerants and the equipment at the additional cost of $14,750.00 might be perceived as potentially a code exclusion in violation of the requirements of Section 7.3 to the request for bids. Neel's counsel stated his belief that the vendors were expected to be in compliance with all codes and laws, even if it was not known to be a code requirement at the time the bid was submitted. He was concerned that someone might try and make it a requirement in the future. The Neel attorney explained that the reference to compliance for confined space for refrigerants and equipment set forth in Petitioner's bid response might be construed as a comment on code requirements through the contingency of someone's interpretation of the code. He believed that the responses to the request for bids needed to address that contingency as part of the basic quotation, not as a separate quotation. At the time McAuley and Jenkins had their meeting, Jenkins did not know of any requirement for compliance for confined space for refrigerants and equipment based upon his experience, but he had not researched the issue. Through information which Neel imparted to Mr. Jenkins before the meeting was held between Jenkins and McAuley, the Neel attorney expressed the opinion that there was not a present code requirement for compliance for confined space for refrigerants and equipment, a view held by McAuley and Jenkins. At the time the meeting was held between McAuley and Jenkins, Jenkins was of the opinion that the requirement for compliance for confined space for refrigerants and equipment was not foreseen to be a likely code requirement. As contrasted with Neel's view, as explained to Jenkins, that its base bid was intended to cover the eventuality that there might become a requirement for compliance for confined space for refrigerants and equipment, Neel's representative stated that Petitioner's bid had segregated that contingency for consideration by quoting the price of $14,750.00 separately. Neel did not appear at the hearing and there was no direct proof that the $142,000.00 base bid by Neel addressed the contingency that a future requirement might be imposed for compliance for confined space for refrigerants and equipment. However, it may properly be assumed the Neel bid met the requirement for a base bid quotation to cover all costs to Respondent absent proof to the contrary. Later, when Respondent decided to award the contract to Neel, Respondent implied that the $142,000.00 base bid would meet code requirements contemplated by Section 7.3. Concerning the responsibility to determine which code requirements pertained and when, Respondent expected the vendors to derive that answer. This case was unlike most projects by the Respondent in which design professionals, engineers or architects create design documents that are completed in view of code requirements and the vendors assume that the bid documents prepared would be in conformance with code requirements. At hearing Mr. Jenkins, as project manager, opined that Section 7.3 obligated the contractor to meet existing requirements of the permitting authorities, and if during the pendency of the contract there was some change to the codes or code requirements set forth by code inspectors, then the contractor must assume the risk. Moreover, when the bids were opened and tabulated initially and the preliminary decision was made to award the contract to Petitioner, Mr. Jenkins perceived the quotation of $14,750.00 set forth in the Petitioner's bid to be a unit price for a scope of work that was not expected to be required at any point and was not been asked for by Respondent. Jenkins considered this quote as an alternate that was being proffered, something that Respondent might opt for in the future. Although not set forth in exact terms, Mr. Jenkins perceived this information in the Petitioner's bid response to be related to an alarm system and breathing apparatuses. He held this belief based upon his experience in association with compliance for confined spaces. Mr. Jenkins surmised that what was being described by the Petitioner was the type of installation that you would put into a closed mechanical room where a refrigeration machine was located that contained toxic refrigerant, which if released might kill a serviceman. In that connection when discussing refrigerant compliance with Mr. McAuley in their meeting, Mr. Jenkins indicated that the discussion had been limited because the type of machine proposed by the Petitioner was a 134A machine which is "ozone friendly" and not restricted by clean air amendment regulations. Following the posting on September 8, 1995, which recommended that the contract be awarded to Petitioner, Neel had 72 hours to file a protest. That protest was filed. Having considered the remarks by Neel's attorney in support of that protest, Mr. Jenkins became persuaded that Petitioner might not have intended to describe an alternate (unsolicited) purchase when discussing the compliance for confined space for refrigerants and equipment for a price of $14,750.00; instead, Petitioner may have been describing how to comply with future code requirements. Consequently, Mr. Jenkins attempted to settle the issue by presenting the opportunity for the Petitioner to obtain a letter from the Department of Management Services permitting office establishing that the equipment described in the bid by Petitioner for compliance for confined space refrigerants and equipment was not then a code requirement. Mr. Jenkins wanted that information to be in writing. This opportunity to submit information was imparted to Stuart Zaritsky, Branch Manager for Petitioner in its Tallahassee office. Petitioner did not take the opportunity to send written information concerning the compliance for confined space for refrigerants and equipment as not being required by applicable codes. Instead, Mr. Zaritsky called Mr. Jenkins and told him that Petitioner had placed calls to the Department of Management Services permitting office and was unable to get a definitive response at that time. On September 26, 1995, Mr. Zaritsky wrote to Mr. Jenkins and stated: The confined space for refrigerants and equipment compliance is based on ASHRAE recommendations only. If any of these items are required by code, then we will install it at no cost. Our base bid of $141,185 is based on the specifications, including paragraph 7.3 on page 13 and all other portions of the contract documents without any qualifications. If it is determined by the owner, that they wish to upgrade the machine room to ASHRAE 15 standards, and it is not required by code, the $14,750 would be the price to add refrigerant monitors, refrigerant purge fans and self-contained breathing apparatus. Should the jurisdictional authority of code compliance determine that these items are required by code, they will be installed as part of our base bid of $141,185. On September 29, 1995, Respondent gave notice of an amended bid tabulation finding Neel to be the responsive lowest and best bidder for the project in its quotation of $142,000.00. The September 29, 1995 correspondence notified the Petitioner that: After further review of issues raised by responsive bidders on the above project, the Department has determined that the bid sub- mitted by Natkin Service Co. on the above referenced project either: is nonresponsive, because the bid was not in compliance with Section 7.3 of the Statement of Work Scope and Contractual Conditions, since it exempted its bid from certain refrigerant handling requirements; or if responsive, is in the amount of $155,935.00. In either case, the bid submitted by Neel Mechanical Contractors, Inc. in the amount of $142,000.00 is the lowest responsive bid. The September 29, 1995 determination that Petitioner was not responsive led to Petitioner's present protest. Sometime shortly before the amended posting of the bid tabulation on September 29, 1995, Mr. Jenkins spoke to Mr. McAuley concerning the opportunity to present information to address the question concerning whether compliance for confined spaces for refrigerants and equipment was a code requirement. To assist the Petitioner Mr. Jenkins provided information which had been received from the Department of Community Affairs related to code provisions under enforcement by the Department of Management Services. This information was not provided by Mr. Jenkins as a determination of code requirements; it was provided to inform Petitioner concerning what Mr. Jenkins understood to be the latest code requirements. The expectation was still held that Petitioner would submit separate information from the Department of Management Services that would settle the issue concerning the possible need to comply with code requirements for confined spaces for refrigerants and equipment. As Mr. Jenkins described at hearing, the basis for finding the Petitioner's bid unresponsive was alternatively stated. First, the Respondent believes that Petitioner tried to avoid the responsibility for complying with code requirements, whatever they may be during the contract pendency; or second, Petitioner split its bid into two parts. One in the amount of $141,185.00 for matters unrelated to code compliance for confined space for refrigerants and equipment and the second in an amount of $14,750.00 for such compliance. If the former view is taken, Petitioner's bid is unresponsive. If the latter view is taken Petitioner's bid is responsive but exceeds the quotation by the responsive bidder Neel. At hearing it was not proven by competent evidence whether there was any necessity to meet code requirements for compliance for confined space for refrigerants and equipment as described in Petitioner's bid response at any point in time. Other provisions within the request for bids that pertain to the manner in which the vender would address its price quotation are as follows: 1.5 The Contract Sum shall initially be that lump-sum amount which the Contractor shall have enclosed in his sealed bid proposal. Subject to additions and deduc- tions by Change Order, the Contract Sum shall be the amount which the Owner shall pay the Contractor for the performance of the work, subject to the terms and conditions as provided in the Contract Documents. 2.6 The Contractor shall apply for, and pay all costs associated with, any permit which may be required by the Department of Management Services. Such permitting costs for which the Contractor shall be responsible shall include the preparation of any permit documents on which the building official may require the seal of a registered engineer. B-9 Instruction for bidders; They (the bidders) are also required to examine carefully any drawings, specifications and other bidding documents to inform themselves thoroughly regarding any and all conditions and requirements that may in any manner effect the work.
Recommendation Upon consideration of the facts found and the conclusions of law reached, it is, RECOMMENDED: That the final order be entered which dismisses Petitioner's protest based upon the unresponsive of its bid and awards the contract for Project No. HRS- 95203000 to Neel. DONE and ENTERED this 20th day of December, 1995, in Tallahassee, Florida. CHARLES C. ADAMS 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 December, 1995. APPENDIX The following discussion is given concerning the proposed fact finding by the parties: Petitioner's Facts: Paragraph B1 is contrary to facts found. Paragraph B2 is rejected in the suggestion that Respondent should be bound by resort to extrinsic evidence to determine Petitioner responsive to the bid invitation. Paragraph B3 is contrary to facts found. Paragraph B4 is rejected in the suggestion that it was inappropriate to defer to the Neel protest as a means for Respondent to reconsider its position. Paragraph B5 is rejected in the suggestion that Neel has controlled the outcome in this case. Paragraph B6 is rejected in the suggestion that Petitioner has complied with the bid invitation requirements. Paragraph B7 is rejected in the suggestion that the contrary position stated by the Respondent in the informal review wherein Petitioner had been preliminarily determined to be the responsive bidder and the point of view at hearing would preclude a decision favoring the Respondent. Respondent's Facts: Paragraphs 1 through 9 are subordinate to facts found. COPIES FURNISHED: Tommy McAuley, Account Manager Natkin Service Company 3428 A. Garber Drive Tallahassee, FL 32303 Sam Chavers, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building 1, Suite 200 Tallahassee, FL 32399-0700 Robert L. Powell, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Kim Tucker, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Informational Copies: JLS International, Inc. P. O. Box 490 Foley, AL 36536 Neel Mechanical Contractors, Inc. P. O. Box 1916 Thomasville, GA 31799 Smith's, Inc. of Dothan P. O. Box 1207 Dothan, AL 36302
The Issue The issue in this case is whether Respondent properly rejected the bid of Petitioner.
Findings Of Fact Respondent issued on February 28, 1990, an invitation to bid concerning the installation of bleachers at a high school ("ITB"). The ITB was duly advertised. Among the bidders was Interkal, Inc., which is a manufacturer of bleachers. The Interkal bid, which was timely submitted, was executed by its president. The Interkal bid contained a bid bond naming Interkal as principal and a certification from the secretary of Interkal reflecting a corporate resolution authorizing the execution of all bid documents on behalf of Interkal by its corporate officers. The Interkal bid disclosed two subcontractors. The supplier was shown as Interkal, and the erector was shown as Petitioner. Petitioner is the authorized factory representative for Interkal in Florida. As such, Petitioner solicits business and installs and removes bleachers on behalf of Interkal. As compensation, Petitioner receives commissions for such work from Interkal. However, the shareholder and chief executive officer of Petitioner is not a shareholder or officer of Interkal. In addition, Petitioner is not authorized to execute bid documents on behalf of Interkal. Petitioner is no more than a Subcontrator of Interkal. The bidder in this case was Interkal, not Petitioner, even though Petitioner handled much of the paperwork or its manufacturer. When an unrelated bidder was awarded the contract, Petitioner filed a formal written protest in its name. Interkal has not participated as a party in the subject proceeding.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that Respondent enter a Final Order dismissing the petition of Diversified Design Enterprises. ENTERED this 22nd day of May, 1990, in Tallahassee, Florida. ROBERT D. MEALE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of May, 1990. COPIES FURNISHED: Ned N. Julian Stenstrom, McIntosh, et al. P.O. Box 1330 Sanford, FL 32772-1330 William Merkel, President Diversified Design Enterprises 321 N.E. Second Avenue Delray Beach, FL 33444 Robert W. Hughes, Superintendent Seminole County School Board 1211 Mellonville Avenue Sanford, FL 32771
The Issue The issue for determination is whether Respondent's intent to award a contract for bridge-tending services (RFP DOT 92/93 2088 REBID) to Intervenor constitutes fraudulent, arbitrary, capricious, illegal or dishonest action.
Findings Of Fact The parties stipulated to findings of fact set forth in paragraphs 1.-12., below. Stipulated Facts Respondent issued the RFP for bridge-tending services on May 14, 1993. Proposals submitted in response to the RFP were opened on June 16, 1993. Proposals were submitted by five firms, including Petitioner and Intervenor. All proposals were determined at the time to be responsive. A Technical Review Committee (TRC) was appointed to review the technical portion of the proposals. The three members of the TRC were Alan Hyman, J. L. Gillis, and Yingyong Sujjavanich. The members reviewed the technical portion of the proposals on June 17, 1993. The evaluation forms completed by the TRC and a summary score sheet were delivered to Respondent's purchasing office on the morning of June 18, 1993. The price proposal was evaluated by Respondent's purchasing office. The price evaluation of each proposal was performed by applying a formula which compared the submitted price quotations. After the scores for the technical proposal and the cost proposals were totalled, it was determined that Intervenor's proposal had earned the highest number of points. This result was presented to Respondent's District 2 Executive Committee and a recommendation was communicated by the Purchasing Director to award the RFP to Intervenor. The Executive Committee accepted the recommendation and directed that the contract be awarded to Intervenor. On June 18, 1993, at 4 p.m., the bid tabs were posted noticing Respondent's intent to award the contract to Intervenor. On or about July 6, 1993, Petitioner requested a meeting with Respondent's representatives regarding the RFP. That meeting was held on July 9, 1993. At the meeting, Petitioner raised an issue regarding an arithmetic error in the scoring of the technical proposals. Intervenor remained the proposer with the highest number of points. However, another proposal formerly ranked as number two was lowered to number three status and Petitioner, previously ranked number three, was raised to number two rank. On July 12, 1993, Respondent posted an amended bid tab indicating its intent to award the contract to Intervenor. Other Facts Respondent chose to score the bid pricing, a non- subjective task, in Respondent's District 2 office. Technical portions of the proposals were reviewed by the TRC, comprised of members from Respondent's District 5 office. This unusual step was taken by Respondent in order to reduce prejudice to any proposal in view of previous accusations made against District 2 employees. Bud Rosier, Respondent's employee, has overall responsibility for bridge determination that District 5 employees chosen as committee members were qualified to evaluate the proposals. Each response to the RFP contained a technical proposal and a price proposal. Intervenor's technical proposal received 1.33 points less than Petitioner's technical proposal. The price proposals, as noted above, were scored in accordance with a mathematical formula that compares price proposals to each other and does not take any subjective factors into consideration. Intervenor was awarded 5.55 points, compared to Petitioner who received no points for a proposal more than $140,000 higher for the initial year of the contemplated contract. Although members of the TRC were not given any background information by Respondent regarding the competing proposals, beyond that contained in the submitted bid packages, no information was withheld from the committee. The members were given adequate time to review the proposals and do any desired independent background checking regarding past performance of any proposer, although no requirement in the RFP mandated such a background review. At least one of the TRC members, Sujjavanich, chose not to independently research past performance of the Intervenor. No evidence was offered at hearing with regard to whether the other two members independently researched any of the proposers' past performances. Even if review of past performance, apart from the materials submitted by the proposers, were required by provisions of the RFP, failure of the evaluators to accomplish that task would result only in the loss to Intervenor of the 3.66 points awarded for past performance and Intervenor, with a remaining total of 81.89 points, would remain the highest ranked proposer. In view of the objective process used to arrive at the results of the evaluation of the prices of the competing proposals, there was no need to provide this information to the members of the TRC who were doing the technical proposal evaluation. Although the RFP provided that the TRC would be given such results, the failure of Respondent's personnel to provide this information to the evaluators could not have made any difference in the final result since the committee, using the objective price evaluation criteria, would have arrived at the same result as the purchasing office on cost scores. The admitted failure to provide the superfluous cost information to the TRC is inadequate to show that such omission resulted in prejudice to the final scores of any of the competing proposals and must be considered to be only a minor variation from the RFP by Respondent. Contrary to Petitioner's allegations, there is no competent substantial evidence to support any finding that the members of the TRC (Hyman, Gillis, and Sujjavanich) did not possess required background, experience or professional credentials adequate for evaluating proposals for bridge-tending services. All three members of the TRC were familiar with the RFP, attachments to the RFP, bridge-tending procedures and bridge-tending qualification procedures. There is no competent substantial evidence to establish that Intervenor's proposal is not financially feasible. Proposed utilization of 72 bridge-tenders by Intervenor for a total price of $673,333.44 does not mean that 72 bridge-tender positions would be established or filled, or that the positions would be paid at the rate proposed by Petitioner of $8.40 per hour. The evidence establishes that a proposer would need an optimum number of bridge requirements.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that a Final Order be entered granting the award of the bid in RFP DOT 92/93 2088 Rebid to Intervenor. DONE AND ENTERED this 4th day of October, 1993, in Tallahassee, Leon County, Florida. DON W. DAVIS 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 4th day of October, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-4271BID The following constitutes my specific rulings, in accordance with Section 120.59, Florida Statutes, on findings of fact submitted by the parties. Petitioner's Proposed Findings. 1.-12. Accepted. 13.-16. Rejected, relevancy. 17. Accepted. 18.-19. Rejected, relevancy. 20.-25. Accepted. 26.-27. Rejected, cumulative. 28. Rejected, credibility. 29.-33. Rejected, relevancy. 34.-35. Accepted. 36.-37. Rejected, argumentative and mischaracterization. 38.-46. Rejected, subordinate to HO findings. 47.-51. Rejected, relevancy. Intervenor's Proposed Findings. 1.-2. Rejected, cumulative. 3.-4. Accepted. 5.-6. Rejected, unnecessary. Rejected, cumulative. Rejected, unnecessary. Rejected, argumentative. 10.-11. Rejected, unnecessary. 12.-13. Adopted by reference. 14.-16. Accepted, but not verbatim. 17.-22. Adopted by reference. 23. Rejected, unnecessary. 24.-30. Adopted, but not verbatim. 31. Rejected, narrative. 32.-35. Rejected, cumulative. Respondent's Proposed Findings. 1.-11. Adopted. 12. Rejected, unnecessary. 13.-17. Adopted, not verbatim. 18.-19. Rejected, cumulative. 20.-22. Adopted. 23. Rejected, recitation of RFP. 24.-26. Adopted. 27. Rejected, recitation of RFP. 28.-29. Adopted in substance. COPIES FURNISHED: Thomas Cassidy, III, Esquire. John O. Williams, Esquire Renaissance Square 1343 East Tennessee Street Tallahassee, Florida 32308 Carolyn S. Holifield, Esquire Mark D. Tucker, Esquire Department of Transportation Haydon Burns Building, Mail Station 58 605 Suwanee Street Tallahassee, Florida 32399-0458 Timothy G. Schoenwalder, Esquire 204-B South Monroe Street Tallahassee, Florida 32302-3068 Ben G. Watts, Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399 Thornton J. Williams General Counsel Department of Transportation Haydon Burns Building # 562 605 Suwannee Street Tallahassee, Florida 32399
Findings Of Fact Prior to June, 1988, HRS determined that it needed 32,000 square feet of office space to house some of its indigent social services for southern Escambia County. Since the desired office space is greater than 2,000 square feet HRS was required to competitively bid lease number 590:1984. Towards that end, Respondent prepared an Invitation to Bid and a bid submittal package. The package contained various bid specifications, bid evaluation criteria and the numerical weight assigned to each of those criteria. Specific areas of importance to Respondent in the selection of its office space were: client safety one building to house all its units employee morale moving costs traffic flow within the building public access Many of the above areas were important to HRS since the agency would render indigent services to approximately 17,000 people a month, many of whom are handicapped or lack good mobility due to age or infirmity. Employee morale was important because of high employee burn out due to rendering aid to so many people who have so little and supplying a pleasant environment conducive to the work of the employees. Moving costs were important should HRS be required to find other space to operate in while necessary remodeling took place in the selected building, or be required to incur the expense of moving to a new building. 1/ All of the above areas were covered by one of Respondent's weighted bid evaluation criteria. The District Administrator of HRS, Chelene Schembera, is ultimately responsible for bidding, selection and leasing of all HRS facilities within District I, including Escambia County, Florida. In order to accomplish this task, Ms. Schembera appointed a bid evaluation committee to review and grade the responsive bids under the criteria established in the bid package, and to recommend to her the committee's choice of the lowest and best bid. Ms. Schembera's purpose in establishing the bid evaluation committee was to secure a cross section of input from people who had a variety of backgrounds and knowledge that would be material in evaluating the office space under the uses for which it was intended and the relative public worth of the work space. Ms. Schembera appointed individual who were familiar with the type of work to be done in the proposed space, as well as a persons familiar with the bid process. Ms. Schembera assigned to serve on the committee Charles Bates, Deputy District Administrator; Jim Peters, to provide a fiscal and overall administrative perspective as well as bid expertise; two citizens from the District Advisory Council to assure objectivity and to look at the properties from the perspective of a private citizen; Mamun Rashied, a program manager; Darlene McFarland, a program manager; Cherie Neal, a unit supervisor and program worker; and Stacey Cassidy, a clerical employee. Ms. Schembera did not personally know Cherie Neal or Stacey Cassidy. These staff members were designated by the supervisors upon Ms. Schembera's direction that she wanted persons who were both intelligent and respected by their peers. One private citizen member of the committee did not participate. The committee as constituted showed a great deal of thought on Ms. Schembera's part to ensure the objectivity of the bid process she was engaging in and to ensure the maximum amount of input from persons who had experience relevant to the overall review of the proposed real estate and to the decision they were being asked to make. The selection of the bid evaluation committee members was neither an arbitrary nor capricious act on Ms. Schembera's part. In fact, the evidence demonstrated the merit in constituting the committee as she did for the input she sought. The bid evaluation committee members, minus Mr. Bates, were briefed on their duties by Joe Pastucha, Facilities Services Manager. Mr. Pastucha is part of the staff responsible for the bid process at HRS. He provided these committee members with the weighted bid evaluation criteria found at page 15 in the bid package. He also gave the committee members a copy of Chapter 5 of the HRS manual containing guidelines for the bid process. His verbal instructions on specific procedures to follow in the evaluation process were limited since he did not wish to improperly influence the committee members. On July 20, 1988, HRS received three bids responding to its invitation to bid on Lease Number 590:1984. Bid A was submitted by Phillips and Company, the apparent second lowest bidder and Intervenor in this case. Its property consisted of one multi-story building located at 1740 North Palafox Street, Pensacola, Florida. Bid B was not responsive and therefore was not considered by HRS and is not a part of this litigation. Bid C was submitted by Petitioner Carmon S. Boone, and was the apparent low bid. Mr. Boone's property consisted of two buildings located at 401 and 411 North Baylen Street, Pensacola, Florida. The Boone property is the present location of Respondent's offices. Both Bid A and Bid C were within the mandatory geographical area designated in the bid package. Once the bids were received the bid evaluation committee began its work. The committee members, minus Mr. Bates, visited the Phillips property. However, the members did not visit the Boone property. There was no need. Four of the members currently worked at the Boone property and the other members had previously visited the Boone property on various other occasions. Mr. Bates was likewise already familiar with both properties. All members were sufficiently familiar with the cogent aspects of each property to allow them to make a rational decision. The bid evaluation committee, minus Mr. Bates, met as a group to evaluate each property in accordance with the weighted bid evaluation criteria. Each individual scored their sheets separately and the general consensus was supportive of recommending the Phillips property. Five committee members scored Mr. Phillips' property higher than the Boone property. The one exception was Mr. Peters who felt that HRS could not support a bid awarded for other than monetary reasons, i.e., he felt the lowest bid had to be accepted. Mr. Bates later reviewed all the bid synopsis sheets of the committee members and discussed the bid award with Mr. Peters and Mr. Pastucha. Mr. Bates felt that the Phillips property was the lowest and best bid. At about the same time, the staff responsible for providing technical assistance to the committee and the District Administrator were made aware that the general consensus of the committee was leaning towards the second lowest bidder, Phillips and Company, as the lowest and best bid. The staff members, one of whom was a bid committee member, disagreed with the award of the bid to Phillips and Company because the Boone property was the lower bid. The staff members sought to head off the committee's intended recommendation. The staff personnel held a meeting with some of the committee members in order to get them to join in a recommendation to Ms. Schembera of the Boone property. Mr. Boone was invited and attended the meeting. He was allowed to improperly bolster his bid by agreeing to convert the two buildings to one and other lesser additions. /2 The potential decision was discussed, but no committee member changed his or her mind. However, through a total lack of communication, a run away staff somehow rationalized themselves into a position of being authorized to submit a letter for Ms. Schembera's signature which awarded the Boone property the lease. Ms. Schembera became aware of her staff's attempt to subvert the bid process she had established. She refused to sign the letter submitted by the staff. She removed the staff member of the committee as a voting member. The staff member had supported the Boone property. She also removed a committee member who supported the Phillips property as a voting member. Ms. Schembera feared that her staff had improperly influenced this member to such an extent that his objectivity had been affected. Both members could still participate in committee discussions. Ms. Schembera thereby reasonably ensured the ongoing objectivity of the bid evaluation committee. The committee was reconvened, minus one member. It recommended the Phillips and Company property. Every reason given by the individual committee members for distinguishing and preferring one bid over another were rational and reasonable considerations and were covered by the bid evaluation criteria. Each individual member gave a rational and reasonable basis for the scoring he or she used on the bid synopsis score sheets. The scoring was done by each member after discussion of the two buildings and without influence from the other committee members. In essence, the committee felt that the Phillips property was the better property for the money. The Phillips property allowed working units to be located in one area with each such unit having its own access. It provided flat safe parking areas and sidewalks, bigger and more elevators, wide halls and windows which presented a bright, happy and pleasant working environment. The Boone property was in two buildings which could not accommodate co-located working units with their own access no matter how much remodeling took place. Parking and sidewalks are on a hill which is slippery when wet. It had one small elevator and narrow halls which did not adequately accommodate more than one wheel chair, and one ground floor where no windows could ever be remodeled into the building leaving a dark, dingy and unpleasant environment. Importantly, every committee member except for the staff member came to the conclusion that the Phillips and Company property was the lowest and best bid. There is no statutory or rule requirement that one scoring method be preferred over another. The only requirement is that the method be rational and reasonable especially where highly subjective, but legitimate criteria are involved in the selection of a particular piece of property. On these facts, the individual scoring methods used by the individual committee members were not arbitrary and capricious, but were very rational and reasonably related to the relative importance the committee members gave the above factors. After reviewing and considering information from the bid evaluation committee, the information on the bid synopsis sheet, and the oral recommendations of Mr. Bates, Mr. Peters and Mr. Pastucha, Ms. Schembera concluded that the Phillips property was vastly better, even considering costs. She found it to be materially superior in terms of construction, organization, client accessibility, handicap accessibility, repairability (in terms of walls), and maneuverability for clients and staff. She felt the Phillips' building's qualities would offer more "humanity" to the process of serving the Department's clients. Additional facts she considered when making her decision included the morale of the staff and their productivity; the ability of staff and clients to conduct their business in a reasonably pleasant, comfortable, safe, and easy to understand and comprehend environment; and the desire to provide a minimally adequate work space. In addition to other monetary costs, she considered energy costs and life cycle costs as reflected on the bid synopsis sheet. The bid synopsis sheet defined minimal energy and life cycle costs to be anything less than 55 BTU's per square feet per year. In this case, the Boone property reflected 39.5 BTU's per square feet and the Phillips property reflected 53.5 BTU's per square feet. Both properties were under the 55 BTU cutoff established by HRS. Translated into monetary figures (life cycle costs) the Boone property reflected a cost of $26,735.00 and the Phillips property reflected a cost of $41,160.00. It was the difference between the energy figures which caught Ms. Schembera's eye. In her layman's opinion, it was incomprehensible that the two buildings would have such a wide divergence of energy costs. /3 She learned from her staff that the information used to compute these costs was supplied by the bidders who had vested interests in the outcome. Ms. Schembera concluded the cost difference was minimal and not of overriding concern in relation to the physical characteristics of the two buildings and how they compared to each other. She quite correctly felt the two buildings were not comparable. In essence, the two buildings' differences in design location and construction rendered neither building comparable to the other building as a like facility under Section 255.254, Florida Statutes. 4/ Based on that information she gave the energy figures relatively little weight. More importantly, however, before the final bid award was made by HRS, the Division of General Services within HRS in its failsafe role in reviewing bids considered the life cycle cost figures of the two bids. The minimal language of Section 255.254, Florida Statutes, has been interpreted by HRS to mean that anything under 55 BTU's is minimal and except in one instance not applicable here, numerical differences under 55 BTU's are immaterial. The Division, without getting into the issue of the likeness of the facilities, concluded that both bids met the Department's interpretation of the "minimal" language of Section 255.254, Florida Statutes, and the relative numerical difference in the energy costs was immaterial. Ms. Schembera is entitled to rely on other more expert HRS Division staff to ensure a proper analysis of highly technical bid specifications such as the energy cost analysis required under Section 255.254, Florida Statutes. It does not matter that the review took place after Ms. Schembera had made her preliminary decision. What is important is that the review be made either personal or vicariously through staff before the final award is made. A proper review of energy costs was, therefore, made by Respondent before the final award was made. Likewise, Ms. Schembera's ultimate decision that the buildings were not comparable like facilities was a proper review of energy costs even though that conclusion was arrived at through a layman's unsophisticated, but more accurate intuition and common sense. To that extent, the energy cost data had no impact on the ultimate choice made by the District Administrator and were properly considered by the District Administrator. 5/ A letter for Ms. Schembera's signature adopting the committee's recommendation was drafted by Mr. Pastucha. The letter was signed and sent to the Department's Division of General Services for review. The District was requested to provide additional justification for its choice by the Department's Division of General Services. Mr. Rashied was directed to draft the response. He simply reorganized the original memorandum into a format more compatible with the Division's direction, clarified a few points and without significantly changing the content, submitted the response as directed. The Division acquiesced in Ms. Schembera's decision.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the Department of Health and Rehabilitative Services enter a final order dismissing Case NO. 88-4900BID, and awarding lease number 590:1984 to Phillips and Company as the lowest and best bidder. DONE and ORDERED this 5th day of January, 1989, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 5th day of January, 1988.
The Issue Whether Respondent acted contrary to the agency's governing statutes, rules, or policies or the bid specifications in its proposed decision to award Contract No. T7380 to Astaldi Construction Corporation ("Astaldi").
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing, and on the entire record of the proceeding, the following Findings of Fact are made: The Department is a state agency authorized by section 337.11 to contract for the construction and maintenance of roads within the State Highway System, the State Park Road System, and roads placed under its supervision by law. The Department is specifically authorized to award contracts under section 337.11(4) to “the lowest responsible bidder.” On April 15, 2016, the Department advertised a bid solicitation for Contract T7380, seeking contractors for the widening of a 3.8 mile portion of U.S. Highway 301 in Hillsborough County from two lanes to six lanes between State Road 674 and County Road 672 and over Big Bull Frog Creek. The advertisement provided a specification package for the project and the “Standard Specifications for Road and Bridge Construction” (“Standard Specifications”) used on Department roadway projects. The work included seven components: bridge structures (Section 0001), roadway (Section 0002), signage (Section 0003), lighting (Section 0004), signalization (Section 0005), utilities (Section 0006), and intelligent transportation systems (Section 0007). The advertisement identified 666 individual items of work to be performed and quantity units for each item. The project was advertised as a low-bid contract with a budget estimate of $51,702,729. The Department’s bid proposal form contains five columns with the following headings: Line Number; Item Number and Item Description; Approximate Quantities and Units; Unit Price; and Bid Amount. The bid proposal form contains line items for the seven components of the project. The utilities component contains 42 line items, each with an Item Number and Item Description. For example, Line Number 1410 corresponds with the following Item Number and Item Description: “1050 11225 Utility Pipe, F&I, PVC, Water/Sewer, 20–40.9 [inches].” Each bidder inserts a Unit Price for the line item in the corresponding “Unit Price” column. The “Bid Amount” column for each line item is an amount generated by multiplying a bidder’s Unit Price by the Quantities (determined by the Department) for each Line Number. The Bid Amount for each Line Number is then added together to generate the “Total Bid Amount” representing the bid for the entire project. Astaldi, Prince, Hubbard, and other potential bidders attended the mandatory pre-bid meeting. Prequalified contractors were given proposal documents that allowed them to enter bids through Bid Express, the electronic bidding system used by the Department. Plan revisions were issued by addenda dated May 10, 2016, and June 7, 2016. A Question and Answer Report was published and updated as inquiries were addressed. Bids were opened on the letting date of June 15, 2016. Bids for Contract T7380 were received from Astaldi, Prince, Hubbard, the DeMoya Group (“DeMoya”), Ajax Paving Industries of Florida, LLC (“Ajax”), and Cone & Graham, Inc. (“Cone & Graham”). The bids were reviewed by the Department’s contracts administration office to ensure they were timely, included a Unit Price for each line item, and contained the completed certifications required by the specifications. Bidders were checked against the Department’s list of prequalified bidders to confirm they possessed a certification of qualification in the particular work classes identified by the bid solicitation. Each bidder’s total current work under contract with the Department was examined to ensure that award of Contract T7380 would not place the bidder over its Department-designated financial capacity limit. Astaldi submitted the lowest bid, a total amount of $48,960,013. Prince submitted the next lowest bid, a total amount of $57,792,043. Hubbard’s total bid was the third lowest at $58,572,352.66. The remaining bidders came in as follows: DeMoya, $63,511,686.16; Ajax, $68,617,978.10; and Cone & Graham, $70,383,697.74. All bidders were prequalified in the appropriate work classes and had sufficient financial capacity, in accordance with section 337.14 and Florida Administrative Code Chapter 14-22. The Department’s construction procurement procedure, from authorization to advertisement through contract execution, is outlined in the Department’s “Road and Bridge Contract Procurement” document (“Contract Procurement Procedure”). The scope statement of the Contract Procurement Procedure provides: “This procedure applies to all Contracts Administration Offices responsible for advertising, letting, awarding, and executing low bid, design-bid-build, construction, and maintenance contracts.” Limited exceptions to the procedure may be made if approved by the assistant secretary for Engineering and Operations. If federal funds are included, the Federal Highway Administration division administrator, or designee, must also approve any exceptions from the procedure. The stated objectives of the Contract Procurement Procedure are: “to standardize and clarify procedures for administering low-bid, design-bid-build, construction, and maintenance contracts” and “to provide program flexibility and more rapid response time in meeting public needs.” The Department’s process for review of bids is set forth in the “Preparation of the Authorization/Official Construction Cost Estimate and Contract Bid Review Package” (“Bid Review Procedure”). The scope statement of the Bid Review Procedure states: This procedure describes the responsibilities and activities of the District and Central Estimates Offices in preparing the authorization and official construction cost estimates and bid review packages from proposal development through the bid review process. Individuals affected by this procedure include Central and District personnel involved with estimates, specifications, design, construction, contracts administration, work program, production management, federal aid, and the District Directors of Transportation Development. The Bid Review Procedure contains a definitions section that defines several terms employed by the Department to determine whether a bid or a unit item within a bid is “unbalanced.” Those terms and their definitions are as follows: Materially Unbalanced: A bid that generates reasonable doubt that award to that bidder would result in the lowest ultimate cost or, a switch in low bidder due to a quantity error. Mathematically Unbalanced: A unit price or lump sum bid that does not reflect a reasonable cost for the respective pay item, as determined by the department’s mathematically unbalanced bid algorithm. Official Estimate: Department’s official construction cost estimate used for evaluating bids received on a proposal. Significantly Unbalanced: A mathematically unbalanced bid that is 75% lower than the statistical average. Statistical Average: For a given pay item, the sum of all bids for that item plus the Department’s Official Estimate which are then divided by the total number of bids plus one. This average does not include statistical outliers as determined by the department’s unit price algorithm. For every road and construction project procurement, the Department prepares an “official estimate,” which is not necessarily the same number as the “budget estimate” found in the public bid solicitation. The Department keeps the official estimate confidential pursuant to section 337.168(1), which provides: A document or electronic file revealing the official cost estimate of the department of a project is confidential and exempt from the provisions of s. 119.07(1) until the contract for the project has been executed or until the project is no longer under active consideration. In accordance with the Bid Review Procedure, the six bids for Contract T7380 were uploaded into a Department computer system along with the Department’s official estimate. A confidential algorithm identified outlier bids that were significantly outside the average (such as penny bids) and removed them to create a “statistical average” for each pay item. Astaldi’s unit pricing was then compared to the statistical average for each item. The computer program then created an “Unbalanced Item Report,” flagging Astaldi’s “mathematically unbalanced” items, i.e., those that were above or below a confidential tolerance value from the statistical average. The unbalanced item report was then reviewed by the district design engineer for possible quantity errors. No quantity errors were found.1/ The Department then used the Unbalanced Item Report and its computer software to cull the work items down to those for which Astaldi’s unit price was 75 percent more than or below the statistical average. The Department sent Astaldi a form titled “Notice to Contractor,” which provided as follows: The Florida Department of Transportation (FDOT) has reviewed your proposal and discovered that there are bid unit prices that are mathematically unbalanced. The purpose of this notice is to inform you of the unbalanced nature of your proposal. You may not modify or amend your proposal. The explanation of the bid unit prices in your proposal set forth below was provided by ASTALDI CONSTRUCTION CORPORATION on ( ) INSERT DATE. FDOT does not guarantee advanced approval of: Alternate Traffic Control Plans (TCP), if permitted by the contract documents; Alternative means and methods of construction; Cost savings initiatives (CSI), if permitted by the contract documents. You must comply with all contractual requirements for submittals of alternative TCP, means and methods of construction, and CSI, and FDOT reserves the right to review such submittals on their merits. As provided in section 5-4 of the Standard Specifications for Road and Bridge Construction you cannot take advantage of any apparent error or omission in the plans or specifications, but will immediately notify the Engineer of such discovery. Please acknowledge receipt of this notice and confirmation of the unit bid price for the item(s) listed below by signing and returning this document. Section 5.4 of the Bid Review Procedure describes the Notice to Contractor and states: “Contracts are not considered for award until this form has been signed and successfully returned to the Department per the instruction on the form.” State estimating engineer Greg Davis testified that the stated procedure was no longer accurate and “need[s] to be corrected” for the following reason: Since the procedure was approved back in 2011, we’ve had some subsequent conversations about whether to just automatically not consider the award for those that are not signed. And since then we have decided to go ahead and just consider the contract, but we are presenting a notice, of course, unsigned and then let the technical review and contract awards committee determine. Astaldi signed and returned the Notice to Contractor and noted below each of the ten listed items: “Astaldi Construction confirms the unit price.” Mr. Davis explained that the purpose of the Notice to Contractor form is to notify the contractor that items have been identified as extremely low and to ask the contractor to confirm its understanding that in accepting the bid, the Department will not necessarily approve design changes, methods of construction, or maintenance of traffic changes. Section 6.6 of the Contract Procurement Procedure sets forth the circumstances under which an apparent low bid must be considered by the Department’s Technical Review Committee (“TRC”) and then by the Contract Awards Committee (“CAC”). Those circumstances include: single bid contracts; re-let contracts; “significantly mathematical unbalanced” bids; bids that are more than 25 percent below the Department’s estimate; 10 percent above the Department’s estimate (or 15 percent above if the estimate is under $500,000); materially unbalanced bids, irregular bids (not prepared in accordance with the Standard Specifications); other bid irregularities2/; or “[a]ny other reason deemed necessary by the chairperson.”3/ Bids that are not required to go before the TRC and CAC are referred to as “automatic qualifiers.” Because it was mathematically unbalanced, the Astaldi bid was submitted to the TRC for review at its June 28, 2016, meeting. The TRC is chaired by the Department’s contracts administration manager, Alan Autry, and is guided by a document entitled “Technical Review Committees” (“TRC Procedure”). The TRC Procedure sets forth the responsibilities of the TRC in reviewing bid analyses and making recommendations to the CAC to award or reject bids. The TRC voted to recommend awarding Contract T7380 to Astaldi. The TRC’s recommendation and supporting paperwork was referred to the CAC for its meeting on June 29, 2016. The duties of the CAC are described in a document entitled “Contracts Award Committees” (“CAC Procedure”). Pursuant to the CAC Procedure, the CAC meets approximately 14 days after a letting to assess the recommendations made by the TRC and determines by majority vote an official decision to award or reject bids. Minutes for the June 29, 2016, CAC meeting reflect 21 items before the committee including: two single bid contracts; four bids that were 10 percent or more above the official estimate; one bid that was 15 percent or more above the official estimate on a project under $500,000; three bids that were more than 25 percent below the official estimate; and 11 bids with significantly unbalanced items, including Contract T7380 with an intended awardee of Astaldi. The CAC voted to award Contract T7380 based on the low bid submitted by Astaldi. A Notice of Intent to award the contract to Astaldi was posted on June 29, 2016. As noted at Finding of Fact 2, supra, Contract T7380 consisted of seven components: structures, roadway, signage, lighting, signalization, utilities, and intelligent transportation system. The Department does not compare bids by component, but looks at the total bid amount to find the lowest bidder. The Department also reviews the bids for discrepancies in individual unit items using the process described above. Astaldi’s bid of $48,960,013 was approximately $8.8 million below Prince’s bid of $57,792,043, $9.6 million less than Hubbard’s bid of $58,572,352, and $2.7 million below the Department’s public proposal budget estimate of $51,702,729. As part of its challenge to the intended award, Prince performed a breakdown of bids by individual components and discovered that nearly all of the differences between its bid and Astaldi’s could be attributed to the utilities component. Astaldi’s bid for the utilities component was $7,811,720, which was roughly $8.5 million below Prince’s utilities bid of $16,305,903 and $5.8 million below Hubbard’s utilities bid of $13,603,846.4/ The utilities component was included pursuant to an agreement between the Department and Hillsborough County, the owner of the water and sewer lines, relating to the improvement of water and sewer lines along the roadway limits of the project. The utility work consists of installing a new water- line and force main sewer. The existing water main and the existing force main conflict with the proposed location of the new storm drainage system. The new water main and force main must be installed, tested, and approved before being put into active service. To prevent water utility outages to customers, the new system must be installed and approved before the existing waterline and existing force main can be cut off and removed. Utility work is therefore the first task to be performed on Contract T7380. Once the utility component is completed, the contractor will furnish and install the stormwater system, the roadway, the bridgework, and all other components. Article 3-1 of the Standard Specifications5/ reserves to the Department the right to delete the utility relocation work from the contract and allow the utility owner to relocate the utilities. Utilities are the only portion of a Department contract subject to deletion because the funding is provided by the utility owner, which usually has allocated a certain dollar figure to contribute towards the contract prior to the bidding. If the bid for utilities comes in over the utility owner’s budget, the owner can opt out of the contract and self-perform. In this case, Hillsborough County had contracted with the Department to contribute $8.9 million for utility relocation work. The Department did not exercise the option to delete the utilities portion of the contract. Jack Calandros, Prince’s chief executive, testified that Prince uses a computer program called HeavyBid, created and supported by a company called HCSS, to build the cost components of its bids. Every witness with industry knowledge agreed that HeavyBid is the standard program for compiling bids in the construction field. Mr. Calandros testified that cost components include material quotes provided by third-party vendors and quotes from potential subcontractors. Labor and equipment costs are ascertained by using historical rates and actual cost estimates that are tracked by the HeavyBid software. Prince maintains its own database of costs derived from 20 years’ experience. Mr. Calandros stated that Prince’s internal labor and equipment rates are checked and adjusted at least once a year to ensure they are current and accurate based on existing equipment and personnel. Prince received three vendor quotes for the materials to perform the utility work on Contract T7380. In compiling its bid, Prince ultimately relied on a final quote from Ferguson Waterworks (“Ferguson”) of $8,849,850. Based on this materials quote and Prince’s overall utilities bid of $16,305,903, Mr. Calandros opined that it would not be possible for Astaldi to perform the utilities component for its bid amount of $7.8 million. Prince’s estimating expert, John Armeni, reviewed Astaldi’s bid file, read the deposition testimony of Astaldi’s chief estimator, Ed Thornton, and spoke to Mr. Thornton by telephone. Mr. Armeni also reviewed Prince’s bid and the bid tabulation of all bidders’ utilities component line items. Based on his review and his extensive experience in the industry, Mr. Armeni concluded that Astaldi’s bid does not include all costs for labor, material, and equipment necessary to construct the utilities portion of this project. Mr. Armeni reviewed the materials quote from Ferguson that Prince used in its bid. He noted that Astaldi’s bid file contained an identical quote from Ferguson of $8.8 million for materials, including some non-utilities materials. Mr. Armeni noted that the Ferguson quote for utilities materials alone was approximately $8 million, an amount exceeding Astaldi’s entire bid for the utilities portion of the project. Mr. Armeni also noted that Astaldi’s overall bid was 18 percent below that of the second lowest bidder, Prince. He testified that 18 percent is an extraordinary spread on a bid where the Department is providing the quantities and all bidders are working off the same drawings and specifications. Mr. Armeni believed that the contracting authority “should start looking at it” when the difference between the lowest and second lowest bidder is more than 10 percent. In his deposition, Mr. Thornton testified he was not aware of how Astaldi arrived at its bid prices for the utility section of the project. Mr. Thornton indicated multiple times that he was not Astaldi’s most knowledgeable person regarding the bid submitted by Astaldi on Contract T7380 project. He testified that Astaldi intended to subcontract the utilities work and acknowledged that the company received a subcontractor quote of $14.9 million after the bids were submitted. Mr. Thornton did not know if Astaldi had solicited the quote. He said it is not unusual for a company to receive subcontractor bids after it has been named the low bidder on a project. Mr. Thornton conceded that Astaldi’s bid did not include all the costs necessary to construct the utilities portion of Contract T7380. At his deposition, he did not have before him the materials needed to determine which items of cost Astaldi had omitted. Mr. Thornton testified that Astaldi was not missing any information it needed at the time of bid submission and understood that its price was to include all labor, materials, and subcontracting costs to perform the contract. After the proposed bid award, Astaldi used HeavyBid to produce a report indicating that the company now estimates its cost of performing the contract at $53,708,129.03, or roughly $4.75 million more than its winning bid. Mr. Thornton testified that Astaldi nonetheless stood ready to execute the contract and perform the work at its bid price. Central to the dispute in this case is Standard Specifications Section 9, “Measurement and Payment,” article 9-2 of which is titled “Scope of Payments.” In particular, subarticle 9-2.1 provides: 9-2.1 Items Included in Payment: Accept the compensation as provided in the Contract as full payment for furnishing all materials and for performing all work contemplated and embraced under the Contract; also for all loss or damage arising out of the nature of the work or from the action of the elements, or from any unforeseen difficulties or obstructions which may arise or be encountered in the prosecution of the work until its final acceptance; also for all other costs incurred under the provisions of Division I. For any item of work contained in the proposal, except as might be specifically provided otherwise in the payment clause for the item, include in the Contract unit price (or lump sum price) for the pay item or items the cost of all labor, equipment, materials, tools and incidentals required for the complete item of work, including all requirements of the Section specifying such item of work, except as specially excluded from such payments. Prince contends that the second paragraph of subarticle 9-2.1 renders Astaldi’s bid nonresponsive because Astaldi admittedly failed to include “the cost of all labor, equipment, materials, tools and incidentals” in its bid. Prince points out that the “Technical Special Provisions” governing the utilities portion of the project reinforce the requirement that each bidder include all costs for the work. Technical Special Provisions Section 1-7.1 provides that “[p]ipe installation cost shall include all necessary work, equipment, and labor needed for installing the pipe, such as, coordination with existing utilities and support during construction and support of existing power poles during construction.” Technical Special Provisions Section 1-8.1 goes on to say that “[n]o separate payment will be made for the following items for work under this Technical Special Provision and the cost of such work shall be included in the applicable contract pay items of work,” followed by a comprehensive list of 30 items. Prince concludes that the requirement that each bidder include all costs, including costs of all necessary labor, equipment, and materials, in the Unit Price for each work item is “manifest” in the bid specifications and requires rejection of any bid that does not include all costs. Mr. Armeni opined that if one bidder excludes a portion of its costs, the other bidders are placed at a competitive disadvantage. Alan Autry, the Department’s central contracts administration manager, testified that five other projects were let as part of the bid package that included Contract T7380. He stated that it is typical for the Department to list multiple projects on one day. Mr. Autry’s office usually performs one bid letting per month, with the holiday months of November and December rolled together in a single letting. Mr. Autry stated that his office lets between 200 and 300 projects per year, not counting contracts that are let at the district level. Twenty other contracts were before the CAC at the June 29, 2016, meeting at which the Astaldi award in this case was approved. As noted at Finding of Fact 2, supra, Contract T7380 included 666 line items. Six companies submitted bids, meaning there were a total of 3,996 line items in this single contract. Assuming that the 200 to 300 other projects let by the Department’s Tallahassee office contain similar numbers, there are more than one million line items bid in any given year. If Prince’s reading of the bid specifications is correct, the Department is required to examine each of these line items and somehow make a determination whether the item includes all of the bidder’s costs. This problem of determining bidder cost is complicated by the presence of “companion” or “sister” items in bids, i.e., two items that must be considered in tandem to arrive at something like the actual cost of the work. Prince provided an example of such companion items in its analysis of the bids in this project. Two bid items included in the structures section of the bid proposal form were concrete culverts and reinforcing steel. The contractor may cast the culverts in place at the worksite or purchase them precast. If the concrete culvert is cast in place at the worksite, then reinforcing steel must be used to strengthen the culvert. If the concrete culvert is precast by a materials supplier, then the reinforcing steel has already been incorporated into the culvert at the time of installation. Mr. Calandros explained that when a contractor uses precast culverts, there is no need to list a separate additional cost for reinforcing steel; all costs are captured in the line item for concrete culverts. In this bid, Prince used precast culverts and therefore bid a penny per unit for reinforcing steel.6/ Bidders who cast the culverts in place showed a much higher cost for reinforcing steel but a lower cost for the concrete culverts. When the “companion items” were considered in tandem, the total cost for each vendor was fairly consistent. Prince’s explanation for companion items was coherent but did not explain how the Department is supposed to know which items are companion items as it undertakes the line-by-line cost examination of each bid in accordance with Prince’s reading of the bid specifications. Prince also failed to provide an explanation as to how the Department is to determine a bidder’s costs for any one line item or, for that matter, for its overall bid on a project. Bidders consider their cost information and the processes by which they build bids to be confidential proprietary information. In the instant case, Prince disclosed its own information (aside from materials costs) only under seal during litigation. In its ordinary course of business, the Department does not have access to this information. In fact, as noted at Finding of Fact 23, supra, the Department does not compare bids by component. It looks only at the total bid amount in determining the lowest bidder. Standard Specifications Article 3-8 reserves to the Department the right to perform an audit of the contractor’s records pertaining to the project upon execution of the contract. No authorization is provided to audit records of bidders prior to contracting. Standard Specifications Subarticle 2-5.1 allows bidders to indicate “free” or “$.00” for items that will be supplied at no cost to the Department. Though the Department’s practice, according to Mr. Autry, is to include zero bid items on the Notice to Contractor for confirmation of the price, subarticle 2-5.1 requires no Department investigation as to whether the bidder’s cost for a zero bid is actually zero. Bidders often bid a penny on items, as Prince did on reinforcing steel in this case. Standard Specifications Article 3-5 requires all contracts to be secured by a surety bond such that, in the event of a default by the contractor, the surety company will indemnify the Department on all claims and performance issues. Standard Specifications Section 4 provides that the scope of work is to be determined within the contract, including the furnishing of all labor, materials, equipment, tools, transportation, and supplies required to complete the work. The Department is authorized to make changes to the scope of work and make equitable adjustments of payments. If necessary, the Department may enter into supplemental agreements for additional or unforeseen work. Prince cautions that these change provisions could become relevant because Astaldi’s bid contains no information explaining how Astaldi will cover the $4.75 million difference between its bid price and its actual cost to perform the contract. Prince accurately states that nothing in Astaldi’s bid demonstrates that it has cash reserves to cover the loss and still complete the entire scope of the work.7/ Prince contends that this lack of demonstrable reserves renders Astaldi nonresponsible as to this project. Prince argues that it is error for the Department to rely on Astaldi’s certificate of qualification as proof of the company’s responsibility. The certificate of qualification process considers a contractor’s financial status at the time it submits its financial statements and other information regarding company resources. Prince contends that the Department’s assessment of the contractor’s financial statements and issuance of a certificate of qualification is insufficient to determine the contractor’s responsibility on a given bid. Prince argues that the Department is required by its governing statutes and the Standard Specifications to award a particular contract to the particular bidder that is the lowest, responsive, and responsible bidder, and that “responsible” for a given project is not synonymous with “prequalified.” Prince hypothesizes that under the Department’s practice, a bidder could possess a certificate of qualification issued in January, be indicted in another state for fraud and bribery in February, submit the lowest bid for a Department project in March, and be awarded the contract. By relying solely on the bidder’s certificate of qualification to determine responsibility, the Department could award a contract to a nonresponsible bidder. Section 337.14 provides that any person desiring to bid on any construction contract in excess of $250,000 must first be certified by the Department. Mr. Autry explained that the Department prequalifies contractors to submit bids on certain types of contract, such as major bridges and structures. Contractors applying for certification are required to submit their latest annual financial statements. The Department is charged with reviewing applications to determine “whether the applicant is competent, is responsible, and possesses the necessary financial resources to perform the desired work.” § 337.14(3), Fla. Stat. The Department assigns the contractor work classes and a total capacity after evaluating its experience and financials. The Department’s certificate is good for 18 months, though the contractor’s capacity is reviewed annually. At the time of a particular bid, the Department verifies the contractor’s available capacity, which is simply its total assigned capacity minus current work the contractor is performing for the Department. Mr. Autry testified that the Department does not go back and look at a bidder’s financials to determine whether it can sustain a loss on a given project. The Department does not repeat its capacity analysis during the year, regardless of how many projects the company bids on. The Department’s analysis is limited to whether the company’s current capacity is sufficient for the project on which it is bidding.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is RECOMMENDED that the Department of Transportation enter a final order dismissing Prince Contracting, LLC’s, second amended formal written protest and awarding Contract T7380 to Astaldi Construction Corporation. DONE AND ENTERED this 22nd day of December, 2016, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of December, 2016.
Findings Of Fact Sometime before January, 1989, The Department of Health and Rehabilitative Services (HRS) requested and received approval from the Department of General Services (DGS) for additional office space to provide for social services in Haines City, Florida. HRS was authorized to procure, through competitive bidding, a lease of 9041 square feet of existing office space, plus or minus 3%. Public notice that HRS was seeking competitive bids was given by advertisement in four central Florida newspapers. HRS had prepared a document entitled Invitation to Bid for Existing Facilities (ITB), which set forth in detail all of HRS' requirements. The purpose of the ITB was to inform all potential bidders of the minimum requirements for submitting a responsive bid, and the specific criteria by which the bids would be evaluated. The evaluation factors and their relative weights were stated in the ITB: Evaluation Criteria The successful bid will be that one determined to be the lowest and best. All bids will be evaluated on the award factors enumerated below: Associated Fiscal Costs Rental rates for basic term of lease. Evaluated using present value methodology by application of the present value discount rate of % (Weighting: 30) Rental rates for optional renewal of terms of lease. Rates proposed are within projected budgeting restraints of the department. (Weighting: 5) Associated moving costs i.e. furniture, equipment, telephone systems, etc. (Weighting: 0) Location Proximity of offered space in central or preferred area of map boundaries. (Weighting: 10) Frequency and availability of satisfactory public transportation within proximity of the offered space. (Weighting: 5) The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on the efficient and economical conduct of the departmental operations planned for the requested space. (Weighting: 20) Facility Susceptibility of the design of the space offered to efficient layout and good utilization. (Weighting: 20) Provision of the aggregate square footage in a single building. Proposals will be considered, but fewer points given, which offer the aggregate square footage in not more than two locations provided the facilities are immediately adjacent to or within 15 yards of each other. (Weighting: 10) TOTAL POSSIBLE 100% The bid package contained various bid specifications, bid evaluation criteria and the numerical weight assigned to each of those criteria. Specific areas of importance to Respondent in the selection of its office space were: rental rates environmental factors efficient space layout The above areas were important to HRS since the agency would render indigent services to several hundred people every month. The majority of Respondent's clients are served within a 10 day period each month. A great deal of pressure is placed on the surrounding area due to the influx of people. Because of servicing so many people, factors two and three received a great deal of weight under HRS's consideration of the property it desired to lease and occupy. All of the above areas were covered by Respondent's weighted bid evaluation criteria. Sealed bids were submitted by Intervenor, Unirealty Services, Inc. (bid A), and Petitioners, Messrs. Matthews and Walker (bid B). The bids were opened February 20, 1989, and Mr. Michael T. Akridge, former Facilities Services Manager, District VI HRS, determined both bids were responsive. At the time the Intervenors submitted their bid, they included documentation which showed that they had an option contract to purchase the subject facility, and an authorization from the optionees (two principals of Intervenors) for Unirealty to act as their agent. Both Petitioner's and Intervenor's property were within the mandatory geographical area designated in the bid package. Both bids were responsive under the minimum bid specifications and bidder qualifications. The District Administrator appointed a bid evaluation committee to review and grade the responsive bids under the criteria established in the bid package, and to recommend to him the committee's choice of lowest and best bid. The purpose in establishing the bid evaluation committee was to secure input from a cross section of people who had a variety of backgrounds and knowledge that would be material in evaluating the office space, in light of the uses for which it was intended and the relative public worth of the work space. Six individuals who were familiar with the type of work to be done in the proposed space, as well as persons familiar with the bid process were appointed to the Committee. The bid evaluation committee determined that the bid of Unirealty was the "lowest and best." The bid evaluation committee consisted of six representatives of the Department who visited each bidders' site and questioned the bidders' representatives. Each of the committee members worked with or supervised HRS programs that were to be located in the leased space. The solicitation for bids provided each bidder, among other things, with the bid evaluation criteria, a 100 point scale, which the committee used to evaluate the bids. Each committee member's evaluation scores were averaged and totaled to score Petitioners at 90.8, and Unirealty at 83.9. Each committee member gave a higher score to Unirealty. The three major bid evaluation criteria were FISCAL COSTS, LOCATION and FACILITY. Under the FISCAL COST criterion were three sub-categories: Rental Rates, Renewal Rates, and Moving Costs. For Rental Rates, Petitioners received 30 points out of 30 possible, and Unirealty got 23.1. For Renewal Rates, Petitioners got 5 out of 5 possible points, and Unirealty received 3.7 points. No points were awarded for Moving Costs. The evaluation committee did not assess points for Rental or Renewal Rates. These were scored by Michael T. Akridge, bid manager, based on a present value analysis of bidders' proposed rates. Mr. Akridge did not give the Committee the points for Rental and Renewal Rates until after they had completed their evaluations of the LOCATION and FACILITY criteria. The LOCATION criterion also had three sub-categories: Central Area-- 10 points--with both bidders receiving 9.3; Public Transportation--5 points-- which both bidders received; and, Environmental Factors--20 points--out of which Petitioners received 12.8 points and Unirealty 20 points. The Environmental Factors sub-category included building physical characteristics and surrounding area and their effect on the efficient and economical conduct of Department operations. Unirealty received a higher score than Petitioner because the committee believed its building had a better appearance, and was in better shape. The area surrounding the building was more open, while Petitioners' building was in a less desirable neighborhood with a bar or liquor store and bus station nearby which could create problems for clients because of transients. It had far more window space which creates a better work environment, and allows staff to be watchful of clients and their children outside, and the windows would be tinted. The windows at Petitioner's site were limited and no more could be added. Unirealty had more adjacent parking spaces, with handicapped parking closer to the building, and part of it was fenced which provided added protection to clients and staff. Petitioners' site had adjacent businesses whose patrons were using some of the parking spaces which the committee felt could create a problem. The Unirealty building could have an outside food stamp issuance facility which would be far more accessible to clients and to make the lobbies less crowded. It had an existing alarm system. It did not have side streets adjacent to the building, thus there would be less traffic congestion and therefore safer for clients; and, it had outside gathering areas where clients could go to smoke. Of the three sub-categories under FACILITY, Petitioners received 11.8 points out of 20 for Layout/Utilization and Unirealty received 19.7 points; for Single Building, both bidders received 10 points out of 10 possible. For the Layout/Utilization sub-category Unirealty received more points because its building configuration was more flexible and conducive to design of interior space, with less maze effect. The members of the committee each testified that it was important that the Unirealty building had no support poles to get in the way as they did in Petitioners' building. The support poles in Petitioner's building created a safety problem for clients and inhibited the location of desks and corridors. At Unirealty's site each worker could have a window, and mechanical and service areas could be put in the center of the building, with a playroom for clients' children. It provided a better restroom location near the front of Petitioner's building and lobby areas, and clients would not have to wander through work areas to get to the restrooms. Unirealty's building provided better control of clients' movements and thus better security. Members of the committee also upgraded the Unirealty building because its pitched roof was less likely to leak and its air conditioning was zoned thus providing better air quality and temperature control. At Unirealty there was better ingress and egress, and entry ways could be added. This could not be done at Petitioners' site. The Unirealty building could have different entrances for each HRS program, with separate lobbies for each program with less client congestion and better control. During the Committee members inspection of the sites they were told of an existing security alarm system already in place at the Unirealty site and were told that system would remain in place. When asked, the Petitioner's representative was unsure if his client would install a similar system at their site. A security system for the entire building was not included in the bid specifications, and it was improper for the committee to give Unirealty extra points for this unsolicited item. The proposed lease agreement calls for 9041 square feet of office space and a minimum of 66 parking spaces. Unirealty offered 72 parking spaces and Petitioner offered 75. The committee awarded more evaluation points to the Unirealty site based on future expansion capability of the building and the existing additional on-site parking spaces which were visible at the site at the time of inspection. The committee erroneously believed that the extra square footage of building space and extra parking spaces would necessarily be available to HRS if and when it might expand its offices. Future expansion was not in the bid specifications and it was clearly erroneous for them to have included this factor in their bid evaluation. The evaluation committee included the improper bid considerations in their evaluation of the Unirealty property. The two improper factors cannot be considered here. The unanimous recommendation of the evaluation committee was clearly to award the lease to the Intervenor. The evaluation committee based its decision on the scores attributed to each property on the Bid Synopsis sheet by the individual committee members. The committee utilized all the weighted bid criteria. However, two factors were of primary importance. One was its determination that the property offered by the Petitioners presented greater problems for design and flexibility due to the rectangular configuration of the building. The other consideration was that the physical characteristics of the Unirealty site and the surrounding area were considered far superior to the Petitioner's site. A close review of each evaluation sheet and the testimony of each committee member at the hearing shows that the improper factors were not so heavily weighted as to invalidate the committee recommendation. The reasons given by the individual committee members for distinguishing and preferring one bid over another were rational and reasonable considerations and were covered by the bid evaluation criteria. Each individual member gave a rational and reasonable basis for the scoring he or she used on the Bid synopsis score sheets. The scoring was done by each member after inspection of the two buildings and without influence from the other committee members. In essence, the committee felt that Intervenor's property was the better property for the money. Importantly, every committee member came to the conclusion that Intervenor's property was the lowest and best bid. There is no statutory or rule requirement that one scoring method be preferred over another. The only requirement is that the method be rational and reasonable especially where highly subjective, but legitimate criteria are involved in the selection of a piece of property. On these facts, the individual scoring methods used by individual committee members were not arbitrary and capricious, but were very rational and reasonably related to the relative importance the committee members gave the above factors. Over an eight year period the Petitioner's rental cost was significantly lower than the Intervenor's. However, it is clear the legitimate considerations of the committee were crucial enough to override awarding the lease to the lowest bidder. The conclusion that the above factors can and do outweigh price and cost considerations in these facts is not an arbitrary and capricious decision, even though others may disagree with that decision. After the committee recommendation was scored and tabulated, Mr. Akridge requested the committee chair, Ms. Gail Newell, to prepare a draft letter of the proposed bid award. This was done in collaboration with the other committee members. Mr. Michael T. Akridge then prepared the bid award letter for the signature of the Administrative Services Director based on the draft letter. In it the two improper considerations were mentioned. The authority to award the lease to Unirealty was approved on March 8, 1989, by King W. Davis, Director of General Services for HRS based on the bid award letter, dated February 26, 1989.
Recommendation Based on the foregoing, the Hearing Officer recommends that the Secretary of the Department of Health and Rehabilitative Services enter a final order awarding lease number 590:2057 to Unirealty Services, Inc., as the lowest and best bidder. DONE and ENTERED this 21st day of July, 1989, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of July, 1989. APPENDIX Petitioner's Proposed Findings of Fact: The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 12, 15, 23, 26, 27, 28, 30, 34, 38, 39 (in part), 40, 41, 42, 45, 46, 47, 48, 49, 50, 51, 53, 64, 65, 67, 69, 70, 71, 76, 77, 81, 83 (in part) are adopted in substance in so far as material. Paragraphs 14, 16, 17, 18, 21, 22, 24, 25, 29, 33, 36, 37, 73, 74, 80 are rejected as conclusions of law. Paragraphs 13, 19, 20, 44, 54, 59, 60, 61, 63, 68, 72, 75, 778, 82, are rejected as not supported by the evidence. Paragraphs 31, 32, 35, 43, 52, 55, 56, 57, 58, 62, 66 are rejected assubordinate or immaterial. Respondent's Proposed Findings of Fact: The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17 are adopted in substance in so far as they are material. Intervenor's Proposed Findings of Fact: The facts contained in paragraphs 1-17 are adopted in substance in so far as they are material. COPIES FURNISHED: Edward D. Matthews, Jr. 2405 Hideaway Court Tallahassee, Florida 32303 Gregory L. Coler Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Jack Emory Farley, Esquire HRS District VI Legal Counsel 4000 West Buffalo Avenue, Room 500 Tampa, Florida 33614 Neal A. Sivyer, Esquire Paul J. Ullom, Esquire Shackleford, Farrior, Stallings and Evans, P. A. 501 East Kennedy Boulevard Suite 1400 Tampa, Florida 33601 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Suite 407 Tallahassee, FL 32399-0700 John Miller, Esquire Department of Health and Rehabilitative Services 1323 Winewood Boulevard Building One, Suite 407 Tallahassee, FL 32399-0700
Findings Of Fact Nine bids were received for Contract E4571, Project/Job No. 99004-3516 ("E4571"). Petitioner's bid was timely received. Respondent opened bids on December 13, 1991. Respondent posted its intent to award E4571 to J & D Tropical Landscape Design on December 20, 1991. Section 1.2 of the Bid Specifications for E4571, as modified by the Special Provisions, states: A contractor's bid shall be in the form of a unit price for each unit expected to be accomplished. The Special Provisions to E4571 require each bidder to submit a single unit price for each pay item called for in the Bid Price Proposal. Item 4 in the Special "Provisions provides: It shall be the responsibility of the Contractor to submit to the Department A SINGLE unit price for each pay item called for in the Bid Price Proposal. The Contractor shall be responsible for his/her method of averaging. Failure to comply shall result in the Contractor's Bid Proposal being declared "Irregular" and such Bid Proposals will be rejected. (emphasis added) Petitioner's Bid Proposal was properly declared irregular and rejected by Respondent. Petitioner failed to comply with the requirements of Item 4 in the Special Provisions by failing to submit a single unit price for each pay item, by failing to correctly average a unit price, and by failing to state the unit price in words. The Unit Price Sheet on page 23 of the Bid Proposals contains the following table listing item numbers A582- 2 through A584-4. Petitioner listed item number A583 as follows: ITEM PLAN ITEM DESCRIPTION AND UNIT PRICE $ AMOUNTS NUMBER QUANTITIES UNIT PRICE (IN FIGURES) (Exten- (IN WORDS) sion Price) 3/ A583 4 200.000 TREES (8' TO 20, 85 20400 PLANT ' HEIGHT OR CLEAR TRUNK) @ DOLLARS CENTS The actual extension price 4/ for 200 trees at $85 per unit is $17,000 rather than the $20,400 stated by Petitioner in the table on page 23. The "Contract Total" stated by Petitioner in the bottom right corner of the table is $37,013.20. The "Contract Total" that should have been stated if Petitioner intended the extension price of item number A583-4 to be $17,000 would have been $33,613. The "Contract Total" listed by a bidder on the Unit Price Sheet is the unverified contract price. The actual contract price is determined by Respondent pursuant to the formula given in Section 1.3 of the Bid Specifications. Section 1.3 of the Bid Specifications foil E4571 states: The contract price is defined as the sum of the unit bid price times the planned work for each item as shown on the Unit Price Sheet. Petitioner would have been the lowest successful bidder irrespective of whether Respondent had replaced the extension price for item number A583-4 and the "Contract Total" stated by Petitioner with the actual extension price for item number A583-4 and the actual "Contract Total" . However, Respondent is precluded from doing so by Section 3-1 of the Standard Specifications For Road ,and Bridge Construction ("Standard Specifications"), published by the Florida Department of Transportation (1991) and by the Special Provisions for E4571. Respondent follows "Section 3-1 of the Standard Specifications for the purpose of evaluating bid proposals. Section 3-1 is used, in part, to determine the extension price for item numbers listed on the Unit Price Sheet. Section 3- 1 provides in relevant part: In the event of any discrepancy in the three entries for the price of any item, the unit price as shown in words shall govern unless the extension and the unit price shown in figures are in agreement with each other, In which case they shall govern over the unit price shown in words. Petitioner did not show the unit price in words for any item number on the Unit Price Sheet, including item number A583-4. There is a discrepancy in the three entries for item number A583-4 on the Unit Price Sheet. Petitioner failed to show the unit price for item number A583-4 in words, and the unit price and extension price are not in agreement. Under such circumstances, Respondent interprets Section 3-1 of the Standard Specifications as requiring that Petitioner's bid be declared irregular and rejected. Respondent's interpretation of Section 3-1 of the Standard Specifications is reasonable and is consistent with the mandate in Item 4 of the Special Provisions for E4571. See Finding 4, supra. Furthermore, in practice, the correct unit price of a pay item is necessary to process payment under the contract and the contractor must submit invoices based upon the pay items and unit prices listed in its bid. The bid specifications for E4571 provide that a bidder is responsible for his or her own averaging of a stated unit price, and that if a bidder fails to provide a single unit price for each pay item on the Unit Price Sheet the bid shall be declared "Irregular" and will be rejected. The requirement to provide a single unit price for each pay item was emphasized by Respondent at the mandatory pre-bid meeting. Petitioner's representative attended the mandatory pre-bid meeting. No challenges were made to the bid specifications by any bidder.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order dismissing the protest filed by Petitioner. DONE AND ORDERED in Tallahassee, Leon County, Florida, this 20th day of February, 1992. DANIEL MANRY Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (964) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of February, 1992.
Findings Of Fact The College realized that it needed a new telecommunication system about three years ago, when it began to renovate some of its buildings. On June 8, 1992, the College issued an Invitation To Bid, No. 3656, to eight vendors to replace its fifteen-year-old AT&T Dimension Private Branch Exchange (PBX) System and install a voice and data communications network among the College's four campuses. The bids were to be opened at 2:30 p.m. on July 29, 1992. The College believed replacement of the existing PBX system would result in lower operating costs, permit the system to serve more functions and permit the system to expand as the College's needs grew. Two vendors, NEC and AT & T, submitted bids. The College already has gone through two prior bids for the new PBX system, which did not result in contracts with any of the bidders. AT&T had submitted a bid in response to each of those attempts to let a contract for replacement of the College's communications system. The process of developing the bid specifications was initiated by the College's Vice President for Business Affairs, Dr. Clinton Hamilton, who asked those who would be using the communications system (the Registrar, the Learning Resources Department, the Provost, and others) to explain their needs so they could be incorporated in the new system. He also asked College employees familiar with information systems and telecommunication systems to help draft the bid documents to incorporate the functions the users desired. The College received assistance from a committee made up of representatives of the State's Department of General Services, Division of Communications; the State Department of Education; Miami Dade Community College; Nova University; and the School Board of Broward County. These groups reviewed the proposed bid specifications before each of the College's three attempts to let a contract and advised the College on them. The College made a careful effort to craft its specifications to ensure it would purchase the most appropriate communications system for its needs. The College currently has separate and independent voice and data communications systems. For data, each of the College's locations (South campus, Central campus, North campus and the College's administrative center in Fort Lauderdale) use more than one data circuit (AT&T Exhibit 5; Bid page D-1). For example, the eight controllers at the South campus are connected to the Fort Lauderdale Center by a pair of data circuits. The 15 controllers at the Central campus are linked to the Fort Lauderdale Center by four data circuits. If the controllers associated with one data circuit should go down for some reason, those connected to the other data circuits at campus will continue to operate, and the campus will only suffer "partial paralysis." The bid at issue seeks a single "voice and data T-1 network" to link each of the campuses to Fort Lauderdale Center in a unified system, which eliminates the need for separate voice and data systems. The new system is designed so that controllers at each campus will communicate with the mainframe computer at Fort Lauderdale Center through T-1 trunk lines, the same lines connecting the voice telephone system at each campus. Each campus will have its own PBX system, and the T-1 lines will allow users at each campus to place telephone calls to extensions at all campuses internally, i.e., without leaving the College's own network. They can also use the local Southern Bell network to place calls if all internal lines are in use, just as the Southern Bell network is used to place calls to numbers outside the College's campuses. Connection of the voice system (the PBX equipment) and data terminals at each of the College's three campuses to the Fort Lauderdale Center requires the use of multiplexors, devices which improve efficiency in networks by concentrating and combining signals and switching them over connecting links (i.e., the T-1 circuits) to other locations or devices. The bid solicitation document requires a multiplexor known as a "40- Series" multiplexor at each campus to perform the concentrating and combining role. The bid solicitation document also specifies a single multiplexor of a more complex type, a "45-Series" multiplexor, at the Fort Lauderdale Center. This multiplexor performs the switching function to redirect signals from one location to another. The bid solicitation document instructs bidders to supply a Comsphere 6800 Network Management System, which is a type of software to operate the hardware components. Comsphere is manufactured by a wholly owned subsidiary of AT & T, known as "AT&T Paradyne." This software manages the entire network, and allows remote troubleshooting of any problems on the network, Comsphere's system can automatically dial out to the AT&T Paradyne Center in Largo, Florida, so that a technician can investigate and often solve problems without the need to send anyone to a campus to perform maintenance. On July 7, 1992, the College held a bidders conference to explain the bid documents and their requirements, in order to insure that the bids the College received would be accurate and complete. During that conference, the vendors were told: (1) any price corrections must be initialed or the bid would be disqualified; (2) all pages of the bid documents which contain signature lines had to be signed; (3) bidders could not modify the general conditions or special conditions of the bid documents; and (4) any questions about the specifications would be answered only by written addendum. The same instructions can be found in text of the bid solicitation document (AT&T Exhibit 4). The College issued Addendum One to its bid documents on July 9, 1992, Addendum Two on July 14, 1992, and Addendum Three July 22, 1992. Addendum Two is the source of the dispute here. As is the College's practice, all bids were opened publicly after the hour for the receipt of bids had passed on July 29, 1992. Each bid submission had two parts. The first was a bid summary sheet containing a required format for the vendor's price. The second part of the submissions were bound volumes explaining how the vendor would satisfy each of the specific requirements in the bid specifications. During the bid opening, a College employee opened the sealed envelopes containing the vendor's bid summary sheet, and read aloud the prices found on each bidder's summary sheet. Page 13, paragraph 19.6 of the Bid Specifications told bidders that the bid summary sheets must recite the total bid price for the entire system, which had to include any upgrades to the standard features of the vendor's equipment so that the equipment provided would meet the College's specifications. When the bids were opened, representatives of AT & T, AT&T Paradyne, and NEC were present. As the bid summary sheets were opened and the prices announced, no one from AT&T objected to the prices read out or contended there was an error in AT&T'S pricing. The College's Director of Purchasing, Janet Rickenbacker, and the senior buyer handling the acquisition, Susan Kuzenka, then reviewed the extensive responses to the specifications submitted by the two bidders. They determined that NEC was the low responsive bidder. The amount AT&T bid based on the bid summary sheet found in its sealed bid was $1,558,836.57, NEC's bid was $1,549,895.15. 1/ After the bid opening, Mr. Zinn of AT&T had two conversations with Ms. Kuzenka about the AT&T bid. These conversations focused on the conflict in the entry for system maintenance on the bid summary sheet for AT&T which had been opened and read aloud on July 22, 1992, and the backup data for the system maintenance figure found in a section of AT&T'S bid response documents. On the bid summary page, AT&T had listed its "four-year maintenance totals M[onday] through F[riday] 8 a.m. through 5 p.m." as $755,536.16. But on page 53 of its bound bid response, AT&T listed the "total maintenance" cost as $530,204.00. This lesser figure is consistent with other maintenance price information found on page 61 of the AT&T bound bid documents, which set out total monthly maintenance costs for Monday through Friday maintenance from 8:00 a.m. to 5:00 p.m. for all four college locations as $11,045.92 per month. If this monthly figure is multiplied by the maintenance term (48 months) the sum is the $530,204.00 shown on page 53. During his first conversation, however, Mr. Zinn told Ms. Kuzenka that the higher figure of $755,536.16 was correct, because AT&T had neglected to add in the maintenance for the AT&T Paradyne multiplexor in the entries in the bound bid documents at pages 53 and 61. During a second conversation, Mr. Zinn reversed his position and indicated that he had added the maintenance for the multiplexor twice, which resulted in an erroneously high figure of $755,536.16 on the bid summary sheet, and that the $530,204 figure on page 53 was correct. One week after the bid opening, on August 5, 1992, AT&T sent a fax letter to Ms. Kuzenka, which confirmed Mr. Zinn's second conversation, and stated that the correct maintenance price was the $530,204.00 found on page 53 of the AT&T bid, rather than the $755,536.16 figure found on its bid summary sheet. Ms. Kuzenka had not asked anyone from AT&T to submit this price change to its bid, and it was not accepted by the College, under its standard policy that price changes will not be accepted once a sealed bid has been received and opened. The College has consistently adhered to this practice through the entire term of Ms. Kuzenka's employment. While a lower maintenance price can be found in one portion of the voluminous response of AT&T to the Bid Specifications, the figure on the bid summary sheet controls. See the "Special Instructions" found at page 5 of the bid solicitation documents (AT&T Exhibit 4). A bidder should not be permitted to look for ambiguities in the supporting documentation to contradict clear entries of price components found on its bid summary sheet. Use of the bid summary sheet permits the College to rely on a specific portion of the bid submission, which will be comparable from bidder to bidder, and to avoid wading through voluminous and perhaps internally inconsistent submissions to try to determine exactly what the bidder's price is. The "Special Instructions" state: "Bidder must use bid pages provided by the College and submit bid in the order issued; failure to do so will result in rejection of your bid" (AT&T'S Exhibit 4). Over and above the maintenance price differential, the College staff found the submission by AT&T to be materially non-responsive to the Invitation to Bid. Ms. Kuzenka found five problems with the AT&T submission, which led her to conclude that the response submitted by AT&T failed to meet the bid specifications: (1) AT&T qualified or modified the terms and conditions of the specifications; (2) price corrections were not initialed by AT & T; (3) the maintenance contract was partially assigned to another vendor; (4) the bid was not signed by AT&T on all pages which have required signature lines; and (5) AT&T failed to provide a qualification statement. Modification of terms and conditions The College's bid document stated in paragraph 54.1 that the terms and conditions of the bid and purchase order constitute the contract and "no other terms and conditions apply" (Tr. 157). The maintenance agreement, titled "Product Agreement," which is appended to the AT&T Service Offerings and Support Plan is a standard AT&T form (College Exhibit 6). It contains a provision in paragraph 20G., which states "THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LOCAL LAWS OF THE STATE OF NEW JERSEY" (emphasis in original). The general conditions of the bid required that the contract be governed by Florida law (Tr. 152). AT&T argues that the standard product agreement it attached to its bid response had not been signed by a representative of AT & T, and that the College had the right to accept or reject the terms of the Service Offerings and Support Plans and the attachments to it. This is true, but the inclusion in its bid response of the New Jersey choice of law provision certainly creates an ambiguity over the applicable law, if AT&T'S bid were accepted. This ambiguity would be completely avoided had it not been proposed by AT & T, in contravention of the bid's general conditions. Paragraph 2 of the Product Agreement states "Terms and conditions on any non-AT&T order form shall not apply." Fairly read, AT&T was attempting to have its duties under its standard Product Agreement governed by the laws of New Jersey, not the laws of Florida. As a matter of sovereignty, Florida agencies do not subject themselves to foreign law. The College acted within its legitimate range of discretion when it rejected the choice of law provision as inconsistent with its bid documents. The same problem is caused by similar language in paragraph 12F of the AT&T Service Agreement (College Exhibit 5). The AT&T Product Agreement also has an integration clause, Paragraph 20H, stating that it constitutes the entire agreement of the parties, and supersedes any other oral or written agreements. This provision also attempts to modify the terms and conditions of the bid specifications to give the terms of AT &T's Service Offerings and Support Plan priority over the specifications. The College was entitled to reject this as inconsistent with the bid specifications. The same problem is presented by similar language in paragraph 12G of the AT&T Service Agreement (College Exhibit 5). The Service Offerings and Support Plan also contained a provision allowing AT&T to assign the agreement, which violates the anti-assignment provisions of paragraph 56.1 of the bid specifications. AT&T'S bid response stated that the College would be required to pay the cost for installing any additional cable. The bid specifications required vendors to inspect existing facilities at the College during a pre-bid walk- through, so that bidders could determine whatever cabling would be needed, and incorporate all necessary cable in their bid price. AT&T'S attempt to make the College liable for any cabling over and above that estimated by AT&T when submitting its bid is inconsistent with the bid specifications. The AT&T submission includeds a statement that the College was obligated to pay for the cost of a site survey to be performed by the project manager before the execution of the contract. Yet a site survey had already been performed, and the bidder's price was to have been inclusive of a total system, with no additional cost to the College for items such as surveys. Finally, the AT&T Service Offerings and Support Plan required the College to provide, at the College's expense, a secured and protected area for storage of tools and equipment near the equipment room, which was not part of the bid specifications. At the walk-through, AT&T should have determined whatever its security needs were and included those costs in its bid price. In essence, AT&T submitted preprinted forms without tailoring them to the carefully crafted requirements of the College's bid specifications. It cannot now disavow the contents of its forms which violate or fail to conform to these specifications. The time to review the company's standard forms was before they were submitted in its bid response, not afterward. Price correction There is a price correction on page 48 of the AT&T bid which is not initialed. The bid specifications require that "all corrections, manual or written or white-out must be initialed by the person signing the bid" (Bid Specifications, page 63, paragraph C). This was not done. The specifications stated "Failure to initial price corrections will result in the rejection of your bid" (AT&T Exhibit 4, page 5, numbered paragraph 2). Assignment provisions There was also confusion in the AT&T bid arising from the attachment of two proposed maintenance agreements, one from AT&T itself, another from AT&T Paradyne. The two maintenance contracts are not identical. 2/ College personnel believed that one contract was for part of the equipment, while the other contract was for another block of equipment. The College had been concerned about the difficulty in having to deal with different companies; it had drawn its specifications so that the bidder would be the single entity responsible to the College for maintenance. The submission of a proposed maintenance contract from an entity other than the bidder was inconsistent with the bid specifications. Signature Not all pages with signature lines had been signed by AT&T'S representative. These included page D1, which had a bearing on the equipment allowance being provided for the existing system traded in by the College. While AT&T regards these failures as trivial, the College went to pains to require bidders to sign pages with signature lines. Page 5 of the Bid Specifications stated: "Failure to sign all pages with a signature line will result in the rejection of your bid" (AT&T Exhibit 4, page 5, numbered paragraph 3). It is not arbitrary for the College to insist that these requirements be followed or to enforce the penalty stated in the specifications. Qualifications statement The special conditions for the bid required that vendors submit a qualifications statement listing similar work done for others (Tr. 168; Bid Specifications Section 25.1 at page 25). The College intended to consult those listed to determine whether they were satisfied with the equipment the vendor installed and the service it provided. AT&T did not provide that list, but rather provided an annual report which contains no customer references. This was not responsive to the bid. The College had experience with AT&T'S fifteen- year-old Dimension system, but not with the new equipment AT&T bid. The failure to submit the qualifications statement deprived the College of the opportunity to check with entities which had purchased the equipment AT&T had bid, something it had been careful to require of bidders. Deciding how to treat these inadequacies is a matter of discretion. Staff recommended rejection of the AT&T bid for genuine instances of noncompliance with specific requirements of the bid specifications the College had carefully crafted. This action cannot be characterized as arbitrary. The College's decision The College's purchasing department recommended to Dr. Hamilton that the bid be awarded to NEC as the low responsive bidder. A bid tabulation was posted on August 7, 1992, awarding the contract to NEC and rejecting AT&T'S bid. The protest AT&T filed a Notice of Protest, and later a Formal Written Protest on August 18, 1992, which dealt with a number of technical aspects, but did not claim that NEC's rival submission failed to conform to the bid specifications. Dr. Hamilton advised the College's president that, to be fair to both bidders, an outside consultant should be retained to evaluate the issues raised by AT&T in its Formal Written Protest. This was done, and the College retained Technology Associates for $8,600 to report to the College on the issues raised by AT & T. Technology Associates found that AT&T did not meet the emergency 911 requirements outlined in the College's bid documents. Southern Bell requires that when 911 calls are made from the College, the telephone system be capable of identifying to the police dispatcher which campus, which room and which extension number originated the emergency 911 call. The consultant also found that NEC's system met this requirement. AT&T did not attempt to refute this determination at the final hearing. The consultant found that AT&T'S proposed system was "over designed," in that it included elements not required by the bid documents. AT&T argues that Addendum Two, issued on July 14, 1992, 14 days before the bid opening, was so ambiguous with respect to necessary redundancy that the two bidders were bidding on fundamentally different systems, so that the matter should be bid for a fourth time. The portion of the addendum at issue states: The College requires two additional T-1 lines; not one as previously stated, to be added to diagram D-2 to ensure redundancy. A T-1 line is to connect North Campus with Central Campus and an additional T-1 line is to connect Central Campus with South Campus. (Tr. 85) Addendum Two explains that these lines are required to "ensure the ability to redirect calls if required, enabling the system to be fully redundant" (Tr. 86- 87, emphasis added). The addendum directed only the addition of two T-1 lines. This can be done, as NEC proposed, by connecting additional T-1 lines, one from the PBX at the North Campus to the PBX at the Central Campus and the other from the PBX at the Central Campus to the PBX at the South Campus. AT&T chose to feed each of the PBX installations at the North Campus, Central Campus and South Campus first into its own additional 45-Series multiplexor (the complex multiplexor, see Finding 10 above) so that a 45-Series multiplexor will handle T-1 connections from North Campus to a 45-Series multiplexor at Fort Lauderdale center, and to a 45-Series multiplexor at Central Campus. The PBX at Central Campus, because it has its own 45-Series multiplexor, then can be connected by T-1 lines to the 45- Series multiplexors at North Campus, South Campus and Fort Lauderdale Center. The PBX at South Campus, through its 45-Series multiplexor, then can connect to the 45-Series multiplexors at Central Campus and Fort Lauderdale Center (this configuration is shown on the final page of AT&T Exhibit 5). This is a more complex way to provide the T-1 connections between North and Central Campus and Central and South Campus than the addendum required, and uses four 45-Series multiplexors rather then one. AT&T argues its more complex solution was necessary so that both voice and data systems would be redundant, thus meeting the requirement in the addendum that the system be "fully redundant." The problem with the approach taken by AT&T is that it fails to follow the language of Addendum Two. There is no reference to alternative routing or redundancy for data, the redundancy is required to redirect calls, i.e., PBX or voice components. See the final quotation in Finding 40, above. Redundancy for data transmissions, something the AT&T solution provides, was not required. AT&T'S solution is overdesigned. This is not a pivotal issue, however, because for the reasons stated in the foregoing findings, the submission by AT&T was properly rejected by College staff as non-responsive to the terms of the Invitation to Bid. NEC is the low responsive bidder. Software certification AT&T argues in pages 16 through 20 of its proposed recommended order that the bid of NEC fails to conform to the requirements of the Invitation to Bid. AT&T had not raised the issue of whether the bid of NEC was responsive in its Formal Written Protest, and the attempt to do so at the beginning of the final hearing was rejected. As a result, this is not an issue which should have been addressed in the proposed recommended order. Nonetheless, it may be easily disposed of. The bid documents require that each bidder provide the College with a certification that the bidder: [O]wns, leases or controls the software it offers in response to this bid. If the bidder does not own the software, their certificate must include the source from which the software shall be obtained, and that the bidder has a right to sell or lease this software (Bid Specifications at 26, AT&T Exhibit 4.) The bidder also must certify that it is "eligible to maintain and support the software." (Id.) In its certification, NEC stated: NEC is the manufacturer of the NEAX2400 IMS that has been proposed to Broward Community College. As the manufacturer, we developed all software utilized on the NEAX2400. NEC owns all the rights to the software and has over 600 software engineers in Dallas dedicated to maintain and support the software. (AT&T Exhibit 4, final page) AT&T objects that this certification goes only to NEC's hardware, and does not constitute a certification that NEC has the rights to convey to the College the software necessary to operate the Comsphere 6800 Network Management System, which is a product of AT&T Paradyne. When reviewing the submissions of both bidders, the College staff found that their software certifications were equivalent. Both companies certified that they had the right to sell the software to operate the system each offered to the College. The College is entitled to rely on the certification given to it by NEC. If NEC is wrong, and does not have the right to provide the necessary software because AT&T or AT&T Paradyne will refuse to permit it to use that software, NEC may be liable in damages for failure to meet its contractual obligations to the College. NEC did not offer at the hearing evidence on why it believes it is entitled to use the software for the Comsphere 6800 Network Management System, because AT&T's attempt to raise this issue had been rejected when AT&T's motion to amend its Formal Written Protest of August 18, 1992 was denied.
Recommendation It is RECOMMENDED that a final order be entered by the Board of Trustees of Broward Community College awarding Bid No. 3656, the rebid of the College-wide PBX system, to NEC for a bid price of $1,549,895.15. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of March 1993. WILLIAM R. DORSEY, JR. 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 9th day of March 1993.
