The Issue The Department of Corrections sought bids for construction of a health services building for a correctional facility. A discrepancy existed between the written specifications and the architectural drawings for the project. An addendum was issued to clarify the matter. The low bidder (Intervenor) did not acknowledge receipt of the addendum until several hours after the opening of bids. The Department accepted the Intervenor's bid. The Petitioner timely protested the action. The issue in this case is whether, in accepting the Intervenor's bid, the Department acted contrary to the requirements of law.
Findings Of Fact On July 31, 1990, the Department of Corrections (hereinafter "Department") issued an Invitation To Bid ("ITB") for PR-35-JRA, Project #90015, consisting of the construction of a Health Classification Building at the Columbia County Correctional Institution. In relevant part, the ITB requested price proposals for said construction, provided that the bid would be awarded to the responsive bidder submitting the lowest cost proposal, provided that "in the interest" of the Department, "any informality" in bids could be waived, and provided space on the bid form for acknowledgment of receipt of all addenda to the ITB. Bids were to be filed no later than 2:00 p.m. on September 11, 1990, the time scheduled for bid opening. Documents issued with the ITB included architectural drawings and written specifications for the building. The architectural firm of Jim Roberson and Associates, (hereinafter "JRA") had been employed by the Department to prepare the drawings and specifications. JRA was responsible for preparation and distribution of related addenda. Further, a JRA representative presided over the opening of bids on behalf of the Department. Following release of the ITB and supporting documents, JRA became aware of a conflict between sink faucets required by the drawings and those required by the written specifications. The specifications provided that sink faucets operated by hand levers or foot pedals were to be installed in the facility. The architectural drawings JRA indicated that sink faucets were to operate by means of "electric-eye" activators, rather than by hand levers or foot pedals. On September 10, 1990, JRA issued an addendum (identified as Addendum #2) 1/ to clarify that "electric-eye" type operators were to be included in the bids. The addendum was sent by telephone facsimile machine to all anticipated bidders. In part the addendum provides as follows: "This Addendum forms a part of the Contract Documents and modifies the original Specifications and Drawings, dated 31 July 1990, as noted below. Acknowledge receipt of this Addendum in the space provided on the Bid Form. Failure to do so may subject the Bidder to Disqualification." On September 11, 1990, the eight bids submitted in response to the ITB were opened by the JRA representative. The Intervenor, Custom Construction (hereinafter "Custom"), submitted the lowest bid at $898,898. The Petitioner, David Nixon (hereinafter "Nixon"), submitted the next lowest bid at $900,000. The bid form provided by the Department as part of the ITB materials to prospective bidders provided space for acknowledgment of addenda to the ITB documents. Upon opening the bid submitted by Custom, the JRA representative officiating at the opening noted that the Custom bid failed to acknowledge Addendum #2 in the appropriate space on the bid form. 2/ Robert L. Harris, president of Custom Construction, attended the bid opening. When the JRA representative noted the lack of acknowledgment of Addendum #2, Mr. Harris stated that he was unaware of the addendum. At hearing, Mr. Harris testified that his secretary told him that Addendum #2 was not received by his office. The JRA representative testified that his review of JRA's FAX transmission records indicated that the FAXed Addendum #2 was received by all bidders. The greater weight of the evidence establishes that Addendum #2 was transmitted to and received by, all bidders. Upon leaving the bid opening, Mr. Harris immediately contacted his plumbing subcontractor, Jerry Stratyon, and discussed the situation. Approximately two hours after the bid opening, and after talking with Mr. Stratton, Mr. Harris notified JRA, in a letter transmitted by FAX machine to JRA, that his bid price did include plumbing fixtures required by Addendum #2. Mr. Harris concluded the letter, "[w]hen can we start work. I know you don't want the alternate." On October 8, 1990, JRA recommended to the Department, that the Custom bid be accepted. The letter of recommendation, in part, provides: The apparent low bidder however, did not verify receipt of Addendum No. 2 on the Bid Proposal. Our office did receive a, facsimile after the bid verifying Addendum NO. 2 receipt from the Contractor's Office." However, the actual letter from Custom to JRA states, not that Addendum #2 was received, but that it was included in the price bid by Custom's plumbing subcontractor. Both Nixon and Custom obtained plumbing bids from the same subcontractor, Jerry Stratton. The cost increase attendant to the requirements of Addendum #2 is approximately $2,400 over the plumbing fixtures indicated in the written project specifications. Mr. Stratton was aware of Addendum #2 and testified that the requirements of Addendum #2 were reflected in his price quotes to both bidders. Mr. Stratton provided the same price bid to Nixon and Custom. Mr. Stratton also provided bids to Nixon and Custom for HVAC work. Mr. Stratton was accepted as Custom's HVAC subcontractor. Nixon's bid indicates that another HVAC subcontractor will perform the cork should Nixon receive the contract. The ITB provided that bid modification or withdrawal was permitted on written or telegraphic request received from a bidder prior to the time fixed for opening. Mr. Harris did not attempt to either withdraw or modify Custom's bid prior to bid opening. No bid modification was permitted subsequent to the bid opening. The Department's policy is to waive minor irregularities when to do so would be in the best interests of the State and would not be unfair to other bidders. The evidence does not establish that Custom Construction's failure to acknowledge the addendum was purposefully designed to permit withdrawal of their bid subsequent to the public bid opening. The omission of acknowledgment of Addendum #2 provided Custom an opportunity to withdraw the bid that was not available to other bidders. Custom could have informed the Department that the bid price did not include the requirements of Addendum #2, and the bid could have been withdrawn. Custom was therefore provided with a substantial advantage or benefit not enjoyed by the other bidders. The other bidders, all of whom acknowledged receipt of Addendum #2, had no opportunity to, and would not have been permitted to, withdraw their aids. The fact that Custom did not withdraw the bid is irrelevant.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Department of Corrections enter a Final Order rejecting the bid submitted by Intervenor as nonresponsive and awarding the contract to the Petitioner. DONE and RECOMMENDED this 15th day of January, 1991, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of January, 1991.
The Issue Whether Respondent properly rejected Petitioner's bid on the grounds that the bid did not meet a fatal item requirement.
Findings Of Fact On April 24, 1992, Respondent published a Request for Proposals (RFP) for the provision of housekeeping services to South Florida State Hospital. Attached to the RFP as Appendix I was a blank copy of Respondent's "Standard Contract" which is also referred to as its "core model contract". Paragraph 1.a. of Section D of the RFP contains the following instructions to bidders: BIDDER RESPONSE a. State of Florida Request for Proposal Contractual Services Acknowledgment Form, Pur 7033 The State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, Appendix II must be signed and returned ... with the proposal or submitted by itself if you choose not to submit a proposal and wish to remain on the department's active vendor list. Paragraph 1.g. of Section D of the RFP, contains the following instructions to bidders: Required Bidders Certification Contract Terms and Conditions The proposal must include a signed statement in response to the RFP indicating acceptance of the terms and conditions of provisions of service as specified in the RFP and contained in the core model contract. Bidders were provided a copy of the RFP rating sheet which contained the following under the heading of Fatal Items: The following criteria must be met in order for the proposal to be considered for evaluation, failure to receive a "Yes" response for any time [item] will result in automatic rejection of the proposal. * * * Does the proposal include a statement agreeing to terms and conditions set forth in the core model contract and the RFP? Petitioner was represented at a "Bidders' Conference" held May 15, 1992, at which the fatal items were discussed. Bidders were advised that it would be necessary for the responses to contain a statement agreeing to the terms and conditions set forth in the core model contract. The State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, contains the following certification: I certify that this proposal is made without prior understanding, agreement, or connection with any corporation, firm, or person submitting a proposal for the same contractual services, and is in all respects fair and without collusion or fraud. I agree to abide by all conditions of this proposal and certify that I am authorized to sign this proposal for the proposer and that the proposer is in compliance with all requirements of the Request for Proposal, including but not limited to, certification requirements. In submitting a proposal to an agency for the State of Florida, the proposer offers and agrees that if the proposal is accepted, the proposer will convey, sell, assign or transfer to the State of Florida all rights, title and interest in and to all causes of action it may now or hereafter acquire under the Anti-trust laws of the United States and the State of Florida for price fixing relating to the particular commodities or services purchased or acquired by the State of Florida. At the State's discretion, such assignment shall be made and become effective at the time the purchasing agency tenders final payment to the proposer. The State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, was signed by Richard A. Cosby on behalf of Petitioner and submitted as part of Petitioner's response to the RFP. Upon receipt of all responses, Respondent convened an evaluation committee to evaluate the responses. The evaluation committee determined that the response submitted by Petitioner did not contain the required statement agreeing to the terms and conditions set forth in the core model contract and the RFP. Consequently, the evaluation committee rejected Petitioner's proposal from further consideration. Petitioner does not challenge the specifications of the RFP, but, instead, asserts that Mr. Cosby's execution of the State of Florida Request for Proposal, Contractual Services Acknowledgment Form, PUR 7033, was sufficient to meet the requirement the evaluation committee found lacking. The language of the Contractual Services Acknowledgment Form, PUR 7033, that most closely approximates the certification that the bidder accepts the terms and conditions set forth in the core model contract and of the RFP is as follows: I agree to abide by all conditions of this proposal and certify that I am authorized to sign this proposal for the proposer and that the proposer is in compliance with all requirements of the Request for Proposal, including but not limited to, certification requirements. The proposal submitted by Petitioner did not contain any other statement which could be construed as accepting the terms and conditions set forth in the core model contract and the RFP. The broad language of the Contractual Services Acknowledgment Form, PUR 7033, upon which Petitioner relies does not state that the bidder accepts the terms and conditions set forth in the core model contract and the RFP. The evaluation committee properly determined that Petitioner's response failed to meet this fatal item. In this proceeding, there was evidence that the Respondent routinely inserts in its Request for Proposals the fatal item requirement that the bidders agree in writing to accept the terms and conditions set forth in the core model contract and the RFP, and that Respondent has never waived that fatal item requirement. There was no evidence that Respondent was using this fatal item requirement to discriminate against or in favor of any bidder.
Recommendation Based upon the foregoing findings of fact and conclusion of law, it is hereby RECOMMENDED that the Respondent dismiss Petitioner's bid protest. DONE AND ENTERED this 18th day of August, 1992, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of August, 1992. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 92-4311BID The following rulings are made on the proposed findings of fact submitted on behalf of the Petitioner. 1. The proposed findings of fact submitted by Petitioner are accepted in material part by the Recommended Order. Petitioner's conclusions based on those facts are rejected for the reasons discussed in the Recommended Order. The following rulings are made on the proposed findings of fact submitted on behalf of the Respondent. 1. The proposed findings of fact submitted by Respondent are adopted in material part by the Recommended Order. COPIES FURNISHED: Richard A. Cosby, Vice President National Cleaning of Florida, Inc. 1101 Holland Drive, #32 Boca Raton, Florida 33487 Colleen A. Donahue, Esquire District 10 Legal Office Room 513 201 West Broward Boulevard Fort Lauderdale, Florida 33301-1885 Sam Power, Agency Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Slye, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
The Issue The ultimate issue for determination is whether the School Board's proposed award of a construction contract to Federal Construction Company is fraudulent, arbitrary, illegal or dishonest. See Department of Transportation v. Groves- Watkins Constructors, 530 So.2d 912 (Fla. 1988). Also at issue is whether Gulf, as fifth lowest bidder, has standing to bring this action and, if so, whether it is entitled to award of the contract. STIPULATED FACTS In their Prehearing statement, filed on December 13, 1988, the parties have stipulated to the following facts: The SCHOOL BOARD placed [sic] for bids pursuant to bid documents on elementary school project known as "Elementary School "E". At a Pre-Bid Meeting on September 27 the bidders were told that the subcontractor's list must list one and only one subcontractor per item and include all subcontractors with no open blanks. If the general contractor was going to list himself as doing that particular piece of work he must so indicate. Bids were submitted to the SCHOOL BOARD on October 13, 1988, by six general contractors with the lowest bid being submitted by FEDERAL followed by PHILLIPS, INDUS, BARTON-MALOW and GULF. Required to be attached to each bid was a Bid Bond, Unit Price List, and List of Subcontractors. The List of Subcontractors Form required the bidder to list the names of subcontractors and suppliers who would perform the phases of the work indicated with the assumption that any work item (trade) not included would be performed by the Bidder's own forces. The lowest bidder, FEDERAL, left some of the items of work blank or had a horizontal line drawn beside them. FEDERAL's bid bond did not contain a penal sum and the Power of Attorney did not contain an original signature, but had a typed in date October 13, 1988 next to the copy of the signature. No Power of Attorney was filed in the Public Records of Sarasota County PHILLIPS' bid listed no subcontractors for any work items. INDUS' bid materially deviated in that it did not agree to complete the work in the time specified, left some work items blank on the subcontractor's list and listed itself as doing work items not normally done by a general contractor. BARTON-MALOW'S bid listed a steel supplier who did not bid the project to BARTON-MALOW and the bid bond was not on the specified form. GULF's bid was in conformance with the bid documents. On October 20, 1988, the SCHOOL BOARD Construction Staff recommended to the SCHOOL BOARD that the FEDERAL bid be accepted and that the contract be awarded to FEDERAL.
Findings Of Fact The bid specifications and related items for construction of Sarasota County School Board's Elementary School "E" and bus depot are dated July 1, 1988. (Joint Exhibit #1.) The Invitation for Sealed Bids was advertised on September 4, 11 and 18, 1988. Among the requirements included in the instructions to the invitation for sealed bids is the direction that each bid must be accompanied by a bid bond, written on the form satisfactory to the Board, or a cashier's check in the amount of five percent of the total base bid as a guarantee that, if successful, the bidder would enter into a written contract with the Board. (Joint Exhibit #1, P.C-1.300.) The instruction also includes the requirement that if a bid bond is submitted it must be "...written on the form bound within these bidding documents...". (Joint Exhibit #1, P.C-1.600.) Among other specifics related to the bond are the requirements that the dollar amount of the bond, or "5 percent of the bid", be typed or printed in the space provided, and that the surety's agent's power of attorney either be recorded in Sarasota County or include an original signature. (Joint Exhibit #1, P.C- 1.610.) Two addenda were issued to the July 1, 1988 bid specifications. Addendum No. 1 is dated September 30, 1988, and includes a revised bid form and list of subcontractors form. The material change in the list of subcontractors form was to delete language at the end of the form allowing changes or substitutions with written consent of the architect and owner prior to signing the agreement, and substituting this language: "The contractor shall not remove or replace subcontractors listed above except upon good cause shown and written approval by Owner". (Joint Exhibit #1, P.C-2.430.) Both the revised and former subcontractor list provide "Any work item (trade) not included will be assumed by the Owner as being performed by the Bidder's own forces". (Joint Exhibit #1, p.C-2.400.) A mandatory pre-bid conference was held on September 27, 1988. In order to have a valid bid proposal, all bidding contractors had to attend the conference. Gulf, Federal and the other bidders had representatives at the conference. Charles Collins, the School Board project manager, also attended and reviewed the specifications. He reminded the conference participants that the subcontractors list must be included with the bid and that one and only one subcontractor could be listed for each item. He also told the participants that if the contractor was going to do a particular item, he had to so indicate. He said that any deviation would result in the bid being rejected. (Transcript pp.316,319.) The bids were submitted and opened on October 13 1988. Six bids were received, with the following totals for both the school and bus depot: Federal $7,243,000.00 Phillips $7,322,155.00 Indus $7,390,000.00 Barton-Malow $7,398,000.00 Gulf $7,448,000.00 Carlson (amount not included in the record -- the highest bidder) (Joint Exhibits #2,3,4,5 and 6) The immediate reaction of Charles Collins and other School Board staff was that the lowest bid, Federal, was a very sloppy bid. There were problems, in fact, with the four lowest of the six bids. (Transcript pp.215 and 324.) Federal's bid bond was on the proper form, but the penal sum space was left blank. In addition, the power of attorney signature was not an original, but was rather part of the printed form. There was no power of attorney for its surety, American Home Assurance Company, on record in Sarasota County. The list of subcontractors form required by the School Board is divided into two columns. The first column lists the work item and in some cases, includes subcategories, such as "supplier", "installer", "manufacturer", "dealer/contractor", and similar designations. For some work items more than one, and as many as three, separate subcategories are included, indicating the need to fill in more than one blank for that work item. The heading over the second column is titled "Subcontractor or Material Supplier". The bidder is supposed to write in the space in this column the subcontractor or supplier for each of the work items and subcategories listed in the first column. Federal's list of subcontractors had either blank spaces or a line drawn in the second column for approximately twenty-two work items or subcategories under the work items. In several cases a single name was listed only once next to the work item, even though there were several subcategories under that item. For example, under the work item, "Pre-Engineered Metal Roof System", are three subcategories: "Manufacturer", "Dealer/Contractor (Supplier)" and "Erector". Federal has handwritten one name next to the "Dealer/Contractor (Supplier)" subcategory: "Hammer & Howell". (Joint Exhibit #3.) Dr. Melvin Pettit is the School Board's director of facilities and is responsible for the bidding process and construction of new schools. He is Charles Collins' supervisor. After the bid opening, Dr. Pettit and his other staff met with the bidders individually to make sure they understood the bid. Gulf's bid was very complete and there was not that much to interpret. (Transcript p.217.) Federal's bid was not complete and needed considerable explanation. Dr. Pettit took notes of the explanations on his copy of Federal's bid form. (Joint Exhibit #10.) Federal drew a line next to the work item "site concrete work" because it intended to do than work itself. Although it listed "United" only once for the two subcategories under "Sanitary Sewer Lift Station", it intended that United be both the supplier and installer. Under the work item, "Termite control", Federal drew a line because it did not have a bid or a subcontractor to list. "Underground Fuel Tanks (Bus Depot) and Accessories" with two subcategories, "Supplier" and "Installer", were left blank. Federal intended that J. H. Pump Services do the work, as they were also doing the fuel dispensing equipment, a separate work item on another page of the form. No supplier nor installer was listed under "Concrete Work" because the Federal representative could not remember the supplier's name when the bid was prepared. Federal had quotations for the "Chalkboard and tackboard" work item, but did not list a supplier. They also had quotations for the specialty signs but did not list a supplier for that work item. No subcontractor was listed under the work item, "Waste Handling Equipment"; Federal intended to use the same subcontractor for that and a separate item, "Food Service Equipment". For the separate items, "Dark Room Equipment" and "Library Equipment", no supplier was listed. Federal explained that it had quotes but did not list them because of the rush of bidding. No subcontractor nor supplier was listed for the separate items, "Intercommunications System" or "Public Address System". Federal explained that it intended to use the same subcontractor as that indicated for the electrical work because these items were included in the electrician's bid. For those items including separate subcategories, where only one name is listed, Federal intended in most cases to use the same firm for all subcategories. However, for the roof system example cited in paragraph #9, above, Federal assumed that Hammer and Howell would supply and erect a roof manufactured by Butler. In other words, Hammer and Howell would not also be the manufacturer of the system. The bid specifications list approved manufacturers, and Hammer and Howell is not one of them, nor were they certified as an approved manufacturer one week prior to the bid date, as required in the specifications. Bid opening day in a general contractor's office is a frantic time. Depending on the size of the job and its competitive nature, literally hundreds of phone calls are made. In this case there were over fifty line items that had to be filled in with names on the subcontractors list. Although quotations from subcontractors and suppliers are obtained in the weeks prior to opening, last minute confirmations are obtained in an effort to get the best and most accurate estimates. Preparation of the subcontractor list is time-consuming and critical to competition among bidders. If the bidder is allowed to leave an item blank, he may continue to "shop around" after the bid opening, if he is awarded the bid, to improve his profit margin. The owner, on the other hand, is deprived of the opportunity to consider the subcontractors or suppliers when the bids are evaluated. The bid opening was at 2:00 p.m. Federal, like many other contractors, dispatched an employee to the bid opening with a blank bid. While the staff were at the contractor's office compiling estimates, the representative at the opening was on the phone taking down last minute information. Rick Furr, Vice-President of Federal for eight years, did not give specific instructions to his representative regarding leaving blanks or drawing a line. In some cases, the blanks or lines were intended to mean that Federal was going to do the work itself; in most cases, however, Federal intended that someone else would do the work. After hearing Federal's explanation of its bid, Dr. Pettit and his staff discussed it and came to the conclusion that even though there were a "goodly number of irregularities", that it was "poorly done" and "sloppy" (transcript, p.219), in their opinion Federal did not gain significant material advantage, so they recommended the award go to Federal, as lowest bidder. Dr. Pettit explained at hearing that because of the language on the subcontractor list form, that ". . . any work item not included would be assumed by the owner as being performed by the Bidder's own forces", the School Board intended to require Federal to use their own forces for those work items which they left blank. By "their own forces", he means the work would be done by Federal employees on Federal's payroll, for whom workers' compensation is paid. (Transcript, pp.228-9.) This stated intention is so conflicting with Federal's intention and capabilities as to be utterly disingenuous. Although Federal can do its own site concrete work, just as most contractors do, it is not licensed to do termite control. It does not have a batch plant to supply concrete. It cannot manufacture a metal roof system, chalkboards and tackboards, specialty signs, darkroom equipment, an intercommunications system, or a public address system. Even if it could, it is not one of the approved manufacturers listed in the bid specifications for most of these items list. It is apparent, therefore, that Federal will either be unable to perform under the contract or that changes must be made to its subcontractors list. The approximate combined value of the work items left blank, or partially blank, by Federal is $1 million. Federal gained a competitive advantage by failing to complete all the blanks on the subcontractors list form. It gained precious minutes of time to concentrate on other aspects of the bid preparation; it is not bound to a given supplier, manufacturer or installer and can continue to bid shop. Phillips' bid, the second lowest, was non-responsive as it failed to list any subcontractors. It left blank the entire four-page attachment to the bid. (Joint Exhibit #4.) Indus' bid materially deviated from the specifications, as stipulated by the parties. (See stipulated Facts, above, and Joint Exhibit #5.) Barton-Malow's subcontractors list included Aetna Steel as the steel fabricator/supplier, but Aetna Steel verified in writing that they did not bid the structural steel on this job. Barton-Malow also used its surety's bid bond form, rather than the form required in the specification. The form provided by Barton-Malow lacked several provisions found on the required form, including the payments of expenses and attorney's fees in the event of a suit on the bond. (Joint Exhibits #1 and 6; Transcript, pp.89-90) Barton-Malow did fill in all of the blanks on the subcontractors list in accordance with the instructions at the pre-bid conference. In its bid specifications and accompanying documents and instructions, the School Board reserves the right to reject any and all bids received and to waive any and all irregularities in regard thereto. (Joint Exhibit #1, p.C- 1.310.) Since the only recommendation the School Board was given is to award the contract to Federal, the lowest bidder, it has not taken any action on the remaining bids.
Recommendation Based on the foregoing, it is hereby RECOMMENDED that the School Board of Sarasota County award the contract to Gulf Constructors, Inc., as the lowest responsive bidder. DONE and ENTERED this 1st day of March, 1989, in Tallahassee, Leon County, Florida. MARY CLARK 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 1st day of March, 1989. APPENDIX The following constitute my rulings on the findings of fact submitted by the parties: Petitioner's Proposed Findings Addressed in Background. Adopted in paragraphs 2. and 7. Adopted in paragraph 2. Adopted in paragraph 7. Adopted in paragraph 4. Rejected as irrelevant. Adopted in paragraphs 12. and 17. 8.-10. Rejected as unnecessary. 11.-13. Adopted in paragraph 3. 14.-19. Adopted in substance in paragraph 11. 20. Adopted in summary in paragraph 16. 21.-30. Adopted in substance in paragraph 16. 31.-36. Adopted in substance in paragraph 17. 37.-41. Addressed in conclusions of law. Rejected as cumulative. Adopted in paragraph 18. Adopted in paragraph 19. Adopted in paragraph 20. 46.-58. Rejected as cumulative and unnecessary 59.-61. Adopted in paragraph 12. 62.-90. Rejected as cumulative, unnecessary or a restatement of testimony, rather than a finding of fact. 91.-96. Although credible, Mr. Cannon's opinion on the enforceability of the bond is not competent. This is basically a legal opinion. 97.-149. Rejected as cumulative, unnecessary, or a restatement of testimony, rather than a finding of fact. Respondent's Proposed Findings Addressed in Background. Adopted in paragraph 3. Adopted in paragraph 21. 4.&5. Adopted in paragraph 3. 6.&7. Rejected as statement of testimony, not a finding of fact. 8.&9. Rejected as immaterial. 10.&11. Adopted in paragraph 4. 12.&l3. Rejected as immaterial. 14.-16. Rejected as contrary to weight of evidence. 17. Adopted `in paragraph 11. 18.-45. Rejected as unnecessary or subordinate to the findings in paragraph 11. Adopted as a legal conclusion. 47.-52. Rejected as unnecessary. Adopted in paragraph 14. Rejected as unnecessary; this is addressed in the conclusions of law. 55.-59. Rejected as contrary to the weight of evidence. Rejected as unnecessary. Rejected as contrary to the weight of evidence. COPIES FURNISHED: DARYL J. BROWN, ESQUIRE MICHAEL S. TAAFFE, ESQUIRE ABEL, BAND, BROWN, RUSSELL & COLLIER 1777 MAIN STREET POST OFFICE BOX 49948 SARASOTA FLORIDA 34230-6948 JOHN V. CANNON, III, ESQUIRE ELVIN W. PHILLIPS, ESQUIRE WILLIAMS, PARKER, HARRISON & DIETZ 1550 RINGLING BOULEVARD POST OFFICE BOX 3258 SARASOTA, FLORIDA 34230 HONORABLE BETTY CASTOR COMMISSIONER OF EDUCATION THE CAPITOL TALLAHASSEE, FL 32399 DR. CHARLES W. FOWLER SUPERINTENDENT SCHOOL BOARD OF SARASOTA COUNTY 2418 HATTON STREET SARASOTA, FL 33577
Findings Of Fact By Joint Prehearing Stipulation filed at the time of hearing, the parties agree that bids for contract No. E-4450, the contract in issue here, were opened by the Respondent in Fort Lauderdale on October 11, 1991. Bids were received from five bidders including the Petitioner, Power, and the low bidder, Certified. Based on its evaluation of the bids submitted, on October 18, 1991, Respondent posted an intent to award the contract to Power Sweeping Services, Inc., Petitioner herein. However, thereafter, on October 22, 1991, the Department received a formal protest from the low bidder, Certified, challenging the intent to award. After review of the substance of Certified's protest, Respondent notified all bidders that it would be reposting its intent to award on November 5, 1991, and on that date, did repost, indicating an intent to award the contract in question to Certified, the low bidder. Thereafter, on November 14, 1991, Petitioner timely filed its formal protest, having filed its initial intent to protest on November 6, 1991. The bid blank, which was issued to all prospective bidders at the pre- bid conference held in this matter for a contract to involve mechanical sweeping on Interstate Highway 595 from its eastern terminus to Southwest 136th Avenue, including interchange ramps at I-95, I-595, and State Road 84, contained as a part thereof a notice to contractors which, at page 1 of 4, (page 1 of the 36 page bid package), contained a notation that for contracts of $150,000.00 or less, the bidder would be required to submit, as proof of ability to acquire a performance and payments bond: a notarized letter from a bonding company, bank or other financial institution stating they intend to issue a performance and payment bond in the amount of your bid, should your firm be awarded the project; in lieu of a notarized letter the following may be substituted: a bid guarantee of five percent (5%); or a copy of the contractor's certificate of qualification issued by the Department. This note specifically states that "failure to provide the following required evidence of bonding", as indicated above, with the bid proposal would result in rejection of the contractor's bid. Petitioner submitted a notarized "letter of commitment to issue bond" dated October 8, 1991, by Burton Harris, attorney in fact and resident agent for American Bonding Company. Certified submitted with its bid an un-notarized letter from Mark A. Latini, bond manager with Bonina - McCutchen - Bradshaw Insurance to the effect that "Amwest Surety Insurance Company is the surety for the above referenced contractor and stands ready to provide the necessary performance and payment bond for the referenced bid should CPM be low and awarded the referenced contract." Five bidders submitted bids. Certified was the low bidder with a bid price of $61,474.85. Florida Sweeping, Incorporated was second low bidder with a bid of $67,388.16, but that bid was rejected because an addendum was not noted. Petitioner was third lowest bidder with a bid of $72,290.65. Because Certified's bid as initially submitted did not contain the required notarized letter from the bonding company, its bid was initially rejected. Thereafter, however, Certified's president, Mr. Hanousek, who prepared Certified's bid, and who attended the pre-bid meeting, called the Department's District office the day the bids were opened and was informed that his company's bid was low, but was rejected because its bond commitment letter was not notarized. As a result, he submitted a notice of protest and a subsequent protest to the denial of Certified's bid. A hearing on Certified's protest was not held. When Joseph Yesbeck, the District's director of planning and programs, who was at the time serving as acting district secretary in the absence of the appointed secretary, was contacted by Mr. Hanousek. He reviewed the file and met with Ms. Martin, the District's contract administrator for construction and maintenance contracts and the contracting staff to see what was happening. At that point Ms. Martin explained why Certified's bid had been disqualified, and the matter was thereafter discussed with the District and Department attorneys. When the District secretary came back, Mr. Yesbeck briefed him and recommended that based on the information he had received from the District and Department attorneys, the failure to submit the notarized letter should be considered a non-material deviation and the Certified bid be determined the low responsive bidder. The reasons for this were that the absence of the notary did not really give any competitive advantage to Certified and that ordinarily defects of this nature are routinely allowed to be cured. When the District secretary, on the basis of the information provided by Mr. Yesbeck, decided to repost the contract, Mr. Yesbeck prepared a joint letter of reposting which removed Certified's disqualification and left it as the low bidder. None of the other rejected bidders, including Florida Sweeping and bidder Number 5, which was rejected because its bond proposal was not of a proper character, were advised that they could come in and correct the defects with their bond letters. According to Ms. Martin, the notice to contractors requiring a notarized letter from a bonding company as an alternative to the requirement to post a 5% bid guarantee was designed to promote participation in state contracting by small business and minority business enterprise applicants, so that the bidder does not actually have to post the bond in question. The notarization requirement was put in by the Department but neither Ms. Martin nor any other witness testifying on behalf of the Department was able to indicate why the bond certification had to be notarized. Historically, when the Department has gotten a bid without a notarized bond letter it has been rejected, and in Ms. Martin's experience, she has never known of a protest based on such a denial since she began working with contracts in July, 1988. When she reviews the bids, she reviews the bonding letter for its content as well as seeing whether it is notarized. Here, her reason for initially rejecting certified's bid was solely that the bond commitment letter was not notarized. The decision to reject was not hers alone, however, since she also checked with the District General Counsel who initially advised her that Certified's bond commitment letter was no good. Apparently, counsel changed his position upon discussion of the matter with Mr. Yesbeck and the Department's General Counsel since, according to Mr. Yesbeck, both counsel recommended subsequently that the absence of the notarization not be a disqualification. Further, according to Ms. Martin the requirement for the notarization has been utilized by District 4 since 1987 with all bids requiring it notwithstanding Mr. Hanousek's testimony that he has never seen the requirement before in any of the 6 successful contract's he has had with the Department before. In that regard, however, he admits this is the only contract he has had with District 4. Ms. Martin does not know if the notarization requirement is used in other Districts and no evidence as presented by any party to clarify that issue.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law it is, therefore: RECOMMENDED that a Final Order be entered setting aside the determination that Certified Property Maintenance's bid on Contract No. E4450, Job No. 869069108 was the low responsive bid. RECOMMENDED in Tallahassee, Florida this 28th day of January, 1992. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of January, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NO. 91-7592BID The following constitute my ruling on all Proposed Findings of Fact pursuant to Section 120.59(2), Florida Statutes submitted by the parties hereto. FOR THE PETITIONER: None submitted. FOR THE RESPONDENT: 1. & 2. Accepted and incorporated herein. Accepted and incorporated herein except for the finding that Certified's bid complied in every respect except the notarization. The assurance by the bonding company was not unqualified but conditioned upon Certified being awarded the contract. Accepted and incorporated herein. & 6. Accepted and incorporated herein. Accepted. Accepted and incorporated herein. Accepted and incorporated herein except for last sentence regarding which see 3., supra. Accepted and incorporated herein. FOR THE INTERVENOR: None submitted. COPIES FURNISHED: Bruce M. Cease, Esquire 2720 West Flagler Street Miami, Florida 33135 Susan P. Stephens, Esquire Department of Transportation 605 Suwannee Street, MS 58 Tallahassee, Florida 32399-0458 Ray Hanousek President Certified Property Maintenance 3203 Robbins Road Pompano Beach, Florida 33062 Ben G. Watts Secretary Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0458 Thornton J. Williams General Counsel Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0458
Findings Of Fact By Notice To Contractors dated October 4, 1984, Respondent Department of Transportation (DOT) advertised for sealed bids on a number of state road projects for submission by 10:30 A.M. on October 31, 1984. Among the projects were Job No. 97930-9384 in Palm Beach County, and Jobs No. 97890-3323 and 89090- 3513 in Martin County. The Notice to Contractors provided that a proposal guaranty of not less than five percent (5 %) of the total actual bid must accompany each bid in excess of $150,000, and provided that bid bonds shall conform to DOT Form 114-G (Rev. July 1969). It further stated that all work was to be done in accordance with the plans, specifications, and special provisions of the State of Florida, Department of Transportation. (Stipulation, Ranger Exhibit 9, Dickerson Exhibit 3). Petitioner Dickerson Florida, Inc., (Dickerson) of Stuart, Florida is a contractor that frequently submits bids on DOT road projects. Ted H. Tyson is President of the firm and has participated in some 1,000 to 1,200 bids with DOT since 1960. He and his Vice-President, James R. Widmann reviewed the DOT advertisement of October 4, 1984, and determined to bid on several projects, including the Martin County Job No. 97890-3323 and 89090-3513. Accordingly, Widmann directed his Executive Secretary, Sandy MacCallum, to order the bid packages from DOT and to obtain necessary bid bonds. She proceeded to follow her instructions. The bid bonds were ordered from Surety Associates, Inc., in Jacksonville, Florida, a firm that had done business with Dickerson for some 15 years. Surety Associates mailed two (2) bid bonds, including one (1) for the project in question, to Dickerson on October 16, 1984 and they were received by Dickerson on October 18, 1984. The project documents were received from DOT about October 10 and the Dickerson bid was prepared in Stuart, including the signature of Tyson on the bid bond. Tyson and Widmann took the Dickerson bid proposals to Tallahassee on October 30, 1984. They did further work on the bid materials for three (3) projects at their hotel that evening. The next morning, after ascertaining low bids of sub-contractors, they completed work on the bid packages and checked to insure that they were complete, including the fact that the bid bonds were in the envelopes with the three (3) bids. They were then sealed by Widmann and delivered by him at approximately 9:30 A.M. on October 31, to the DOT central administration office. The bid bends had been placed in the bid materials, but not stapled to the other documents. (Stipulation, Testimony of Lynch, MacCallum, Widmann, Tyson, Dickerson Exhibits 1-2). Ranger Construction Industries, Inc., (Ranger) of West Palm Beach, Florida is a contractor that has submitted bids to DOT in the past, and the firm decided to bid on four (4) projects for the October 31, 1984 bid opening. Bid bends for the proposed projects were ordered by Ranger from the George H. Friedlander Company of Charleston, West Virginia on October 18, 1984. They were issued and mailed to Ranger by that firm on the same date, including one (1) for the project in question, Job No. 97930-9384 in Palm Beach County. On October 30, 1984, the Ranger "Bid Team" consisting of representatives of the firm arrived in Tallahassee where they occupied adjoining rooms at a local hotel. They were joined that evening by George Friedlander whose firm had issued the bid bonds for the four (4) projects on which Ranger intended to bid. They worked during the evening on the bid packages and continued the following morning at which time several independent checks for completeness were made by Friedlander, Leo Vecellio, Jr., President of Ranger, and James M. Slade, Executive Vice-President. They made sure that the bid bonds were placed in the already stapled bid documents in each envelope which were thereafter sealed. It was noted during this process that one (1) bid bond was missing, but it was immediately found in the room and also inserted into the appropriate envelope and sealed. Thereafter, Friedlander and Gene Pearson, a Ranger representative, took the bid envelopes to the basement of the hotel and placed them in a bid box maintained by the Florida Transportation Builders Association as a service to association members. The bid box was in a foyer and a representative of the association was present at all times. Immediately prior to placing the envelopes in the bid box, the envelopes were sealed by scotch tape by Pearson. At about 9:45 A.M., they were taken by an employee of the association to the appropriate location for submission of bids at the DOT building. (Stipulation, Testimony of Slade, Vecellio, Stanchina, Friedlander, Brewton, Ranger Composite Exhibit 1, 5-9). On October 31, 1984, DOT personnel followed their customary procedures in processing bids submitted on 53 projects. Lee Schroeder was in charge of the bid opening in place of his supervisor, John Ted Barefield, Chief Bureau Contracts Administration, who was absent that day. Schroeder was assisted by Ray Haverty and about eight (8) other DOT employees. At 10:30 A.M., the various bids were opened by the DOT employees, removed from their envelopes, and stacked on tables by project number. There is no evidence that any of the bids were unsealed prior to opening at the appointed time. Haverty and Schroeder checked the bids for addenda. No check was made at this time for the presence or absence of bid bonds. The bids were then stacked by job number and moved to a higher level in the DOT auditorium where Haverty read the pertinent information from the bids regarding the job, name of bidder, and amount of the bid. Dickerson was the apparent low bidder on Job No. 97890-3323 and 89090-3513 with a bid of $1,010,459.35, and Ranger was the apparent low bidder on Job No. 97930- 9384 with a bid of $1,210,323.66. Dickerson's bid was $75,246.49 lower than the next low bidder, and Ranger's bid was $83,365.93 lower than the next low bidder. After reading the pertinent bid information, a rubber band was placed around the bids for each project and placed in a plastic container. After completing the bid opening procedure, the four (4) or five (5) plastic containers holding all the bids were covered and placed on a cart where they were taken to the contract administration office. The bid envelopes had also been placed in a cardboard box when the bids were opened and they were taken to the same office on the cart. The envelopes were checked for any contents, but nothing was found. (Testimony of Barefield, Schroeder, Haverty, Stipulation, DOT Exhibit 2). During the afternoon of the bid letting, several employees of DOT's minority programs office reviewed all of the bids to determine the presence or absence of required documents concerning the disadvantaged business enterprises and good faith effort submittals in this regard. During the course of this review, pertinent documents were photocopied and, in some instances, it was necessary to unstaple the bid packages to perform this function. A trash can was available in the immediate area for the disposal of any peer copies. The trash cans are emptied each evening by custodial personnel. The minority programs employees finished their review the next morning, November 1, 1984. At this point, Ray Haverty customarily stapled any loose bid bends to the back of the front cover of the bid package so that there would be no loose documents when the bids were given to other employees who served as "checkers" of the bid documents. (Testimony of Haverty). The DOT "checkers" are provided with the bids for one (1) or more projects and they proceed to check the bid documents for appropriate signatures, bends, seals, and the like. The standard procedure is for a checker to write the initials "BB" on the top left side of the front sheet of the bid documents if the bid bend has been included. If not included, the checkers are suppose to clip a note reflecting that fact to the front of the bid package. During the course of checking the bids in question, it was discovered that there were no bid bonds in the Dickerson and Ranger bid packages for the jobs in question. Although different checkers had placed a "BB" on the top front page of each bid package, the specific checkers in question were under the misapprehension that that symbol should be placed there simply because the documents had been checked for bid bonds. The correct procedure is set forth in a checklist that bid checkers are supposed to follow, although the date of inception of its use is unclear. As soon as it was reported to Ray Haverty that the Dickerson and Ranger bonds were missing, he instituted a thorough search of the office, including the minority business programs office, but was unsuccessful in finding the two (2) missing bid bonds. Although it was not precisely established when Haverty was informed of the missing bonds, it was probably on either November 2, or Monday, November 5, 1984. (Testimony of Haverty, Maloy, Daniels, Pilcher, Stipulation, Dickerson Exhibit 2). On November 5, 1984, Dickerson was advised by telephone call to its Stuart, Florida office from DOT's employee, Lee Schroeder, of the Contracts Administration Division, that the bid bond on the Martin County project could not be located. DOT was told by Dickerson that the bid bond had been included in the sealed envelope with its bid and that a copy of the original bid bond and a replacement bid bond would be promptly secured and submitted to DOT. On November 8, 1984, or shortly thereafter, Dickerson submitted a copy of the original bid bond, a replacement bid bond, and affidavits of Tyson, Widmann, and MacCallum concerning submission of the original bid bond. On November 15, 1984, the DOT Contract Award Technical Review Committee met and determined that Dickerson's low bid be rejected as non-responsive for failure to include a bid bond with its bid, and that the contract be awarded to the next low bidder, Hardrives Company of Ft. Lauderdale, Florida. The notice of DOT's intent to award State Job No. 97890-3323 to Hardrives Company was confirmed in a Mailgram dated November 16, 1984, and the formal notice of intent to award to that firm was issued eon December 10, 1984. Dickerson thereafter protested the rejection of its bid. (Testimony of Widmann, Tyson, Parefield, Lynch, Stipulation, DOT Exhibits 3, 6). Similarly, Ranger was advised by telephone call from Schroeder on November 5, 1984 that its bid bend for Palm Beach County-State Project Job No. 97930-9384 could not be located by DOT. By letter of November 6, 1984, Ranger informed DOT that the requisite bid bend had been present in the sealed bid envelope when submitted to the agency on October 31, 1984, and enclosed a duplicate original of the bend. At the November 15, 1984 meeting of the Contract Award Technical Review Committee, Ranger's low bid on the project was rejected as non-responsive due to the failure to submit a bid bend, and the committee voted to award the contract to Hardrives of Delray. By Mailgram, dated November 16, 1984, DOT advised Ranger that its low bid had been declared "irregular" due to its failure to submit a bid bend and stating that Hardrives of Delray, Inc., was new the apparent low bidder on the project. Ranger thereafter protested the decision by letter of December 10, 1984, and on December 18, filed its formal protest of the proposed award. (Testimony of Slade, Friedlander, Stipulation, DOT Exhibits 3, 6; Ranger Exhibits 2-4). The DOT 1982 standard specifications for road and bridge construction which are incorporated as a part of the bid proposal, provide pertinently as fellows: SECTION 1: Definition and Terms. 1-29 Proposal Guaranty. The security designated to be furnished by the bidder as guaranty that he will enter into the contract for the work if his proposal is accepted. SECTION 2: Proposal Requirements and Conditions. Rejection of Irregular Proposals. A proposal will be subject to being considered irregular and may be rejected if it shows omissions, . . . or irregularities of any kind. . . . Guaranty to Accompany proposals. No proposal will be given consideration unless it is accompanied by a proposal guaranty of the character and amount indicated in the Notice to Contractors, and made payable to the Governor of the State of Florida. Proposals shall be submitted with the under- standing that the successful bidder shall furnish a contract bond pursuant to the re- quirements of 3-5. SECTION 3: Award and Execution of Contract. 3-2 Award of Contract. 3-2.1 General: The award of the contract, it if be awarded, will be to the lowest responsible bidder whose proposal complies with all the requirements necessary to render it formal. (Testimony of Barefield, DOT Exhibit 5). It was stipulated by the parties that Ranger and Dickerson meet all requirements for the award of the contracts in question if it is determined that they submitted the required bid bonds to DOT in their bid packages on October 31, 1984. Based on the foregoing facts, it is further specifically found that both Ranger and Dickerson submitted the requisite bid bonds on the projects in question in their bid packages on October 31, 1984, and that the cause of the apparent loss of the bonds thereafter cannot be determined by the evidence presented at the hearing.
Findings Of Fact In June 1987 The School Board of Lee County, Florida invited the submission of sealed bids for grading and drainage improvements at the new Multipurpose Building at Fort Myers High School. In addition to requiring grading, the project involves the erection or placement of structures in the nature of a drainage system consisting of culverts, pipes, and concrete inlets with grates, to be tied into the existing drainage system off School Board property across a county right-of-way into a culvert for discharge across the street, and which on School Board property attaches to and becomes a part of an existing building. Sealed bids were submitted by Systems Technologies Co. of Ft. Myers, Inc. (hereinafter "Systems Technologies") and by Ledo Lines, Inc. Respondent determined Systems Technologies to be the lowest responsible bidder and advised Ledo Lines, Inc., that it would be awarding the contract to Systems Technologies. Warren W. Hunt is the president and the qualifying agent of Systems Technologies. Hunt has an underground utilities contractor's license which has been inactive since it was obtained by him in March, 1986, being inactive therefore both at the time that Hunt submitted the bid on behalf of Systems Technologies and at the time of the final hearing in this cause. The inactive status results from Hunt's failure to complete the license process with the State of Florida. Since Hunt's license was inactive due to being incomplete at the times material to this cause, neither Hunt nor Systems Technologies was a licensed contractor and Systems Technologies was not a responsible bidder at the time that the bid was submitted. The contract specifications set forth the method by which the bids would be evaluated. Paragraph numbered 2.9 on page PD-4 provides as follows: Comparison of Proposals - Proposals will be compared on the basis of total computed price for each division of work. Total computed price equals the sum of the prices for the lump sum Contract Item, plus the sum of the total prices for the unit price Contract Items for each Division of work. The total price for each unit price Contract Item will be obtained by multiplying the estimated quantity of each item by the correspond- ing unit price set forth in the Proposal form[.] That provision, accordingly, requires that the bids be evaluated based upon the sum of all line items rather than based only upon their total or "bottom line" figure. Respondent's Director of Facilities Planning admitted that he failed to comply with this provision of the contract specifications in evaluating the two bids submitted to him and in determining that the bid should be awarded to Systems Technologies. In Systems Technologies' bid, the sum of the prices for the lump sum contract items plus the sum of the total prices for the unit price contract items amounts to $30,109.60. However, in submitting its bid Systems Technologies incorrectly added its column of figures and incorrectly computed its Total Contract Price (Estimated) to be $29,768. Since the contract specifications envision a unit price bid rather than a lump sum bid, the amount of the bid of Systems Technologies is in fact the amount of $30,109.60. The bid of Ledo Lines, Inc., is for $29,913.84. Ledo Lines, Inc., is, therefore, the low bidder on this project. The contract specifications when read in their entirety clearly require that the low bid be determined by adding the unit price and lump sum components rather than relying on the lump sum "bottom line" figure shown for Total Contract Price (Estimated). Employees of the consultant who Prepared the specifications testified that they expect to be able to hold the bidders to the unit prices but not to the Total Contract Price (Estimated) because the estimated quantities may change. Thus, the evidence is uncontroverted that the determination of low bidder pursuant to the contract specifications is based upon the total of the unit price provisions and not by the single figure at the bottom of the page which adds those individual prices and which was added erroneously in this case by Systems Technologies. In their Prehearing Stipulation, the parties stipulated that the School Board is subject to mandatory competitive bidding for this project. They further stipulated that where there is mandatory competitive bidding, the contract must be awarded to the lowest qualified, responsive bidder. Since Systems Technologies is neither a qualified, responsive bidder nor the lowest bidder, it is clear that Ledo Lines, Inc., is the lowest responsive bidder for the project in question.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered determining Ledo Lines, Inc., to be the lowest responsive bidder and awarding the contract for grading and drainage improvements to the Multi- purpose Building at Fort Myers High School to Ledo Lines, Inc. DONE and RECOMMENDED this 25th day of September, 1987, at Tallahassee, Florida. LINDA M. RIGOT, 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 25th day of September, 1987. COPIES FURNISHED: James E. Melvin, Superintendent School Board of Lee County 2055 Central Avenue Fort Myers, Florida 33901 E. G. Couse, Esquire Post office Drawer 1647 Fort Myers, Florida 33902 Harry A. Blair, Esquire Post Office Box 1467 Fort Myers, Florida 33902
Findings Of Fact Based upon the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made. On October 11, 1991, DOT's District Four office let out for bid district contracts E4551 and E4554. Contract E4551 calls for the mechanical sweeping of Interstate 95 in Broward County. Contract E4554 calls for the mechanical sweeping of Interstate 95 in Palm Beach County. At a mandatory pre-bid conference, the bidders for the Contracts were provided with a packet which included a Notice to Contractors and Standard Specifications. The Notice to Contractors is a four page document which is specific to each contract. The Standard Specifications are the same for all district contracts. Both the Notice to Contractors and the Standard Specifications to the bidders required bidders to submit proof of the ability to acquire a performance and payment bond in an amount equal to the contract bid price. Bidders could satisfy this requirement by submitting a bid guarantee of 5% of the bid, submitting a notarized letter of intent from a bonding company or by providing a Certificate of Qualification issued by Respondent. The Notice to Contractors for both Contracts provided as follows: Failure to provide the following with each bid proposal will result in rejection of the contractor's bid.... District contracts of $150,000 or less require the following as proof of ability to acquire a performance and payment bond: A notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a performance and payment bond in the amount of your bid, should your firm be awarded the project; in lieu of a notarized letter the following may be substituted: (1) a bid guarantee of five percent (5%); or (2) a copy of the Contractor's Certificate of Qualification issued by the Department. (No emphasis added) Similarly, the first Standard Specification provides: 1.1 Bidders (contractors) A contractor shall be eligible to bid on this contract if:... (2) Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the District Contract Administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of your bid, should your firm be awarded the project.... The requirement to submit proof of the ability to acquire a performance and payment bond has been imposed on the Districts by DOT Directive 375-00-001-a (hereinafter the "Directive".) This Directive was in place at all times material to this proceeding. Section 3.2.2 of the Directive provides: A contractor shall be eligible to bid if: ...Proof of ability to acquire a performance and payment bond in an amount equal to the contract bid price is provided to the minicontract administrator with the bid proposal. As such proof all bids must be accompanied by a notarized letter from a bonding company, bank or other financial institution stating that they intend to issue a bond in the amount of the bid, should the firm be awarded the project. A bid guaranty as specified above may substitute as proof of ability to obtain a performance and payment bond. This applies to bids amount over or under $150,000. A copy of the Contractor's Certificate of Qualification issued by the Department may be substituted in lieu of a notarized letter for those contracts not requiring a bid bond. The bids for the Contracts were opened on October 11, 1991 in Fort Lauderdale, Florida. Bids were received from four bidders: CPM, SCA, Florida Sweeping, Inc. and P. F. Gomez Construction Co., Inc. In its bid proposals, SCA included executed bid bonds in an amount sufficient to cover the amount of each bid proposal. Each bid bond cost $55.00. CPM did not submit executed bid bonds with its proposals. Instead, CPM submitted letters from Mark A. Latini dated September 25, 1991. Those letters were provided on the stationery of Bonina-McCutchen-Bradshaw, Insurance and indicate that Mr. Latini is the "bond manager." The letters provide as follows: Amwest Surety Insurance Company is the surety for the above-referenced contractor and stands ready to provide the necessary performance and payment bond for the referenced bid should Certified Property Maintenance, Inc., be low and awarded the referenced contract. All bonds are subject to normal underwriting requirements at the time of the bond request.... The letters submitted by CPM with its bid proposals were not notarized and were not binding obligations to issue bonds since they were conditioned upon meeting certain unspecified underwriting requirements at the time of the bond requests. The submitted bids were reviewed by the District Four Contractual Services Office. The bids submitted by CPM were the lowest for each contract. Its bid for Contract No. E4551 was $109,343.97. Its bid for Contract No. E4554 was $30,312.63. SCA's bids for the Contracts were $139,442.14 and $44,100.00, respectively. During the initial review of the bid proposals, the Contractual Services Office rejected CPM's bids for failure to have its bonding company "letters of intent" notarized. In addition, the bid proposals submitted by Florida Sweeping, Inc. were rejected for failure to note a required addendum and the bids submitted by P. F. Gomez Construction Co., Inc. were rejected because the "proposal bond was not of proper character". On October 18, 1991, DOT posted its Notice of Intent to Award the Contracts to SCA, the only bidder for the Contracts whose proposals had not been rejected. CPM timely filed protests of the proposed awards to SCA on October 22, 1991. The protests filed by CPM argued that its bids should not have been invalidated simply because the bonding company's letters did not include notary seals. At this point, the sole basis for the disqualification of CPM's bids was the failure to have the bonding company letters notarized. Respondent contends that, except for the absence of the notary seal, the letters submitted by CPM met the requirements of the Notice to Contractor and the Standard Specifications cited above. However, those letters are equivocal and do not evidence a binding commitment to issue a bond upon award of the contract. The DOT officials admit that they do not know what "normal underwriting requirements" would or could be required by CPM's bonding company. This conditional language makes it uncertain whether CPM could obtain the necessary bond. Therefore, it is concluded that those letters do not meet the requirements of the Notice to Contractors, the Standard Specifications or the Directive. A hearing on CPM's protest was not held. CPM's president, Raymond Hanousek, who prepared CPM's bid and attended the pre-bid meeting, called DOT's District office the day the bids were opened and was informed that his company's bid was low, but was rejected because its bond commitment letter was not notarized. Mr. Hanousek spoke with Joseph Yesbeck, the District's Director of Planning and Programs. After their conversation, Mr. Yesbeck reviewed the file and met with Teresa Martin, the District's contract administrator for construction and maintenance contracts, and other members of the contracting staff. Ms. Martin explained why CPM's bid had been disqualified, and the matter was thereafter discussed with the District and Department attorneys. After reviewing the situation, Mr. Yesbeck determined that the failure to submit notarized letters should be considered a non-material deviation and the bids submitted by CPM should be accepted and considered the low responsive bids. Mr. Yesbeck concluded that the absence of the notary seal did not give any competitive advantage to CPM and that defects of this nature are routinely allowed to be cured. Therefore, he reversed the contract administrator's decision to disqualify CPM on both Contracts. The District secretary concurred in the decision reached by Mr. Yesbeck to repost the award of the Contracts. Mr. Yesbeck prepared a joint letter of reposting which removed CPM's disqualification and declared CPM to be the low bidder for both Contracts. At the time Mr. Yesbeck made his decision, he had not reviewed the Directive from the Assistant Secretary's office stating that there must be a notarized letter showing proof of ability to obtain a performance and payment bond. Mr. Yesbeck did not review the Directive until his deposition was taken one week prior to the hearing in this case. According to Ms. Martin, the option to provide a notarized letter from a bonding company as an alternative to the posting of a 5% bid guarantee or obtaining prequalification was designed to promote participation in state contracting by small business and minority business enterprise applicants. While DOT was apparently trying to make it easier and cheaper for companies to bid by not requiring a bond to be posted, the DOT Directive and the bid documents still clearly required unconditional proof that a bid bond would be issued if the contract was awarded to the bidder. CPM was not prequalified nor did it post a bond. Thus, in order to meet the requirements of the Notice to Contractors and the Standard Specifications, CPM's only option was to submit a notarized letter showing proof of ability to obtain a performance and payment bond. DOT was never provided with any proof that CPM had been prequalified by the bonding company for a bond and/or that a bond would unconditionally be issued if CPM was awarded the Contracts. Because the letters stated they were "subject to normal underwriting requirements at the time of the bond request", there was some possibility CPM would not be able to obtain a bond. Such a condition was not permissible under the bid doucments. The decision to accept CPM's bid was contrary to the DOT Directive, the Notice to Contractors and the bid specifications which require that a bidder demonstrate proof of ability to obtain a performance and payment bond. Consequently, it is concluded that DOT's decision to accept the conditional, unnotarized letters submitted by CPM was arbitrary and capricious. There is some indication that other DOT Districts have, on occasion, waived the notarization requirement for the bond letter. However, it is not clear whether the language in the bid documents was the same or similar in those cases and/or whether the bond letters were conditional. In the past, whenever District Four has gotten a bid without a notarized bond letter, the bid was rejected. Apparently, there has never been a protest based on such a denial in District Four. Under Section 337.18, DOT does not need to require notarized, unconditional bond letters on contracts under $150,000. Indeed, there was a suggestion that some DOT Districts have dropped the requirement for certain contracts under $150,000. However, the bid documents in this case clearly required some proof that the bidder could acquire a performance and payment bond upon award of the Contracts. It was incumbent for all bidders to meet this requirement. It was arbitrary to delete this requirement after the bids were submitted.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a Final Order finding the bids submitted by CPM to be non-responsive and rejecting those bids. Petitioner should enter into negotiations with SCA regarding the award of the contract. In the absence of a favorable negotiation, Petitioner should enter a Final Order rejecting all bids and opening the Contracts up for new bids. DONE and ENTERED this 24th day of March, 1992, at Tallahassee, Florida. J. STEPHEN MENTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of March, 1992.
The Issue The issue in this case is whether the Respondent, the Department of Transportation (DOT), arbitrarily refused to accept the low bid submitted by the Petitioner, Quinn Construction, Inc. (Quinn), and Bay Machine, Inc., for State Project No. 15200-3902.
Findings Of Fact On or about December 7, 1994, the Petitioner, Quinn Construction, Inc. (Quinn), submitted a $1,695,534.84 bid on behalf of Quinn and Bay Machine, Inc., in response to a November, 1994, Department of Transportation (DOT) solicitation for bids on State Project No. 15200-3902. State Project No. 15200-3902 was essentially the same project for which the DOT previously solicited bids on or about July 1, 1994. The earlier solicitation for bids was cancelled when all bids were rejected, and the bid solicitation process was reinitiated. All bidders were required to furnish a bid guaranty, and the parties stipulate that any bid not accompanied by a bid guaranty would be declared nonresponsive. Attached to the Quinn/Bay Machine bid was a Bid or Proposal Bond on DOT Form 375-020-09. There was only one bridge rehabilitation project for Pinellas County among the projects for which the DOT was opening bids on December 7, 1994, and the bid bond was attached to the bid proposal of Quinn and Bay Machine for State Project No. 15200-3902. Utilizing the DOT form, the Quinn bid bond described the proposal being bonded as being "for constructing or otherwise improving a road(s) and/or bridge(s) or building(s) in Pinellas County; particularly known as Bayway 7918 Bridge Rehab." The part of the form calling for identification of the "Project No." was left blank. The bid bond was executed by James M. Moore as attorney- in-fact for North American Specialty Insurance Company. In addition to calling for the "Project No." in DOT Bid or Proposal Bond Form 375-020-09, the DOT routinely furnishes all bidders a Bidder's Checklist which reminds bidders to use the form and to identify the project on the form by county, by the federal aid number(s), if applicable, and by the State Project Job Number. Although the Bidder's Checklist was not in the bid package received by Quinn in connection with the November, 1994, solicitation for bids, Quinn received a Bidder's Checklist for the July, 1994, solicitation for bids on the same project and for many other previous bid solicitations. In prior bid proposal submissions, including the bid proposal submitted for the same project in August, 1994, Quinn had its surety use the "Project No." to identify the project on the bid bond. The attorney-in-fact for the bond company testified that the number 7918 on the bond was a typographical error. He testified that he thought 798 was the number that was supposed to be on the bond to identify the project. The WPI No. for the project was 7116982. The applicable State Road number was 679. The applicable bridge number was 150049. Although DOT Bid or Proposal Bond on DOT Form 375-020-09 called for identification of the "Project No.," DOT would have accepted a bid bond that identified the project by any of these numbers or by the official name of the bridge, if any. The bridge in question has no official name. It was not even proven that the bridge is commonly known as the Bayway 7918 Bridge, or even as the Bayway Bridge. The bridge in question is part of the Pinellas Bayway, which is a system of roads, causeways and bridges connecting St. Petersburg and St. Petersburg Beach and several small keys in Boca Ciega Bay. There are two state roads on the Pinellas Bayway: State Road 682, which connects State Road 699 to the west on St. Petersburg Beach to Interstate 275 to the east in St. Petersburg; and State Road 679, which intersects State Road 682 and runs south through Tierra Verde into Fort DeSoto Park on Mullet Key. Both 682 and 679 have combination fixed-span and bascule (draw) bridges. The bridge in question is on 679. When the DOT opened the bid of Quinn and Bay Machine, the incorrect identification of the project on the bid bond was noticed, and the question was referred to the Technical Review Committee. During its meeting on December 21, 1994, the Technical Review Committee sought the advice of its legal counsel and was advised that the bond probably would not be enforceable due to the inaccurate identification of the project to which it pertained. Based in part on the advice of counsel, the Technical Review Committee voted unanimously to recommend to the DOT Contract Awards Committee that the bid proposal be rejected as being non-responsive because of the bid bond. On December 23, 1994, the Contract Awards Committee met and voted unanimously to reject the bid proposal as being non-responsive because of the bid bond. Instead, the Committee accepted the bid proposal of M & J Construction Company of Pinellas County, Inc. (M & J). It was not arbitrary for the DOT to conclude that the Quinn bid bond was, or might well have been, unenforceable due to the inaccurate identification of the project to which it pertained. The DOT did not even consider whether the Quinn bid bond also may have been invalid and unenforceable because it named just Quinn as the principal, instead of both Quinn and Bay Machine, the actual entity that was prequalified to bid on the project and the actual entity bidding on the project. It also was not arbitrary for the DOT to conclude that submitting an unenforceable bid bond is not a minor irregularity. If a successful bidder does not enter into a contract, the project would be delayed while it is being rebid. The delay itself would result in a monetary loss. In addition, rebidding the project would result in additional costs to the DOT. Submitting an unenforceable bid bond could give a bidder the competitive advantage of feeling able to escape from having to contract and perform in accordance with a low bid, if advantageous to the bidder, without being liable under the bid bond.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Transportation enter a final order dismissing the Petitioner's bid protest and awarding State Project No. 15200-3902 to M & J Construction Company of Pinellas County, Inc. RECOMMENDED this 26th day of April, 1995, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of April, 1995. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-0564BID To comply with the requirements of Section 120.59(2), Fla. Stat. (1993), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. (It appears that the Petitioner's proposed findings of fact are found at pages 2-5 of its Proposed Findings of Fact and Conclusions of Law. For purposes of these rulings, the unnumbered paragraphs on those pages are assigned consecutive numbers.) Rejected in part. (Joint Exhibit 2 refers to State Road 679, not the project, as having the "Local Name: Pinellas Bayway." Joint Exhibit 5 also only refers to State Road 679, not the project, by the name "Pinellas Bayway." Only the front covers of the technical specs refer to the "Pinellas Bayway Bridge." The other pages refer to the "Pinellas Bayway," and all of the pages also include the State Project Number.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. First sentence, accepted and incorporated to the extent not subordinate or unnecessary. Second and last sentences, rejected as not proven. Rejected in part as argument and in part as not proven. Last sentence accepted, but ambiguous and not legally significant, subordinate and unnecessary, whether DOT could "tie" the bid bond to the bid. Penultimate sentence, rejected in part as not proven (that Exhibit 4 "identified the project as the Pinellas Bayway"); otherwise, accepted and incorporated to the extent not subordinate or unnecessary. The rest is accepted and incorporated to the extent not subordinate or unnecessary. First sentence, rejected as not proven. (The evidence was clear that the DOT form requires a state project number and that the Bidder's Checklist provided to bidders by the DOT reminds bidders to use the form and identify the project by county, federal aid number(s), if applicable, and State Project Job Number.) Second sentence, subordinate and cumulative. Rejected as conclusion of law. Last sentence rejected as not proven that North American identified the project or that it used the local name of the bridge. The rest is rejected as not proven because the evidence was clear that the DOT form requires a state project number and that the Bidder's Checklist provided to bidders by the DOT reminds bidders to use the form and identify the project by county, federal aid number(s), if applicable, and State Project Job Number.) Accepted but subordinate and unnecessary. Rejected as not proven that DOT was arbitrary. The rest is subordinate, in part cumulative and in part argument. Subordinate, cumulative and argument. Rejected in part as conclusion of law, in part as argument and in part as not proven. Respondent's and Intervenor's Proposed Findings of Fact. All of the DOT's and the Intervenor's proposed findings of fact are accepted and are incorporated to the extent not subordinate or unnecessary or argument. COPIES FURNISHED: Suzanne Quinn, Esquire 1321 77th Street East Palmetto, Florida 34221 Thomas H. Duffy, Esquire Department of Transportation 605 Suwannee Street Tallahassee, Florida 32399-0450 Joseph G. Thresher, Esquire One Mack Center 501 E. Kennedy Bouelvard, Suite 725 Tampa, Florida 33602 Ben G. Watts Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450 Thornton J. Williams, Esquire General Counsel Department of Transportation 562 Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0450
Findings Of Fact On March 1, 1984, Respondent gave notice to qualified contractors that it would receive sealed bids for State Project No. 72000-3541, referred to as Federal-Aid Project No. M 9041(10). This project involves the installation of a computerized traffic control system for the City of Jacksonville. In response to the opportunity to bid, the Department of Transportation received four bids. Petitioner, Winko-Matic Signal Company, was among the bidders. The other bidders were Georgia Electric Company, Traffic Control Devices, Inc., and Sperry Systems Management. The bids of Traffic Control Devices and Sperry Systems were rejected based upon an error in bid tabulations on the part of Traffic Control, a mistake on the quantities page, with the Sperry rejection being based upon a bid bond problem. Traffic Control had been the apparent low bidder with a bid of $1,964,115. Winko-Matic was the second apparent low bidder with a bid of $2,279,604.70. The Department of Transportation had estimated that the total cost of the Jacksonville project would be $ 2,024,680.61. Having discarded the bid of Traffic Control Devices, the Department of Transportation telegrammed Winko-Matic on April 4, 1984, advising Winko-Matic that it was the apparent low bidder for the Jacksonville project. Subsequently, the awards committee of the Department of Transportation met on April 18, 1984, and determined to reject all bids and re-advertise the job. In the course of this meeting the awards committee was told that there were erratic bids received on contract items, pointing to some perceived confusion among the contractors as to requirements of the contract. Discussion was also held on the possibility of establishing a pre-bid conference if the project was re advertised. The awards committee then voted to reject the bids on the basis that the apparent low bidder, Winko-Matic, had submitted a bid which-was 12.6 percent over the Department's estimate, instead of being within 7 percent of the Department of Transportation's pre-bid estimate, a point above which the Department of Transportation in its non-rule policy would call to question to the acceptability of the apparent low bid. In addition to deciding to reject all bids and re-advertise, it was determined that a pre-bid conference should be scheduled at least 30 days prior to the bid-letting date. Winko-Matic was advised that the Department of Transportation's decision to reject all bids by correspondence of May 4, 1984, in which it was indicated that all bids had been rejected based upon the fact that they were too high. In response to this notice of rejection, Winko-Matic, effective May 17, 1984, filed a written notice of protest. The case was subsequently referred to the Division of Administrative Hearings on June 20, 1984, and a final hearing date was established by Notice of Hearing of July 5, 1984. The hearing date in this cause was September 12, 1984. The Jacksonville project in question requires the utilization of what has been referred to "UTCS Enhanced" software. This software package is unique and has only been used in a limited number of locations within the country. Those locations are Los Angeles, California; San Diego, California; Broward County, Florida; and Birmingham, Alabama. Another unique feature within the project design is the use of an associated coaxial computer sys gem. Given the unique nature of this project and the fact that the Department of Transportation had never advertised for bids related to UTCS software, Department of Transportation obtained assistance from a consulting firm, Harland, Bartholomew & Associates. In fulfilling its function Harland gave estimates to include an estimate related to the projected cost of the software, Item 681-102. The Harland estimate for the overall project was $2,143,130 including a $100,000 estimate for the software system. That estimate relating to the software was subsequently adjusted by the Department of Transportation to depict a cost of $13,780. The Department of Transportation estimate was based upon information within its computer related to a system unlike the enhanced software contemplated by the plans and specifications. In other words, the stored information in the Department of Transportation computer was not the same as contemplated by the plans and specifications in the Jacksonville project. Moreover, the initial estimate of Harland was based upon the idea of an extended software system, as opposed to an enhanced software system. Winko-Matic had bid $389,500 for the software in Item 681-102. That estimate was premised upon figures obtained from JHK and Associates, the group which Winko-Matic intended to use as its subcontractor for the enhanced software portion of the project. JHK developed the software and was responsible for systems integration of the Los Angeles, California, project, one of the locations in which UTCS enhanced software has been utilized. JHK premised its estimate for the software hare upon experience in Los Angeles and an evaluation of the tasks to be performed related to the enhanced software. This included general software development activities, hardware innovation, installation costs during the period of acceptance and testing, and the preparation of data base. The JHK bid price was $339,500. Another $50,000 was added to that price related to what the Petitioner describes as its management costs for that item. By June 20, 1984, when a further meeting was held by the awards committee on the subject of the Jacksonville project, it was concluded that the estimate made by the Department of Transportation of $13,780 was not correct, on the topic of the enhanced software. A more reasonable estimate, according to the information imparted in this session, would be $200,000 for enhanced software as called for in this project, with a $100,000 amount being a reasonable estimate had they chosen to use extended software. Adjusting the initial price related to the UTCS enhanced software to reflect a corrected estimate of the Department of Transportation in its original advertised bid, that estimate becomes $2,210,900.61 and its consultant Harland's estimate becomes $2,243,130. With this adjustment, the differential in the estimate made by the Department of Transportation and the Petitioner approaches 3 percent and not the 12.6 percent originally found. The 3 percent is below the threshold of 7 percent used as the policy for determining whether a bid might be rejected as being far beyond the acceptable limits set forth in the Department of Transportation's estimate. In the aforementioned June 20, 1984, awards committee meeting, the Department of Transportation continued to hold the opinion that all bids in the Jacksonville project should be rejected and the matter re-advertised. Although the problem pertaining to the estimate of the cost of the enhanced software package had been addressed, the committee continued to feel that the prices received in the bid letting were erratic Reference was also made to revisions or modifications to the project plan which would be offered if the matter were re- advertised. It was also pointed out that the Federal Highway Administration would concur in the Department's decision to reject all bids and would accept modifications. The awards committee again voted to reject the bids. The matter was again considered by the awards committee on August 31, 1984. On that occasion, it was pointed out that the revisions contemplated by the Department of Transportation, should the matter be re-advertised, would not affect in a substantial way the cost estimate for the project with the exception of Item 680-101, the system control equipment (CPU), which would promote a lower price for the project. The committee determined in the August, 1984, meeting to reject all bids and re-advertise. While the initial notice of rejection of May 4, 1984, had suggested the basis for rejection as being the fact that Petitioner's bid far exceeded the 7 percent allowance for price above the Department of Transportation's estimate of costs, the meetings of the awards committee and the suggestion of the Respondent in the course of the final hearing in this case indicated that there were other reasons for the decision to reject. Those Were: (a) an apparent lack of clarity among bidders regarding specifications for the Jacksonville job, (b) the desire of the Respondent to revise specifications on the Jacksonville project; and (c) a lack of sufficient competition in the bids. In connection with the first of the additional reasons Respondent suggests that variations within the bid responses related to particular line items within the specifications point out a lack of clarity in the project's specifications or confusion by bidders related to those specifications. Respondent did not bring forth any of the bidders who might speak to the matter of possible confusion or misunderstanding concerning some of the bid items. By contrast, the Petitioner's president; the president of JHK & Associates and James Robinson, Harland's project manager for the Jacksonville job, did not find the specifications in the original documents to be confusing. In addition, the testimony of those individuals established the fact that bid variations related to particular line items are not extraordinary and do not establish any apparent confusion by the bidders as to the requirements of those line items. In effect, what the differentials demonstrate are variations related to the manufacture or in-house capabilities of the bidders and an effort to allocate discretionary costs in various places as to line items. Moreover, they might indicate last- minute adjustments in the bid quote prior to the opening and a possible effort by a contractor to enter into a new job market. Finally, they demonstrate offsetting which is the allocation of item prices by a contractor to maximize profits. To do this, a contractor submits high bids on items representing quantities which the contractor feels will increase after the contract is awarded and submits low bids on items representing quantities which are not likely to change. In summary, while the Department of Transportation in its presentation expressed some concern about the variations in the pricing in the bid quotations offered by the respective bidders in this project, its suspicions on the question of the possible clarity of its specifications were not confirmed and are not convincing. On the topic of revisions which the Department of Transportation would offer if the matter were re-advertised, with one exception those matters appear to be items that could be attended through change orders or supplemental agreements. They are not matters which necessarily must be addressed through a rejection of all bids and a re-advertising of the project. The lone exception to this is the possibility that the Department of Transportation may not be able to protect its proprietary rights in the enhanced software which is being developed for the project, under the terms of the present bid documents. Given that uncertainty, the Respondent would wish to re-advertise the project and make certain that its proprietary interests are protected. Finally, Respondent has alluded to the fact that the Jacksonville project should be re-advertised in view of the lack of competition in the initial letting. Only four bidders expressed an interest in this project at the time of the first letting. Of those, two bidders were found to be responsive. While this is a low number of bidders, there does not appear to be any agency practice on the part of' the Department of Transportation to the effect that this number of bidders would not be accepted. Moreover, no indication has been given that should the matter be re-advertised a greater number of bidders would express an interest than was the case in the first letting. Consequently, this reason for bid rejection is not acceptable. If Respondent did not reject the bids and re-advertise the project, Winko-Matic would be the successful bidder in the Jacksonville project.
