Findings Of Fact At some time prior to August 2, 1984, DOT issued bid blanks for a mini- contract for State Project No: 76020-3515, for work consisting of cleaning and guniting a concrete box culvert located on State Road 19, in Putnam County, Florida, approximately one mile south of the Cross Florida Barge Canal. The bid package, signed by C. A. Benedict, District Engineer, for the DOT, specifically reserved the right to reject any and all bids. The bid package broke the work down into three item numbers. The first was mobilization and called for one pricing unit. The second item called for maintenance of traffic at the work site and called for one pricing unit as well. The third area called for restoration of spalled areas (gunite) and called for approximately 437 cubic feet to be priced. In this regard, the plans furnished with the bid package and the bid package itself, in at least three separate locations, called for the bid as to the last item to be priced and paid for on a unit price basis. Petitioner submitted the lowest bid of seven bidders. It was determined to be faulty, however, in that though it properly priced the first two items, it failed to submit a unit price for the third item per unit, submitting instead a total price for the third item based on the entire cubic footage. Petitioner's bid indicated 437 cubic feet priced at a total of $17,832.00. Simple arithmetic permits a division which results in a unit price for each of the 437 cubic feet of $40,805. This last unit price, however, is not reflected on the bid submitted by Petitioner. Petitioner's bid is the only bid of the seven submitted which did not contain a unit price for each of the units in the third item. EDS has been in business since 1980. It performed one previous contract for DOT and is familiar with DOT's rules regarding bidding. It had ample opportunity to examine the plans and the bid blank before submitting its bid and admits that the unit price, though required, was omitted. Petitioner contends, however, that the omission is not a material variance and can be waived by Respondent. Respondent contends, on the other hand, that the failure to list the unit price in the third item is material. This determination is based on the fact that since the bid package calls for payment on a unit basis, the odd one- half cent per unit does not permit even money payment and requires rounding off. Even with this being true, the maximum difference would be one- half cent to be rounded off either upwards or downwards. At some point after opening, at least one of the unsuccessful bidders found out that Petitioner's bid failed to technically conform to the terms of the bid blank and at this point the second lowest bidder, Vann's Sandblasting, whose bid was $4,000.00 higher than that of Petitioner, and who had done several contracts for Respondent in the past, indicated that if petitioner's bid were not rejected, he would file a protest. The one-half cent variance, itself, is not material. Considering all factors, however, the failure to state the unit price may, under certain circumstances, be.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is, therefore: RECOMMENDED THAT Petitioner, EXPLOSIVE AND DIVING SERVICES, INC., be awarded the contract for State project No 76020-3515. RECOMMENDED this 27th day of February, 1985, at Tallahassee, Florida. ARNOLD H. POLLOCK Hearing Officer Division of Administrative Hearings Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 FILED with the Clerk of the Division of Administrative Hearings this 27th day of February, 1985. COPIES FURNISHED: Gail S. Wood, President Explosive and Diving Services, Inc. Post Office Box 200 Clarksville, Florida 32430 Larry D. Scott, Esquire Department of Transportation Haydon Burns Building, MS-58 Tallahassee, Florida 32301 Paul Pappas, Secretary Department of Transportation Haydon Burns Building, MS-58 Tallahassee, Florida 32301
The Issue Whether Department of Transportation acted fraudulently, arbitrarily, capriciously, illegally, or dishonestly in issuing its intent to award RFP-DOT- 91/92-9012 bid to Trauner Consulting Services.
Findings Of Fact Public notice that DOT was seeking competitive bids was given, and DOT prepared a document entitled: Request for Proposal, which set forth in detail all of DOT's requirements. The purpose of the RFP was to inform all potential bidders of the minimum requirements for submitting a responsive bid, and the specific criteria by which the bids would be evaluated. Specific areas of importance to Respondent were as follows: All proposals were to be submitted in two parts; the Technical Proposal and the Cost Proposal. The Technical Proposal was to be divided into an Executive Summary, Proposer's Management Plan and Proposer's Technical Plan. The price proposal was to be filed separately. The RFP requested written proposals from qualified firms to develop and provide training on highway and bridge construction scheduling use as it pertains to Department of Transportation Construction Engineers. Proposals for RFP-DOT-91/92-9012 (hereinafter "RFP"), were received and opened by FDOT on or about December 14, 1992. Eleven companies submitted proposals. The technical portions of the proposals were evaluated by a three (3) person committee comprised of Gordon Burleson, Keith Davis and John Shriner, all FDOT employees. Gordon Burleson is the Engineer of Construction Training for FDOT. He administers the training for FDOT engineers and engineer technicians who work in FDOT's Construction Bureau. John Shriner is the State Construction Scheduling Engineer for FDOT. Keith Davis is the District 7, Construction Scheduling Engineer and Construction Training Engineer for FDOT. The Committee members evaluated the proposals individually then met as a group. The Committee established no formal, uniform evaluation criteria to be used by all committee members. The price proposals were not revealed to the Committee members until after the proposals were technically evaluated and scored. The price proposals were reviewed separately by Charles Johnson of the Contractual Services Office, Department of Transportation. The Committee evaluated the proposals based on the general criteria contained in the RFP. The RFP listed the criteria for evaluation to include: Technical Proposal Technical evaluation is the process of reviewing the Proposer's Executive Summary, Management Plan and Technical Plan for understanding of project qualifications, technical approach and capabilities, to assure a quality project. Price Proposal Price analysis is conducted by comparison of price quotations submitted. The RFP established a point system for scoring proposals. Proposer's management and technical plans were allotted up to 40 points each, 80 percent of the total score. The price proposed was worth up to 20 points, or 20 percent of the total score. Petitioner's proposal was given a total score of 90 points out of a possible 100. Trauner's proposal was given a total score of 92.04 points out of a possible 100. Petitioner's was ranked highest for price proposal, and received a total of 20 points for its proposed price of $18,060. Trauner's proposed price was $24,500, the next lowest after Petitioner and received 14.74 points. The technical portion of Trauner's proposal was given a total of 77.3 points, 38 for its Management Plan and 39.3 for its Technical Plan. The technical portion of Petitioner's proposal was given a total of 70 points, 36.7 for its Management Plan and 33.3 for its Technical Plan. Each plan was reviewed separately by the three Committee members, The individual, pre-averaged scores vary with committee member, Keith Davis' score varying the most from the others. The Committee members did not discuss the proposals until after they had individually reviewed and scored them. The Committee members had discussed the criteria prior to receiving and evaluating the proposals. There was insufficient evidence to show that Committee members scores were determined by fraud, or were arbitrary, capricious, illegal, or dishonest.
Recommendation Based on the foregoing findings of fact and conclusions of law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is RECOMMENDED that Respondent, Department of Transportation enter a Final Order dismissing the protest filed herein by Petitioner, Systems/Software/Solutions and awarding RFP-DOT-91/92-9012 to Trauner Consulting Services. DONE and ENTERED this 12th day of March, 1992, in Tallahassee, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of March, 1992. APPENDIX Respondent's Proposed Findings of Fact: Accepted in substance: paragraphs - 1,2,3,4,5,6,7,8, 9,10,11,12,13,14,15,16,17,18,19,20,21 Petitioner's Proposed Findings of Fact: Accepted in substance: paragraphs - 1,5,11(in part) Rejected as not supported by the greater weight of evidence or irrelevant: paragraphs 2,3,4,6,7,8,9,10,11(in part),12 COPIES FURNISHED: Donald F. Louser, Qualified Representative Systems/Software/Solutions 657 Sabal Lake Dr, #101 Longwood, Florida 32779 Susan P. Stephens, Esquire Assistant General Counsel Department of Transportation 605 Suwannee Street, MS-58 Tallahassee, Florida 32399-0458 Ben G. Watts, Secretary Department of Transportation Attn: Eleanor F. Turner, MS-58 Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0458 Thornton J. Williams, Esquire General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32399-0458
The Issue The issue addressed in this proceeding is whether Petitioner or Intervenor submitted the lowest and best bid on Project No. RS-40.
Findings Of Fact On June 4, 1993, Respondent issued an invitation to bid (ITB) for Project No. RS-40 to develop the site for the future construction of a work camp in Holmes County. The work under Project No. RS-40 specifically included site preparation, grading, electrical work, sewage, utilities and fencing. The bids were due to be opened on June 29, 1993. Ten bids were submitted to the Department, including Petitioner, Panhandle Grading and Paving, Inc., and Intervenor's, Hewitt Contracting Co., Inc., bids. Panhandle's bid total was $815,734.00, and was the lowest monetary bid. Hewitt's bid total was $847,554.00, and was the third lowest monetary bid. Baxter Asphalt had the second lowest monetary bid. However, both Baxter and Panhandle's bids were disqualified as nonresponsive because neither company complied with the Department's prequalification requirements. Baxter did not protest the Department's bid award to Hewitt and Baxter is not a party to this action. On the other hand, Hewitt's bid was accepted since Hewitt had complied with the Department's prequalification requirements and was otherwise responsive to the ITB. Therefore, the Department awarded Hewitt the contract for Project No. RS-40 since in its opinion Hewitt was the lowest responsive bid on the project. The ITB clearly notified potential bidders that they must prequalify with the Department. The ITB stated, in pertinent part: All bidders must submit evidence that they are qualified to perform the work in accordance with Section B, paragraph B-2 of the specifications. Evidence of eligibility must be submitted to the owner (defined in article B-1) not later than five (5) calendar days prior to bid date. Additionally, the cover sheet for the bid documents admonished all bidders to submit evidence of their eligibility to bid to Respondent at least five (5) days before the bid letting. The cover sheet stated: All bidders on this project must prequalify according to the provisions of section B, "Instructions to Bidders", article B-2. Evidence of eligibility must be submitted to the owner (defined in article B-1) not later than five (5) calendar days prior to bid date. Section B-1 of the bid documents defines the owner of Project RS-40 as the Department of Corrections. Section B-2 of the bid documents instructed all bidders to prequalify with Respondent to participate in the bid process. Section B-2 states: Prequalification: Each bidder whose field is governed by Chapter 399, 489, and 633 of the Florida Statutes for licensure will be prequalified by the Department to participate in the bid process for a specific field or area of construction based on the bidder's area of license or certification. Bidder qualification requirements and procedures are established by the State of Florida, Department of General Services rule (Chapter 13D-11, Florida Administrative Code) and by the bidding conditions and specifications. Failure of the bidder to strictly meet and follow all such requirements and procedures may result in bid rejection or disqualification for contract award. For the bidder's convenience, the provisions of Rule 13D-11.004 Bidder's Qualifications Requirements and Procedures are set forth below. Requirements: Each potential bidder must present, or have presented within this current biennium (July 1 through June 30) odd number years, evidence that: He is authorized to perform the work required by these documents in accordance with the applicable provisions of Florida Statutes governing contractors, as a general (Insert contractor designation) contractor. If the Bidder is a corporation, he must submit evidence that this corporation is properly registered with the State of Florida, Department of State, Division of Corporations, and holds a current State Corporation Charter Number in accordance with the Florida Statutes. (*This sentence to be deleted by Architect- Engineer if not applicable.) All interested firms who have NOT qualified within the current biennium (July 1 thru June 30) odd number years must submit evidence of their eligibility during the bidding period, not later than five (5) calendar days (received date) prior to the bid date. The Owner may, for good cause, allow a firm to correct any deficiencies in evidence submitted. Notice of qualification will be mailed to each bidder, but a Bidder may not receive the written notification prior to a bid opening. He may learn his status prior to the bid opening time by calling the Owner (Department of Corrections), Bureau of Facilities Services at 904-487-1330). The Bidder shall submit the required evidence of eligibility to the Department of Corrections, Bureau of Facilities Services, 2601 Blairstone Road, Tallahassee, Florida 32399-2500. (emphasis supplied) All information shall indicate the full name, address and telephone number of the individual, partnership, or corporation, and the name of the contact person. Include a self-addressed stamped envelope. The names of all bidders will be checked against the list of contractors who have prequalified in accordance with the requirements of Section B-2. Additionally, a careful reading of Rule 13D-11, Florida Administrative Code, reveals that the information required under the Rule should be submitted to the owner of the project involved in the bid process, i.e. the Department of Corrections in this case. A contractor is the person who is qualified and responsible for an entire project and includes the person who submits a bid for a given project. Section 489.105(3), Florida Statutes. A general contractor is a person who is unlimited as to the type of work they can do, unless a specific type of license is required by Chapter 489, Florida Statutes. Section 489.105(3)(a), Florida Statutes. See also Section 489.113, Florida Statutes. Under Chapter 489, Florida Statutes, a contractor can be a certified general contractor or a registered general contractor. A certified general contractor can contract in any jurisdiction in the state without fulfilling the competency requirements of the local jurisdiction. Section 489.105(8), Florida Statutes. On the other hand, a registered general contractor is required by Section 489.117(2), Florida Statutes, to comply with all local licensing requirements. Registration with the state is specific for a given local jurisdiction and cannot be used in another jurisdiction. Section 489.113(2), Florida Statutes. In fact, Section 489.113(1), Florida Statutes, requires a contractor to be registered for a specific jurisdiction prior to engaging in the business of contracting. Additionally, a contractor must subcontract electrical, mechanical and plumbing work unless the contractor is state certified or holds the specific trade license required by the appropriate local authority if such a local license is required. Section 489.113(3), Florida Statutes. Importantly, Chapter 489, Florida Statutes, permits a person to act as a prime contractor, including submitting a bid on a project, where the bulk of the work under the contract is covered by the contractor's specific license, as long as the parts of the project for which he is not licensed are subcontracted to persons holding an appropriate license. Section 489.113(9), Florida Statutes. Respondent requires prequalification of contractors in advance of its bid lettings to ensure that everyone who bids is legally or financially qualified to do the work required in the bid. The five (5) day deadline prior to the bid letting gives Respondent's staff an opportunity to resolve any irregularities in a bidder's prequalification materials prior to the letting. Indeed, if a contractor is state registered, as opposed to state certified, Respondent's staff, prior to the bid, routinely contacts the local government with jurisdiction over the building site to determine if there are any local licensing requirements and if there are, to determine if the bidder/contractor is locally licensed in that jurisdiction. This process avoids the waste of time involved in reviewing a bid package from a bidder who cannot ultimately perform the work called for in the bid. More importantly, this process prevents a locally unlicensed registered contractor from having the ability to void a contract at its will after the bids are opened since it would be unlawful for the contractor to have either bid on a project located in a jurisdiction where the contractor was not licensed or enter into such a contract. The ability to refuse an award of a bid clearly constitutes an unfair advantage to the locally unlicensed registered contractor and could not be waived as immaterial by an agency. In this case, Hewitt is a certified general contractor and is therefore automatically qualified to work in Holmes County. Panhandle is a registered general contractor and can only bid on Project RS-40 if it has met the requirements for general contracting in Holmes County. The prequalification process requires a bidder who has not prequalified with Respondent during the current biennium to submit to Respondent his current state contractor license certification or registration, as well as his current corporate charter registration (if a corporation). When Respondent opened the bids for the Project, Petitioner had neither prequalified with Respondent nor obtained a license or certification of competency to engage in contracting work in Holmes County. Petitioner thought it was already prequalified under its prequalification with the Department of Management Services. However, prequalification with the Department of Management Services does not meet the requirements of the ITB which requires prequalification with the Department of Corrections. Panhandle did obtain the necessary licensure after submitting its bid and after the bids were opened. However, such belated licensure does not negate the unfair advantage created by Panhandle's failure to prequalify and be properly licensed prior to the bid opening as required by the bid documents.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent issue a Final Order in this case dismissing Petitioner's formal protest and awarding the contract for the Project to Intervenor. DONE AND ENTERED this 4th day of October, 1993, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 4th day of October, 1993.
Findings Of Fact Based on the stipulations and admissions of the parties, on the exhibits received in evidence, and on the testimony of the witnesses at hearing, I make the following findings of fact. The South Florida Water Management District (hereinafter "District") advertised for bids on Contract No. M-0137, Bid No. B-85-91, for the construction of a structure maintenance facility. The Specifications and Contract Documents for the project required that bidders submit a "Base Bid," which related to the essential components of the project, and three "add alternates," which related to additional items that the District might contract for over and above the Base Bid. The Notice To Contractors regarding this project included the following language: The right is reserved, as the interest of the District may require, to reject any or all proposals, to waive any informality in the proposal, or to readvertise for other or future proposals. Paragraph 2 of the Instructions To Bidders includes the following language: "The intent of the Proposal Form is to secure a price, based on unit prices, for the work described in the Contract. . . ." (emphasis added) Paragraph 4 of the Instructions To Bidders reads as follows: The District reserves the right to reject any and all proposals (i) when such rejection is in the interest of the District; (ii) if such proposal is void per se; or (iii) if the proposal contains any irregularities, PROVIDED, however, that the District reserves the right to waive any irregularities and to accept the lowest responsible bidder's proposal determined by the Engineer on the basis of the gross sum for which the work will be performed, arrived at by a correct computation of the base bid plus the alternate bid item or items selected by the District. Bid items will be considered by the District on the has is of budgetary capability. (First emphasis in original; second emphasis added.) Paragraph 5 of the Instructions To Bidders reads as follows: Proposals will be considered irregular if they show omissions, unauthorized alterations of form, additions not called for, conditional or unauthorized alternate bids, or other irre- gularities of any kind; also if the unit prices are unbalanced either in excess of or below the reasonable cost analysis values, or incomplete in any manner, including failure to bid on all items on the bid form. Paragraph 8 of the Instructions To Bidders reads as follows: No proposal can be withdrawn after it is filed unless the Bidder makes his request in writing to the District prior to the time set for the opening of bids, or unless the District fails to accept it within sixty (60) days after the date fixed for opening bids. Paragraph 10 of the Instructions To Bidders reads as follows: No interpretation of the meaning of the Plans, Specifications or other Contract Documents will be made to any Bidder orally. Every request for such interpretation should be in writing addressed to the Engineering & Construction Division, South Florida Water Management District, 3301 Gun Club Road, Post Office Box V, West Palm Beach, Florida, zip code 33402, and to be given consideration must be received at least Ten (10) calendar days prior to the date fixed for the opening of bids. Any and all such interpretations and any supplemental instructions will be in the form of written Addenda to the Specifications which, if issued, will be mailed by registered mail to all prospective bidders (at the respective addresses furnished for such purposes) not later than Five (5) calendar days prior to the date fixed for the opening of bids. Failure of any bidder to receive any such Addendum of interpretation shall not relieve any bidder from any obligation under his bid as submitted. All addenda so issued shall become part of the Contract Documents. The bid items are described in Section 01021 of the Specifications and Contract Documents. Subsection 1.01 of that Section describes what is included in the Base Bid as follows: The Base Bid includes all work shown on the plans and called for in the specifications for: Structure Maintenance Facility, complete. Building utilities including all rough-in required for alternate bid items whether or not alternate bids are accepted. Site work including utilities. All other costs of the project not attributable to Items 1 thru 3 above or Alternate Bid Nos. 1 thru 3 below. Subsection 1.02 of Section 01021 describes what is included in Alternate Bid No. 1 as follows: In the Base Bid all structural supports to receive the monorail trolley beams and hoists are included. Alternate No. 1 includes all work shown on the plans and called for in the specifications for two 15 ton capacity monorail hoists and trolley beams complete and operational. Work includes all final utility connections to points indicated on drawings, shipping, unloading at site, installation and final check-out and instruction to owner on operation of equipment as well as all other costs not attributable to items previously mentioned. Subsection 1.03 of Section 01021 describes what is included in Alternate Bid No. 2 as follows: In the Base Bid all mechanical and electrical rough-in is to be provided for the two offices and the toilet and locker rooms above. Alternate No. 2 includes all costs over the Base Bid for completing the offices, toilets and locker rooms including all plumbing and lighting fixtures, partitions, lockers finishes, structure and metal stair as indicated and specified in the applicable sections of these specifications. Subsection 1.04 of Section 01021 describes what is included in Alternate Bid No. 3 as follows: The Base Bid includes all site grading to finish elevations indicated. Alternate No. 3 includes all costs over the Base bid for providing subsurface preparation and asphaltic concrete paving to finish elevations indicated as described in Section 02513 for all areas where asphaltic concrete paving is shown. In September of 1984 the District had received bids for a similar project. Similar contract documents and bid forms were used for the project. Cox & Palmer Construction Company, Overland Construction Company, Inc., and Booth Construction, Inc., all submitted bids on the September 1984 project. All of the bids submitted on the September 1984 project, including the Booth bid, were submitted on an add alternates" basis. All of the September 1984 bids were rejected. A total of seven bidders submitted bids on the instant project. With the exception of Booth Construction, Inc., all of the bidders on the instant project calculated their bids on an "add alternates" basis. It was the clear intent of the architecture firm that prepared the Specifications and Contract Documents that the bids should be submitted on an add alternates" basis. There were no irregularities in the bidding process regarding the instant project prior to the opening of the first bid. At the duly appointed time a representative of the District began the process of opening and announcing the amounts of the bids. The first bid to be opened was the bid submitted by Overland Construction Company, Inc. The amounts bid by Overland were as follows: Base Bid $ 378,800 Alternate No. 1 64,000 Alternate No. 2 18,000 Alternate No. 3 11,200 Immediately after the announcement of the amounts bid by Overland, Mr. York, the Director of the District's Engineering and Construction Division, asked, "Is that an add-on or deduct?" Someone in the audience answered that it was an "add-on" bid. Mr. Gerachi, on behalf of Booth, promptly stated that the alternates should have been bid as "deducts". A general discussion ensued among members of the audience regarding whether the alternates should have been bid as "add-on" or "deducts." In order to continue with the bid opening process and to restore order in the room, a representative of the District announced that the matter would be resolved when the bids were tabulated and another representative of the District began the process of opening the rest of the bids. The bid submitted by Booth Construction, Inc., was the fourth bid to be opened. The amounts written on the Booth bid were as follows: Base Bid $ 396,586 Alternate No. 1 54,072 Alternate No. 2 14,597 Alternate No. 3 9,185 Immediately after the amounts of the Booth bid were announced, Mr. Alvin Booth, president of Booth Construction, Inc. stood up and stated that the Booth bid had been calculated on the basis of "deduct" alternates. The essence of his statement was that in calculating the amount of his company's Base Bid he had added to the base bid the sum of the three alternate bids with the understanding that the amounts shown for any of the three alternates would be deducted from his Base Bid if the District decided not to award a contract for one or more of the alternates. This statement following the opening of the Booth bid was the first time that anyone on behalf of Booth had made a specific unambiguous statement to representatives of the District responsible for this bidding process regarding the manner in which the Booth bid was calculated. 1/ The bid submitted by Cox & Palmer Construction Company was opened after the Booth bid. The amounts bid by Cox & Palmer were as follows: Base Bid $ 392,225 Alternate No. 1 38,770 Alternate No. 2 19,200 Alternate No. 3 11,456 The bid submitted by Booth Construction, Inc., was prepared by both Vincent Gerachi, an estimator and project manager employed by Booth Construction, Inc., and by Alvin Booth, president of Booth Construction, Inc. Mr. Gerachi has been an estimator on construction projects for approximately 12 years. Mr. Booth has been in the construction business for approximately 30 years and has had his own construction company for about 18 years. Both Mr. Gerachi and Mr. Booth were uncertain whether the alternate bids were supposed to be bid as "add-ons" or as "deducts." Neither of them attempted to do anything to resolve their uncertainty until the morning of the very day on which bids were to be submitted. On that morning Mr. Gerachi called a representative of the District to ask whether the bid should be prepared with the alternate bids calculated as "add-ons" or as "deducts." Mr. Gerachi spoke to Mr. Brown at the District, who suggested that Mr. Gerachi call the architecture firm that had prepared the Specifications and Contract Documents. Notwithstanding the provisions of Paragraph 10 of the Instructions To Bidders (see paragraph 6 of these findings of fact, above), it is a customary practice of the trade for bidders to communicate directly with project architects to resolve any uncertainties in the Specifications and Contract Documents. Indeed, it is generally understood in the trade that it is the duty of the bidder to communicate with the project architect to seek resolution of any ambiguities. Mr. Gerachi tried to reach the project architect by telephone, but was unable to reach him because the architect had already left his office to drive to the bid opening. Mr. Gerachi did not have an opportunity to talk to the architect prior to filing the Booth Construction bid because the architect did not come into the bid opening room until about one minute after 2:00 p.m. Mr. Gerachi talked to Mr. and Mrs. Booth before turning in the Booth bid. Mr. Gerachi prepared the Booth bid with the alternate bids calculated as "deducts" from the Base Bid. In other words, the amount of the Base Bid on the Booth bid included the sum of the three alternate bids, which alternate bids were also separately stated on the Booth bid. Alvin Booth participated in the preparation of the bid and was aware of the manner in which the Booth bid was calculated before the bid was submitted to the District. Even though the Base Bid on the Booth bid is in the amount of $396,586, it was the intention of Booth Construction, Inc., to bid $318,732 for the work described as being within the scope of the Base Bid. The reason for the higher amount being entered for the booth Base Bid is that Vincent Gerachi and Alvin Booth misinterpreted the Specifications and Contract Documents and added to the Booth Base Bid the sum of the Booth bids on each of the three Alternate Bids. 2/ This misinterpretation of the Specifications and Contract Documents was caused by the culpable negligence or willful inattention of Vincent Gerachi and Alvin Booth. After all of the bids were opened a representative of the District announced that the District would consider the matter and notify all bidders of its decision at a later date. Thereafter the District, having concluded that Booth Construction, Inc., had acted in good faith and that the irregularities in the form of its bid were "minor irregularities," decided to treat the oral statements by Mr. Gerachi and Mr. Booth as amendments to the Booth bid, to treat the Booth Base Bid as being $318,732, and to award a contract to Booth Construction, Inc., for the Base Bid and Alternate No. 1 in the amount of $372,804, calculated as follows: $318,732 (Amended Booth Base Bid) 54,072 (Booth Alternate No. 1 Bid) $372,804 (Total Contract) Booth Construction, Inc., has the ability to perform the contract and can perform the contract for the proposed contract amount of $372,804. Booth Construction, Inc., is a responsible bidder. The District estimate of the cost of the work covered by the Base Bid and Alternate No. 1 was $329,000. There are no irregularities in the bid submitted by Cox & Palmer Construction Company. Cox and Palmer Construction Company is a responsible and responsive bidder. The bid submitted by Cox & Palmer is the lowest responsive bid for the combination of the Base Bid and Alternate No. 1. 3/ The foregoing findings of fact include the substance of the majority of the findings proposed by the parties, although I have rejected a number of unnecessary details and editorial comments in the parties' proposals. Any proposed findings which are not incorporated in the foregoing findings are rejected on the grounds of not being supported by competent substantial evidence or as being contrary to the weight of the persuasive evidence.
Recommendation Based on all of the foregoing, I recommend that the South Florida Water Management District enter a Final Order to the following effect: Concluding that the irregularities in the Booth Construction, Inc., bid may not be waived and that the bid will be considered, as submitted, to be a Base Bid in the amount of $396,586; Concluding that in view of the foregoing treatment of the Booth bid, the bid of Palmer & Cox Construction Company is found to be the lowest responsive bid for the Base Bid plus Alternate No. 1; Concluding that the District will accept the bid of Palmer & Cox Construction Company and enter into a contract with Palmer & Cox Construction Company consistent with the amounts bid by Palmer & Cox Construction Com- pany for the Base Bid and Alternate No. 1; and Concluding that the petition of Overland Construction Company, Inc., is dismissed for lack of standing. DONE AND ORDERED this 9th day of July, 1985, at Tallahassee, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of July, 1985.
The Issue Whether Respondent, Department of Education's ("Respondent"), Notice of Intent to Award the contract for Request for Proposal No. 2005-01 ("RFP"), for Administration of the Florida Comprehensive Assessment Test ("FCAT"), is contrary to Respondent's governing statutes, rules or policies, or the bid or proposal specifications. Whether Respondent's proposed action was clearly erroneous, contrary to competition, arbitrary, or capricious.
Findings Of Fact On the evidence, it is found and determined that: I. The RFP and Stage I, II and III Evaluation Respondent issued the RFP on August 19, 2004, seeking competitive proposals for a contract for administration of the FCAT. Respondent's intent in this procurement is to contract with a qualified vendor who will be capable of performing the contract at the lowest possible cost to the State. This contract impacts all Florida public schools. The RFP included the following provisions regarding the general scope of the requirements and bidder responsibilities. 1.0 . . . A contract, if awarded, will be awarded by written notice to the qualified and responsive bidder whose proposal is determined to be most advantageous to the state, while taking into consideration price and other criteria specified by the RFP. 1.3 . . . This RFP defines the requirements for implementing the FCAT assessment program. The RFP and the selected contractor's proposal, together with clarifying documents, define the work to be conducted under contract. These documents will be incorporated into the contracts resulting from the FCAT project award. Because the FCAT assessment program is technical and complex, it is possible that a responsive proposal may not totally or clearly reflect RFP requirements in all details. If the proposal of a contractor selected as a result of the bidding process is inconsistent with the RFP, the requirements of the RFP prevail; the selected contractor will be expected to perform all RFP requirements without an increase in cost above the proposed cost. * * * 5.18 Acceptance of a Proposal The Department reserves the right, in its sole discretion, to waive minor irregularities in a proposal. A minor irregularity is a variation from the RFP that does not affect the price of the proposal, or give one bidder an advantage or benefit not enjoyed by other bidders, or adversely impact the interest of the Department. Waivers, when granted, shall in no way modify the RFP requirements or excuse the bidder from full compliance with the RFP specifications and other contract requirements if the bidder is awarded the contract. Rejection of Proposals Proposals that do not conform to the requirements of this RFP may be rejected by the Department. Proposals may be rejected for reasons that include, but are not limited to, the following: The proposal contains unauthorized amendments, either additions or deletions, to the requirements of the RFP. The proposal is conditional or contains irregularities that make the proposal indefinite or ambiguous. The proposal is received late. The proposal is not signed by an authorized representative of the bidder. The bidder is not authorized to conduct business in the State of Florida or has not included a statement that such authorization will be secured prior to the award of a contract. A bid bond is not submitted with the proposal. The proposal contains false or misleading statements or provides references that do not support an attribute, capability, assertion, or condition claimed by the bidder. The proposal does not offer to provide all services required by this RFP. Department Reservations and Responsiveness of Proposals The Department reserves the right to accept or reject any or all proposals received. 5.22 . . . In the event of conflict between the language of a proposal and the language of the RFP, the language of the RFP shall prevail. * * * 7.1 Stage I: Evaluation of Mandatory Requirements (Part I) During the Stage I evaluation, the Office of Agency Procurement and Contracting Services will determine if a proposal is sufficiently responsive to the requirements of this RFP to permit a complete evaluation. In making this determination, the Office of Agency Procurement and Contracting Services will evaluate each proposal according to the process described in this section. The RFP required prospective vendors to submit sealed proposals in two parts, a technical proposal and a price proposal. The technical proposals were reviewed and scored by an evaluation committee prior to opening of the sealed cost proposals. Failure of a bidder to meet every item on the Stage I list would not necessarily result in elimination of the proposal from consideration. A proposal would be eliminated only if it contained a material irregularity. "Stage I" of the process was identified in the RFP and is basically a check list of documents and commitments that are to be included with proposals. In accordance with Section 7.1, the purpose of the Stage I review is to determine whether the proposals are sufficiently responsive to be considered by the evaluation committee. Two of Respondent's employees opened the technical proposals and checked the proposals against the Stage I list to make certain "Mandatory Documents and Statements" required by Section 7.1 of the RFP were present. They did not make any substantive judgments about the extent of compliance. In performing this Stage I review, Respondent's employees followed the department's standard operating procedures. No scoring points were associated with the Stage I check list review. The technical portions of the RFP were categorized into two parts: Part II titled, "Bidder Qualification and Experience"; and Part III titled, "Technical Proposal for Administration." Bidders could receive a maximum of 50 points for Part II and a maximum of 50 points for Part III, a total maximum possible points of 100 for the technical proposals. The RFP is designed to ensure that only qualified, responsible bidders will be eligible for award of the contract. In order to be considered eligible, a bidder was required to receive a minimum of 70 cumulative points for the technical proposals. Each of the two parts of the technical proposals was broken down into ten categories or criteria. The RFP provided that an evaluation committee would assign scores from one to five, with five being the highest possible score, for each of the criteria. The RFP consists of approximately 200 pages of technical specifications, instructions, and guidelines including appendices and addenda issued after the original release date. Each of the bidders submitted technical proposals in excess of 400 pages. The RFP provided that evaluation of proposals would be based on a holistic approach so that the proposals could be scored based on consideration of the whole package proposed by the bidders without artificial limitations on the evaluators' ability to evaluate the entire proposal and score it accordingly. The evaluation process was designed to be as objective as possible, but a degree of subjective judgment is involved in the scoring of the proposals. The 20 scoring criteria for Parts II and III were designed to cover broad categories of qualifications against which the proposals were judged. Because of the holistic evaluation approach, there was no intent to evaluate proposals on the basis of an item-by-item determination. The committee evaluating the proposals was selected to include representatives familiar with various aspects of the FCAT, which were covered in the proposals. It also included a person not employed by Respondent as required by new procurement guidelines and also included a parent representative. The evaluation committee was selected so that each member brought a different expertise or perspective to the process. The evaluation committee was instructed on how the evaluation process was to be accomplished. The evaluators took their responsibility seriously and did a thorough job. For Part II, the rating scale ranged from five (excellent) to one (unsatisfactory). A score of five means the evaluator found that the bidder demonstrated superior qualifications and experience to perform the required tasks. A score of one meant the bidder demonstrated insufficient experience and capability to perform the required tasks or did not establish its qualifications and experience. The RFP stressed in bold typeface that "[t]he evaluation of Overall Bidder Qualifications and Experience will be completed by the proposal evaluation committee using 'holistic' ratings. Each proposal evaluation committee member, acting independently, will assign a single rating for each criterion identified in Appendix M." The "holistic" approach referenced in the RFP means that Respondent looks at the proposal as a whole. The RFP and the administration of the FCAT is very complex and the evaluators are not required to look at each component of the proposal, but are to judge the whole proposal. For Part III, the rating scale also ranged from five to one. The criteria for what merited a five or a one changed, however, from Part II. A score of five means that the bidder proposed superior solutions to the requirement of the RFP and has proposed products and services that are desirable for use in the FCAT administration program and are likely to create a high quality assessment program that meets sound psychometric standards that are clearly feasible to implement. A score of one under Part III means that the bidder proposed inferior or incomplete solutions to the requirements of the RFP or has proposed products and services that would be technically indefensible, would create a flawed assessment program not meeting psychometric standards, or would not be feasible to implement. Again, the RFP stressed in bold typeface that "[t]he evaluation of the Technical Proposal will be completed by the proposal evaluation committee using 'holistic' ratings. Each proposal evaluation committee member, acting independently, will assign a single rating for each criterion identified in Appendix N." The proposals were scored independently based upon the proposal's compliance with applicable RFP criteria; the proposals were not scored based upon how they compared to each other. Indeed, the evaluators were instructed not to discuss their scores so that each evaluator would establish their own internal criteria that was consistent across proposals. Although none of the proposals were deemed non- responsive in this stage, there are indications that failure to meet certain RFP requirements were noticed by the evaluation committed and scored accordingly. Stages II and III of the evaluation process took four days. Representatives of the bidders, including its attorney, attended all of the Stage II and III evaluation sessions. Documentation of Subcontractor Information. The RFP included the following specifications relating to documentation of subcontractors and printers. 4.6.1 Subcontractors The test administration contractor may choose to employ subcontractors for the completion of one or more tasks. If the bidder proposes to employ a subcontractor(s), the qualifications and experience of the subcontractor(s) will be documented in the proposal at the same level of detail as those of the bidder. A separate chart in the proposal will identify all of the subcontractors proposed to be involved in the project and the services they are expected to provide. All subcontractors must be approved by the Department. It is assumed that the contractor will use outside printers for some materials. Printers will be documented as subcontractors, and the management plan will identify the proportion of materials to be printed by the contractor and by outside vendors. Procedures for quality control and security during printing are to be described. Destruction of secure materials is addressed in Section 3.7.4. The contractor will assume responsibility for all services offered in the proposal whether or not they are performed or produced by the contractor or by subcontractors. The Department will consider the selected contractor to be the sole point of contact for contractual matters, including payment of any and all charges resulting from the contract. Other specifications in the RFP contained similar or identical language. The RFP also provided the following in Section 5.31 with respect to subcontractors: Any change of subcontractors must be approved in advance by the Department. In the event of poor performance by a subcontractor, the Department reserves the right to direct the contractor to replace that subcontractor. While Item 10 on Page 77 of the RFP required a representation from the vendors that they had identified all subcontractors and the amount of work to be performed directly by each subcontractor, the only investigation that Respondent undertook to confirm the accuracy of these statements was the Stage I evaluation. The Stage II and Stage III evaluators did not check to ensure that all of the subcontractors had been documented as required by the RFP. The RFP specifically required that all printers be identified and documented as subcontractors. Section 6.3 of the RFP requires the management plan to specifically identify the proportion of materials to be printed by outside vendors. Section 4.6.1 of the RFP on Page 53 states that if a bidder proposes to employ a subcontractor, the qualifications and experience of the subcontractors will be documented in their proposal at the same level of detail as the bidder. That section also provides that "printers will be documented as subcontractors." The timeliness, accuracy, and security of the printing operations are very important to the FCAT program; and the qualifications and experience of the printers, who would actually print the materials, is an important component of this procurement. As it relates to the "back-end" printing of the student and parent reports, there are privacy concerns that are particularly sensitive. The RFP provisions were included to ensure that, if a vendor was going to use outside printers for some of the activities, Respondent would be able to tell from the response who all of those printers were and what services they were going to perform. The RFP was drafted to ensure that Respondent was dealing with vendors who were qualified and experienced and able to deliver the products requested in the RFP. There were specific requirements in the RFP as to how the bidders were supposed to identify prior contracts, provide contact information, and document the printers who were going to do any of the actual printing. Section 6.2 on Page 74 of the RFP required that all vendors were to document contracted services for previous assessment projects similar to the one described in the RFP. For each of those projects, the documentation was supposed to include a description of the services and products delivered, the contract period, the name, address, and telephone of the contract person for each of the contracting agencies. This provision was applicable to all of the printers who were involved in this contract. The printers were also supposed to document how they were going to monitor security and provide quality control during the printing process itself. The intent of the RFP was to have bidders document who was going to do the printing, whether it was subcontractors, sub-subcontractors, or sub-sub-subcontractors. Section 5.27 on Page 65 of the RFP states that "if a bidder proposes to employ a subcontractor, the subcontractor's qualifications and experience will be documented in the proposal at the same level of detail as that of the bidder. Procedures for quality control and security of the work tasks performed by the subcontractors are to be described." These provisions are not discretionary. They are mandatory and require all vendors to provide a description of the quality control and security measures to be employed by all subcontractors, including the printers who must be documented as subcontractors. CTB's proposal identified The Grow Network as the entity that would be responsible for printing requirements. The Grow Network is an affiliate of CTB. CTB's proposal included documentation regarding The Grow Network's qualifications to perform the printing. In its response to the RFP, CTB provided extensive documentation and met all of the requirements of the RFP with respect to its front-end printers. Indeed each of those printers was identified in paragraph 10 of the transmittal letter that accompanied the CTB proposal. The Grow Network was also responsible for providing the back-end printing for the reports to be sent to the parents and students. The Grow Network was identified as doing 20 percent of the printing. However, the Grow Network does not actually do any printing themselves. At the hearing, the Grow Network claimed that it was the "print publisher" of the back-end reports. It stated that the Grow Network utilizes a "distributed printing approach." This, in fact, meant that the printing was going to be subcontracted out. The services that would be subcontracted out by the Grow Network include digital printing, collating, packing, distribution, and tracking. CTB's proposal states that GDS, a digital imaging company, will be the print facility utilized by the Grow Network to perform these aspects of the FCAT report printing requirements. CTB's proposal describes the corporate capabilities and experience of GDS, including descriptions of the California and New Jersey projects where GDS was utilized by the Grow Network as its print facility. The RFP also required bidders to provide examples of materials to demonstrate the quality of the work done on similar projects. Accordingly, CTB included sample reports printed by the Grow Network in conjunction with GDS, for the California and New Jersey projects. Notwithstanding the foregoing detailed documentation of both the Grow Network and GDS, Petitioner asserts that CTB failed to comply with the RFP because the CTB proposal indicates that much of the printing work will be out-sourced without disclosing who is actually going to be providing these services. However, CTB's proposal identifies only one printing facility, GDS, that will be utilized as the print facility under its distributed printing approach. CTB's proposal specifically states that "Grow currently uses GDS to support their California and New Jersey projects, and they will employ GDS' services for the Florida reporting project." CTB's proposal identifies other printing facilities, Delzer, R.R. Donnelley, and Bowne, that Grow could utilize on the FCAT with Respondent's approval. These other companies were potential "backup" printers, which were identified in case Respondent preferred using another printing facility. Otherwise, the Grow Network intended to utilize GDS as the sole printing facility on the FCAT and has a commitment from GDS to perform the tasks required. The RFP does not require commitment letters from subcontractors. The RFP required only the identification of the proposed printers, which could be changed with Respondent's approval. CTB has also indicated in its response that it will utilize 180 employees of Kelly Services, at three different locations, to supervise approximately 3,000 scorers. However, nowhere in the proposal has CTB documented Kelly Services as a subcontractor, nor provided information regarding their experience and qualifications to perform this work. CTB uses Kelly Services as a recruiting service provider. CTB is responsible for the hiring, training, and directing of the Kelly Services personnel and ultimately for the deliverables received from those employees. Kelly Services is not a subcontractor as contemplated in the RFP, because they are not held accountable for their deliverables. Accordingly, CTB's proposal is not deficient for failing to document Kelly Services as a subcontractor. Even if the failure to so document Kelly Services were a deficiency in CTB's proposal, the lack of detail would only lower CTB's score, not make it non-responsive. The Post-submittal Clarification Process. The RFP provided at Section 7.0 that each bidder would be required to make a presentation to the evaluation committee after the technical proposals were opened and that information presented or issues clarified during the presentation might affect the number of points an evaluation committee member assigned to a given proposal. On the first day of the evaluation process, the bidders were required to make separate oral presentations to the evaluation committee. Following those oral presentations, the evaluation committee was to begin the process of scoring the proposals based on the various RFP criteria. This was to be a "closed session" during which the vendors were not permitted to interact with the evaluation committee members; likewise, the evaluation committee members were not permitted to direct any questions to the vendors. RFP Section 7.0 spells out the rules and processes for conducting the oral presentations of the vendors. This includes the imposition of time limits on the presentations and questions from evaluators, which were to be strictly followed. Section 7.0 states, in pertinent part: The purpose of the presentation will be for the bidder to describe its offering of products and services and make any statements that will enhance understanding of its offering. The proposal evaluation committee will NOT evaluate the presentations or otherwise award points for the quality of the of the presentation. Information presented or issues clarified during the presentation MAY affect the number of points a proposal evaluation committee member assigns to a given proposal. . . . The presentation shall not exceed 30 minutes with an additional 15 minutes reserved for proposal evaluation committee member questions. These meetings will be open to the public; however, only members of the proposal evaluation committee may ask questions of the bidder. The above-quoted language in the RFP does not contemplate written submissions by vendors following the oral presentations. Nothing else in the RFP specifically authorizes vendors to clarify information in their proposals after the presentations have concluded. Thus, the oral presentation part of the evaluation process is the only RFP-authorized mechanism available to evaluators for seeking clarification of the proposals. Because clarifications are permissible during the vendor presentations, the RFP expressly states that such clarifications may affect scoring of the proposals. By contrast, nothing in the RFP authorizes the evaluators to seek or consider in scoring the proposals any vendor clarification made in any other form or at any other point, whether before or after the oral presentations. In fact, considering any information received from the vendors outside of the oral presentations would be inconsistent with RFP Section 5.3, which restricts communications by bidders with Respondent's staff. In short, to the extent a clarification of a proposal was needed, under the RFP, it should have been provided orally during the vendor presentations. Each of the bidders made a presentation to the evaluation committee. During the presentations, members of the evaluation committee asked bidders various questions relating to their respective responses to the RFP. One of the members sought clarification regarding the total number of full time equivalent ("FTE") hours for the persons identified in the proposals. Although the evaluation team was not given any specific standards or base lines to utilize in scoring the staffing and personnel commitments submitted by the parties, a bidders' commitment of personnel resources was an important factor for several of the criteria in the RFP. The bidder representatives for CTB and Petitioner were not able to provide the requested FTE information at the time of the presentation. Harcourt's representatives, who had had the benefit of hearing the presentations made by Petitioner and CTB, were able to answer the FTE question at the presentation. Because the evaluators had lingering questions on staffing, Respondent made a decision to send out questions to two of the three vendors following completion of the oral presentations. No scoring was done on any of the proposals prior to the time Petitioner's and CTB's responses were presented to the evaluators. At least some of the evaluation committee members felt that the staffing information was critical. The questions were not based on the presentations by the vendors, but were based on the evaluation committee members' concerns that had not been resolved by the oral presentations. The questions reflected areas that the evaluators were not able to understand from the initial proposals submitted. After the presentations, Respondent delivered letters dated August 30, 2004, to Petitioner and CTB, but not to Harcourt, asking them to provide the requested FTE information by the following day. CTB and Petitioner both promptly provided the information requested. CTB's August 31, 2004, written response to the FTE question included a chart that identified all personnel and the associated FTEs that would be assigned to the project. This FTE chart was prepared by Diane Driessen, CTB's senior program manager who was one of two CTB employees primarily responsible for preparing CTB's response to the RFP. As a format for its written response, CTB utilized the existing chart for Professional Personnel Responsible for Major Contract Activity (Figure 9), which was in its proposal. CTB added to this chart the additional personnel to reflect the total FTEs for the project as a whole. CTB took the material in the proposal and presented it in a consolidated format. CTB combined the monthly activities by program chart, which was Table 9, with the key personnel chart, which was Figure 9, and handscoring resources presented in the proposal. The additional named personnel in its response were not named in the original figure of key personnel because they were not considered responsible for major contract activities. It was an oversight that the chart still retained the heading, "Time Task Chart for Key Project Personnel" when it actually reflected the 330 total FTEs for the whole project team as requested by Respondent. The cover letter to Respondent explained that CTB was listing all personnel, not just "key personnel." All of the unnamed persons added to the chart are identified by position in the original proposal. As part of its written response to Respondent's written requests for additional information, CTB also included a written recap of the questions and answers from its oral presentation. The evidence demonstrated that the information provided by CTB after receiving Respondent's staff's questions included corrections of errors contained in CTB's initial response to the RFP. This information was presented to the evaluators for them to review and consider in the scoring process. No one from Respondent made an analysis to determine whether the information in the supplement was contained in the original proposal before it was presented to the evaluators. The RFP also required the vendors to provide all required information by the deadline that the proposals were to be received. Respondent was obligated to follow these provisions and not accept any information in a manner inconsistent with them. In addition, bidders were required to commit to complying with all requirements of the RFP if awarded the contract: 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 materials, supplies or equipment, 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. . . . The supplemental information submitted by CTB should have been included in CTB's initial submittal. The fifth bullet point of Section 4.6.2 of the RFP on Page 54 required bidders to indicate by name the professional personnel to be responsible for major contract activities with an estimation of the amount of time and full-time equivalencies each person was going to devote to the tasks under the contract. The proposal was also supposed to include a vitae for all such professional personnel. This bullet point was not limited to only those who had a supervisory role. It was the intention of the bullet point that the individuals should be identified by name, including software development staff. Much of CTB's software development staff was not identified by name in its initial response, but they were identified in the supplement. The RFP required vendors to provide the total time commitment for key personnel in the initial submission and required that the bidders identify by name the professional personnel to be responsible for major contract activities. The time commitment for some of the key project personnel that CTB identified in its initial proposal were significantly "revised" in its supplement. These "revisions" purportedly correct "errors" in the initial response and include changes to the time commitment for "key project personnel," including the project manager for manufacturing, senior research scientists and the scoring director for one of the major scoring sites. There are six new names that appear in CTB's supplement, as well as numerous revisions to the time commitment of key personnel. In its written questions to the vendors, Respondent did not request any revisions or corrections of error with respect to any of these key personnel. The evidence is clear that there are "revisions," corrections of errors and significant reformatting that were tailored to address lingering concerns of the evaluators. CTB's supplemental proposal also included a new chart broken down with many different allocations of days that did not appear anywhere in the original proposal. This submittal also included a number of different "to be assigned" categories that were not specifically included on the chart in the initial submittal and a re-categorization of some of the positions. The evaluation committee members would not have had enough time to make an assessment as to whether that information was in the original proposal. Had CTB not provided its supplemental information, the evaluation team would have had a significantly different view point on CTB's staffing. After the oral presentations, Petitioner also received a written question regarding staffing from Respondent. Petitioner's response was a listing of the FTEs taken from the charts already contained in the original proposal. Petitioner was concerned with the procedure that was being implemented, but after seeking advice of counsel, submitted the response nonetheless. Harcourt was not given this opportunity. RFP Section 5.16 does not address proposal clarifications, but it does impose limitations on the consideration of proposal "amendments." Section 5.16 states that, absent a specific request by Respondent, any "amendments, revisions, or alterations to proposals will not be accepted after the deadline for the receipt of proposals." In addition, Section 5.16 does not address when, during the evaluation process, Respondent may request a vendor to amend a proposal. This timing issue is only addressed by statute in Subsection 120.57(3)(f), Florida Statutes (2004), which states that "no submissions made after the bid or proposal opening which amend or supplement the bid or proposal shall be considered." However, the timing of when Respondent could request a proposal amendment under Section 5.16 is not at issue in this case. Respondent acknowledges that it made no such request in this case. Absent a specific request, Section 5.16 precluded Respondent from considering any amendment to a proposal offered by any vendor. CTB's written responses to Respondent's written questions amount to a clarification of their bid proposal, since then were submitted only after Respondent requested the information. The responses do not constitute an amendment or supplement to the proposal. The Evaluation Process Immediately following the bidders' oral presentations and receipt of the bidders' responses to the evaluators' questions, the evaluation committee met as a body and reviewed each of the proposals. Dr. Orr and Dr. Melvin were co-chairpersons of the committee and facilitated the evaluation committee review of the technical proposals. They did not participate in the actual scoring of proposals. The evaluation committee reviewed the three proposals consecutively, evaluating them against the criteria in the RFP. Open discussion about the criteria and the locations within the proposals where criteria were addressed was encouraged and took place. Whether one bidder was slightly better than another bidder was not the basis for determining the contract award. The RFP provided a balanced formula that sought to ensure the competency of the awarded by requiring a minimum technical score of 70 while rewarding the competent bidder that submitted the lowest price. In accordance with the RFP, the evaluation committee assigned holistic ratings to the technical proposals, judging them based on the quality of the proposals as a whole. Each evaluator independently scored the proposals by assigning a score from one to five for each of the 20 criterion in the RFP. The evaluation committee did not compare the proposals to each other. The evaluation committee completed the evaluation of the first proposal before considering the second proposal and completed the evaluation of the second proposal before completing the evaluation of the third proposal. Alternative Proposals. The RFP permitted bidders to propose alternative approaches for meeting Respondent's objectives, but provided that no cost savings or increases for alternative proposals could be referenced in the technical proposal. Any cost savings or increases for alternative proposals were required to be submitted in a separately sealed package and clearly labeled. None of the bidders included any reference to cost savings or increases in their technical proposals. Petitioner's proposal clearly marked its alternatives. CTB sometimes identified its alternatives with a special marker and sometimes simply described them within the text of the RFP. Harcourt generally did not clearly designate its alternatives. During the Stage II and III evaluation process, a committee member raised a question regarding assigning points for alternative proposals. Because the RFP did not provide a mechanism for evaluating the alternatives, an internal decision was made by Respondent not to consider the alternatives at all in connection with scoring the proposals. The members of the evaluation team were told to disregard the references to alternative proposals submitted by each of the bidders. There was no provision in the RFP that was relied upon in making that determination. The evaluators were given no guidance as to which provisions of the various proposals should not be considered. This led to inconsistencies in what was treated as an alternative and not scored, versus what was treated as part of the base proposal and scored. It is clear that the decision not to consider alternatives resulted in confusion and inconsistency in the evaluation process. For example, one evaluator, Clarence Reed, indicated that if a proposal went beyond the requirements of the RFP and offered something that was not required, but was an enhancement, he viewed that as an alternative and would not have considered it. Similarly, the chairperson of the evaluation committee and one of the facilitators for the evaluation process, Dr. Orr, testified that "enhancements" should not have been considered. By contrast, most of the evaluators viewed offerings by vendors that went beyond the requirements of the RFP and did not include a cost to Respondent as "enhancements" that could be considered in their evaluation of the proposals. Likewise, Dr. Melvin, one of Respondent's facilitators for the evaluation team, believed that an "augmentation" was not the same as an "alternative." Thus, in many instances, when a vendor offered something beyond the requirements of the RFP, at no cost to Respondent, and did not identify it as an "option" or "alternative," it was considered in the scoring by at least some of the evaluators. The evidence is clear that there are portions of the proposals submitted by Harcourt and CTB that was essentially the equivalent of no cost "alternatives" that were considered by the evaluators while Petitioner's clearly identified "alternatives" were not. In sum, whether a particular proposal was an "augmentation," "option," "alternative" or an additional clarification created confusion among the evaluators. As a result, there was no consistency in terms of what the evaluators could consider in the proposals and what they could not consider. While it is impossible to quantify the exact impact of the decision not to consider alternatives, it is clear that Petitioner's bid received a disproportionate negative impact because many of its important enhancements, which were being offered to Respondent at no cost were listed as "alternatives" and never factored into the evaluation process. There were several alternatives proposed by Petitioner that would have been enhancements to the current program and would have been made available at no cost to Respondent. Thus, Petitioner's score was artificially influenced in a negative way. By contrast, the evidence is clear that CTB and Harcourt, in many instances presented different ways to accomplish tasks without specifically utilizing the term "alternative" or "option" and such matters were factored into the evaluation. The claim by Respondent and CTB that the decision not to consider alternatives was applied even-handedly is not supported by the evidence. Because there was not a consistent manner in which the various companies presented their "enhancements," "augmentations," "options" or "alternatives," Respondent's determination to exclude consideration of "alternatives" precluded the evaluators from fairly determining what each of the vendors could actually provide to the program. It also meant that the vendors were not evaluated on an equal footing. Thus, the decision was contrary to the bid specifications. In spite of these concerns, the preponderance of the evidence does not demonstrate that Respondent's instruction to evaluators not to consider alternatives rendered the proposed agency action clearly erroneous, contrary to competition, and/or arbitrary and capricious because Respondent was not obligated to accept any of the alternatives offered by a bidder. The Price Proposals. Respondent's evaluation of the three bidders' proposals established that each of the bidders was capable and qualified to perform the work under the contract. The bidders' price proposals remained sealed until after the evaluation committee completed its scoring of the technical proposals. The price proposals were evaluated based on a formula that awarded 50 points to the bidder with the lowest price. The remaining bidders received points based on a proportion or ratio that compared their price to the low bidder's price. The RFP provided at Section 7.4, Page 82, in pertinent part: A total of 50 points will be awarded to the lowest acceptable Cost Proposal. Proposals with higher costs will receive the fraction of 50 points proportional to the ratio of the lowest proposal cost to the higher cost proposal. The fractional value of points to be assigned will be rounded to one decimal place. For example, if the lowest responsive cost were $50,000.00, the bid would receive 50 points. If the next lowest responsive cost proposal were $75,000.00, it would receive 33.3 points. If the highest responsive cost proposal were $100,000.00, it would receive 25 points. Upon opening the three bidders price proposals, it was determined that Petitioner's bid for the base and renewal period was $224,969,699; Harcourt's bid was $167,055,970; and CTB's bid was $140,107,439. On September 23, 2004, Respondent posted a Notice of Intent to Award the contract for the FCAT administration to CTB. The posting showed the final scores of the three vendors as follows: Proposers Mandatory Bidders Technical Total Cost Total Requirement Qualifications/ Quality Points Proposal Points Met Experience Stage III (Stages Stage IV Stage Stage II II&III) V Pearson Yes Educational Assessment 44.6 44.3 88.9 31.4 120.3 Harcourt Yes 42.7 42.2 84.9 42.4 127.3 CTB/McGraw Yes Hill 43.8 44.9 88.8 50 138.8 CTB's price for performing the contract over a five-year period is approximately $85 million less than the price proposed by Petitioner and approximately $27 million less than the price proposed by Harcourt. Over a three year contract period, CTB's price for performing is approximately $53 million less than the price proposed by Petitioner and approximately $14 million less than the price proposed by Harcourt.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commissioner of the Department of Education adopt this Recommended Order and enter an final order awarding the contract for RFP No. 2005-01 to the low bidder, CTB/McGraw-Hill, LLC. DONE AND ENTERED this 8th day of February, 2005, in Tallahassee, Leon County, Florida. S DANIEL M. KILBRIDE Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 8th day of February, 2005. COPIES FURNISHED: J. Stephen Menton, Esquire Rutledge, Ecenia, Purnell & Hoffman, P.A. 215 South Monroe Street, Suite 420 Post Office Box 551 Tallahassee, Florida 32301 Cynthia S. Tunnicliff, Esquire Pennington, Moore, Wilkinson, Bell & Dunbar, P.A. 215 South Monroe Street, Second Floor Post Office Box 10095 Tallahassee, Florida 32302-2095 Donna E. Blanton, Esquire Radey, Thomas, Yon & Clark, P.A. 313 North Monroe Street, Suite 200 Post Office Box 10967 Tallahassee, Florida 32302 Jason K. Fudge, Esquire Florida Department of Education 1244 Turlington Building 325 West Gaines Street Tallahassee, Florida 32399-0400 W. Robert Vezina, III, Esquire Vezina, Lawrence & Piscitelli, P.A. 318 North Calhoun Street Tallahassee, Florida 32301-7606 Daniel J. Woodring, General Counsel Department of Education 1244 Turlington Building 325 West Gaines Street Tallahassee, Florida 32399-0400 Lynn Abbott, Agency Clerk Department of Education Turlington Building 325 West Gaines Street, Suite 1514 Tallahassee, Florida 32399-0400
Findings Of Fact Petitioner, J. D. Pirrotta Company (JDP), is a general contracting company located in Orlando, Florida. JDP has bid on projects involving construction of schools or educational facilities, including projects for Valencia Community College. Respondent, District Board of Trustees of Valencia Community College, is the governing body of the community college, with the authority to award contracts. Valencia Community College (VCC), in Bid #90/91-06, advertised for sealed bids for interior remodeling and renovation of existing buildings' modules 3 and 5, on its west campus on South Kirkman Road, in Orlando, Florida. The sealed bids were due at or before 2:30 p.m., on December 13, 1990, in the purchasing department of VCC, 190 South Orlando Avenue, Suite 402B, Orlando, Florida 32801. The Invitation to Bid includes a voluminous project manual containing instructions to bidders, various forms, a standard contract text and detailed specifications. A separate bid packet contains the set of drawings for the construction work. The advertisement of the Invitation to Bid, and Section 00100 of the Project Manual, Instructions to Bidders, paragraph 14A, reserve for the owner the right to reject any or all bids and to waive any and all "informalities". (Respondent's Exhibits #1 and #2) Section 00100, Instructions to Bidders, paragraph 18, provides: 18. SUBCONTRACTORS, ETC. The bidders at bid date shall submit to Owner a list of all subcontractors and other persons and organizations (including those who are to furnish the principal items of material and equipment) proposed for those portions of the work as to which such identification is so required. Such list shall be accompanied by an experience statement with pertinent information as to similar projects and other evidence of qualifications for each such subcontractor, person and organization if requested by Owner. If Owner, after due investigation has reasonable objection of any proposed subcontractor, other person or organization either may, before giving the Notice of Award, request the apparent successful bidder to submit an acceptable substitute without an increase in bid price. If the apparent successful bidder declines to make any such substitution, the contract shall not be awarded to such bidder, but his declining to make any such substitution will not constitute grounds for sacrificing his bid security. A subcontractor, other person or organization so listed and to whom Owner does not make written objection prior to the giving of the Notice of Award, will deemed acceptable to Owner. Should the subcontractors list be revised, for any reason, architect and Owner shall be immediately notified. (Respondent's Exhibit #2) Paragraph 9, Section 00300, the bid form, provides: The following documents are attached to and made a condition of the Bid: Required Bid Security in the form of a Bid Bond. A tabulation of subcontractors and other persons and organizations required to be identified in this Bid. Required Bidders Qualification Statement with supporting data. (Respondent's Exhibit #2) Section 00700, the Public Entity Crimes statement form, includes these instructions: Any person responding with an offer to this invitation must execute the enclosed Form PUR 7068, SWORN STATEMENT UNDER SECTION 287.133(3) (a), FLORIDA STATUTES, ON PUBLIC ENTITY CRIMES and enclose it with your bid. If you are submitting a bid on behalf of dealers or suppliers who will ship and receive payment from the resulting contract, it is your responsibility to see that copy/copies of the form are executed by them and are included with your bid. Failure to comply with this condition shall result in rejection of your bid. (Respondent's Exhibit #2) The Instructions to Bidders and the drawings include a total of ten deductive alternatives to be addressed in the bids, to afford VCC some flexibility in the event the base bid might be higher than the agency's available funds. In response to the advertisement and request for sealed bids, VCC received bids from the following seven contractors: Seacoast Constructors and Consultants; JDP; Southland Construction, Inc.; Harbco, Inc.; Technical Design Systems, Inc.; Hembree Construction, Inc.; and Waltree Construction, Inc. The bids were opened publicly and read aloud beginning shortly after the submittal deadline on December 13, 1990. Jack C. Crawford, Vice-President for Administrative Services, and Stephen Richard Childress, Purchasing Manager, participated in the bid opening on behalf of VCC. Seacoast Constructors was the lowest bidder, at $1,274,000.00, base bid; JDP was the second lowest bidder, at $1,297,000.00, base bid. None of the bidders submitted bids containing all of the requested or required information. None of the bidders included a deduct alternative requested by Drawing E-10, General Notes number 2. Only JDP included the deduct alternative requested by Drawing E-6, General Notes number 2. Seacoast Constructors and Consultants failed to include Form PUR 7068, Public Entity Crimes statement, with their bid, but it executed and submitted the form to VCC on December 13th, the date of the opening. Two of the bidders, JDP and Harbco, failed to submit subcontractor lists with their bids. At the time of hearing, JDP had still not submitted its list. For this project the low base bid is within VCC's available funds, and it does not intend to rely on any of the deduct alternatives in the bids. Following the bid opening, the bid tabulation form was posted on a bulletin board in the administration building. A copy of the tabulation form was also placed in a folder which includes recommendations on other bids and which is maintained at the desk of the security guard outside the room where the bids are opened. Inside the front cover of the folder, in the bottom left hand corner, is a small typewritten statement: Failure to file a protest within the time described in S. 120.53(5), Florida Statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes. There is no evidence of any other notice of section 120.53, F.S. remedies to bidders, including in the advertisement or in instructions to bidders. JDP filed a written bid protest in a letter dated December 13, 1990 and received on December 14, 1990. The letter clearly states that it is a formal protest, pursuant to Section 120.53(5), F.S. It argues that bids submitted by Seacoast Constructors and others were unresponsive and should be rejected for failure to include the Public Entity Crimes Statement, for failure to bid on a deduct alternative, and for other reasons (immaterial, because they apply to higher bidders). The protest letter requested award to JDP. JDP met with representatives of VCC to attempt to resolve the protest. At the meeting, Joseph Pirrotta was informed that his bid was considered nonresponsive because it failed to include a subcontractors' list. The meeting did not resolve the matter, and on December 19, 1990, Joseph Pirrotta sent a follow-up letter arguing that the text of the bid instructions only require a subcontractors' list for "...portions of the work as to which such identification is so required", and nowhere in the bid packet was any reference to which were required. JDP considered that the subcontractors' list was, therefore, unnecessary. The December 19th letter also reiterated JDP's request to reject the other bids and to award the contract to JDP. The December 13th and 19th letters are the only written protests by JDP. VCC has previously awarded contracts to bidders who failed to submit a Public Entity Crimes Statement with their bid. It considers such failure an "informality" subject to waiver. It considers failure to submit a list of subcontractors an economic advantage with respect to other bidders. Representatives of VCC have recommended to its board that the contract be awarded to Seacoast Constructors, the lowest bidder.
Recommendation Based on the foregoing, it is hereby, RECOMMENDED That the District Board of Trustees of Valencia Community College enter its final order awarding the contract in Bid #90/91-06 to Seacoast Constructors and Consultant, and rejecting the protest of J.D. Pirrotta Company. DONE AND RECOMMENDED this 25th day of February, 1991, 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 25th day of February, 1991. COPIES FURNISHED: Leslie King O'Neal, Esquire P.O. Drawer 1991 Orlando, FL 32802 Jeffrey S. Craigmile, Esquire Brian P. Kirwan, Esquire 390 N. Orange Ave., Ste. 2180 Orlando, FL 32801 Jack C. Crawford Vice President Administrative Services Valencia Community College P.O. Box 3028 Orlando, FL 32802
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Background In September 1992, respondent, Jacksonville Transportation Authority (JTA), issued Invitation to Bid No. CF-0310-92 (ITB) inviting contractors who held certificates of prequalification to bid on Department of Transportation (DOT) projects to submit proposals for performing construction work on 1.6 miles of State Road 9A in Duval County, Florida. The contract to be awarded was the third contract of three contiguous construction projects on State Road 9A and was commonly known as contract 3. It was to be completed within twenty-four months. Essentially, the work involves the widening of that road from two to four lanes, and adding connector ramps, a median, and other associated improvements. The project is more specifically identified as project number 72002-3533. The ITB called for sealed bids to be filed no later than 2:00 p.m. on September 23, 1992, with an award of the contract to be made to the lowest responsive bidder at JTA's meeting on September 29, 1992. The ITB provided further that "the right is reserved (by JTA) to reject any and all bids." A total of six contracting firms filed bids in response to the solicitation. They included petitioner, Hubbard Construction Company (Hubbard), and intervenor, Petticoat Contracting, Inc. (PCI), both of whom were prequalified. Hubbard is a large construction firm headquartered in Orlando, Florida, and has been in the construction business for some seventy years. In 1992 alone, it bid on more than 300 jobs and did approximately $180 million in business. Conversely, PCI is a much smaller firm headquartered in Jacksonville, Florida, with approximately forty-five employees. It has been in business for almost seven years and is minority (female) owned and operated. Hubbard was the lowest dollar bidder with a bid in the amount of $6,257,722.38, while PCI was the second lowest bidder with a bid in the amount of $6,270,121.43, or approximately $12,400.00 higher than Hubbard. After the bids were opened, they were evaluated by JTA's engineering consultant, Sverdrup Corporation, a Jacksonville engineering firm. Concluding that Hubbard's bid was "unbalanced" in several material respects and thus was irregular, the consultant recommended that the contract be awarded to PCI, the second lowest bidder. This recommendation was concurred in by JTA's staff and was presented to JTA at a meeting held on September 29, 1992. After a discussion regarding the bid proposals, including consideration of comments from Hubbard and PCI representatives, JTA voted to award the contract to PCI. Hubbard then timely filed its protest. In its protest, Hubbard generally contended that JTA had erroneously determined that Hubbard's bid was unbalanced, and by doing so, JTA had imposed upon Hubbard a bid requirement not encompassed within the ITB. It also contended that under the standard used by JTA, all other proposals, including that of PCI, were unbalanced. Finally, the protest argued that PCI was not actually a disadvantaged business enterprise and thus should have been required to furnish documentation concerning its compliance with minority subcontractor requirements. As to this latter contention, no proof was submitted at hearing, and thus no discussion of that allegation is required. The ITB Requirements JTA has its own set of specifications that were distributed to each of the bidders on the project. Among other things, the ITB provided that "(a)ll work is to be done in accordance with the Plans and Special Provisions, and the Standard Specifications of the State of Florida Department of Transportation." The latter reference was to the 1991 edition of the Standard Specifications for Road and Bridge Construction used by DOT. Those specifications are included in the ITB because JTA must build its roads and bridges to state road specifications. In this regard, article 2-6 of those specifications provided in relevant part as follows: A proposal will be subject to being considered irregular and may be rejected if . . . it shows irregularities of any kind; also the unit prices are obviously unbalanced, either in excess of or below the reasonable cost analysis values. The ITB also contained an Appendix A which included supplemental specifications to accompany the DOT document. However, it did not modify article 2-6. The ITB further contained a section entitled Special Provisions which represented "modifications and additions to the corresponding Articles" in DOT's Standard Specifications and the supplemental specifications set forth in Appendix A. Again, article 2-6 was not changed but section 4-1 of the Special Provisions, which constitutes an addition to DOT's specifications, provided that all items which are constructed or installed will be paid for at the unit price bid regardless of the total quantity utilized. Unit prices shall represent the actual costs and profit earned for labor, equipment and materials used in completing the unit of work bid. Therefore, the DOT standard specifications, and specifically article 2-6, were controlling on this contract. In construing the foregoing provisions, JTA considers a bid item to be "irregular" when it is far higher or lower than the engineer's estimate and the average of the other bids. When an irregularity is discovered in a bid, a decision is then made as to whether the irregularity is material or significant in terms of its affect on the competitive process and ensuring that no bidder receives a substantial advantage over other bidders. The potential effect of any irregularity on JTA's interest is also considered in deciding whether the irregularity is material such that the bid should be rejected pursuant to article 2-6 of the specifications. In conjunction with the above analysis, JTA compares the other contractors' bids with the engineer's estimate, and if they are closely approximated, it deems the estimate to be accurate. Conversely, where the average bids and the estimate are not close, JTA concludes that the estimate may be erroneous. It is noted that the consultant relies on the DOT specifications and DOT's historic pricing methods when preparing his estimates. The ITB called for each bidder to submit a unit price for each component of work required under the contract. This required each bidder to estimate the cost for providing services for more than one hundred sixty items, including item 110-1-1 (clearing and grubbing), item 102-2 (topsoil), and item 715-91-120 (high-mast lighting poles), which items are of particular concern in this controversy. The amount of the bid upon which award of the contract was to be based equaled the sum of the prices for the listed items. Item 110-1-1 is a lump sum item, rather than work on a per unit basis, and required the contractor to clear and grub 79.489 acres of land. This work is done at the outset of the project and is generally completed within the first ninety days of the job. Item 102-2 involved the placement of 120,041 square yards of topsoil on the embankments which was to serve as a layer for seeding the grass. However, the parties agree that the contractor had the choice of using either topsoil or a muck blanket extracted from the job site through excavation. If the latter option was chosen, this would eliminate the need to procure topsoil from off-site. Even so, to avoid the possibility of a change order by the contractor, which had occurred on several earlier projects, JTA expected the contractor to estimate his actual cost for topsoil as if the topsoil was to be obtained from off-site. The final disputed item required the contractor to furnish and install fifteen 120-foot street lighting poles. Bidders were required to give a price for a single pole and then multiply that price times the estimated quantity that would be required. This work is generally completed during the last phase of the job. The Submissions As noted earlier, six contractors filed bids in response to the ITB with prices ranging from a low of $6,257,722.38 by Hubbard to a high of $6,997,656.41 by the highest bidder. Hubbard proposed to complete the job in thirteen months even though the ITB allowed twenty-four months while PCI intended to use the full amount of time. As to the three items in dispute, the record reflects the engineer's estimated cost, Hubbard's cost, PCI's cost and the average cost for all bidders excluding Hubbard were as follows: Item Estimated Cost Hubbard PCI Average costs 110-1-1 $150,000.00 $545,000.00 $176,600.00 $147,100.14 102-2 33,011.28 1,200.41 82,828.29 71,064.27 715-91-120 180,000.00 25,500.00 204,750.00 199,701.54 In preparing its bid, Hubbard assumed that the DOT standard specifications would be interpreted and supplied in conformity with DOT's historical interpretation. Therefore, Hubbard prepared its bid in the same manner as it always had, including prior JTA submissions, and this resulted in the above deviations from estimated and average costs for the following reasons. Hubbard obtained a copy of the plans and specifications approximately two weeks before the date for filing its bid and then assigned a team of estimators to prepare the numbers in the bid package. Because several items are subcontracted out, including grassing, striping and electrical work, Hubbard had to wait until the subcontractors returned their prices before it knew the actual cost of those services. As is true in almost every case, the subcontractors did not furnish their prices until the final day or hour. Hubbard was reluctant to leave those items blank until the last moment fearing it would be difficult for the persons filing the bid in Jacksonville to complete the lengthy proposal before the deadline, and an error might be made by them in their haste to change the prices on multiple items for which they received price quotations in the last hour. Accordingly, in filling out the items on which subcontractors would be used, Hubbard used its best estimate of the subcontractor prices based upon its prior experience on other jobs. However, to allow for variances that might occur between the actual subcontractor prices and the estimated prices, Hubbard left blank one lump sum item so that this item's estimated cost could be adjusted up or down at the last moment depending on the other variances. In this way, the total amount of the bid would not change. As it turned out, there were variances in twenty to thirty items which were based on subcontractor prices, with one item (high mast lighting poles) coming in substantially higher than originally estimated. As noted above, Hubbard did not change the estimated subcontractor prices but rather calculated the difference between its estimate and the actual subcontractor prices and added that number to the lump sum price for clearing and grubbing. This resulted in increasing the cost for clearing and grubbing from an actual cost of around $150,000.00 to $545,000.00 while the estimated cost for fifteen high mast lighting poles ($25,500.00) was substantially below its actual cost of more than $170,000.00. According to Hubbard, it follows this practice on virtually every bid document it prepares, including those filed with JTA, and has never had one rejected on the ground certain items were materially unbalanced. Testimony that these preparation procedures are standard in the industry and enable contractors to give the public the best possible prices by allowing for last minute changes while protecting against error was not contradicted. In preparing its topsoil estimate, Hubbard determined that the anticipated muck and subsoil excavation would eliminate the need to procure topsoil from off-site. Therefore, it proposed a cost of only one cent per square yard for adding topsoil to the embankment on the theory that no topsoil would be procured from off-site. Because Hubbard's computer would not take a zero cost, and the cost was already included in the embankment charges, Hubbard put the next lowest price, or one cent, as the cost for topsoil. The final relevant item, high mast lighting, was to be subcontracted out to a specialty contractor. Hubbard originally estimated a cost of $1,700.00 per pole for fifteen poles, or a total cost of $25,500.00. At hearing, Hubbard conceded that this estimated cost was either a mistake on the part of the person filling out the proposal or "a mistake of judgment" by an estimator, and that its actual costs were substantially higher. However, it felt that there was no disadvantage to JTA by preparing its bid in that manner. In its proposal, PCI used a cost of $176,000 for clearing and grubbing, 69 per square yard, or a total cost of $82,828.29, for topsoil, and $13,650 for each high mast lighting pole, or a total cost of $204,750.00. These estimates did not substantially deviate from the bidders' average or the engineer's estimated costs. As to the topsoil item, PCI also intended to use muck excavated from the job site in lieu of topsoil. However, it was not sure that the amount of muck excavated would be adequate, and thus it estimated the amount of topsoil that would be required if the soil was obtained off-site, added a component for overhead and profit, and arrived at a total cost of 69 per square yard. Finally, PCI's estimated cost for pile splices, mobilization, maintenance of traffic and prestressed concrete beams were unbalanced to some degree and constituted a violation of section 4-1. However, these variances were relatively minor in nature and were not material. The Evaluation Process JTA utilized the services of an outside engineering firm to serve as consultant on the project. Immediately after the bids were opened, the consultant's duties were to verify that certain basic requirements were met and that the contractor had the capacity to perform the work. He was also required to prepare a bid tabulation listing the contractors' estimates with the engineer's estimate and to determine if any irregularities were present. A recommendation would then be submitted to the JTA staff regarding the award of the contract. The staff was also required to review the bids and to make a recommendation to the JTA. During the course of his evaluation of Hubbard's bid, the consultant noted a marked variance between estimated costs for clearing and grubbing of $150,000.00 and Hubbard's price of $545,000.00, particularly since the average cost of all other bidders was $147,100.14. He next noted the proposed cost for high mast lighting poles ($25,500.00) and found it to be "extremely low" in relation to the engineer's estimated price ($180,000) and the average cost of almost $200,000.00 submitted by the other bidders. In addition, he found the engineer's estimated cost for topsoil of $33,011.28 to be much higher than Hubbard's proposed cost of $1,200.41, especially since the other bidders averaged $71,064.27. Finally, the consultant conducted a similar review of PCI's proposal, and while he found some irregularities in its bid, he did not consider them material. Thereafter, in a letter to JTA's executive director on September 28, 1992, the consultant noted that: Upon examination of the bids, it became evident that some of Hubbard Construction Company's unit prices are unbalanced. Item No. 110-1-1, Clearing and Grubbing, is a lump sum item and is one of the first pieces of work to be performed in this project. Hubbards' bid amount is $545,000.00. The engineer's estimate is $150,000.00 and the average of all other bidders is $147,000.14. Item no. 715-91-120, High Mast Lighting Pole Complete (Furnish and Install)(120'), also appears to be unbalanced. This work would be performed near the end of the contract. Hubbard's bid amount is $25,500.00. The engineer's estimate is $180,000.00 and the average of the other bidders is $199,701.54. Hubbard's bid amount will not cover the cost of the materials required of this item based on reasonable expected costs. Both of the items are in contradiction to Section 4, Article 4-1 which states "Unit prices shall represent the actual costs and profit earned for labor, equipment and materials used in completing the unit of work bid." Item 102-2, Topsoil, shows an inconsistency. Hubbard's bid amount is $1,200.41. The engineer's estimate is $33,011.28 and the average of the other bidders is $71,064.27. Based on the results of the bid review noted above, it is recommended that Hubbard Construction Company's bid proposal be considered irregular as per Article 2-6 of the Standard Specifications, and therefore rejected. A similar evaluation process was subsequently conducted by the JTA staff, and it reached the same conclusion as the consultant. Its recommendation to reject the bid of Hubbard on the ground the bid was "irregular as per Article 2-6 of the JTA Standard Specifications" and to award the contract to the second lowest bidder, PCI, was conveyed by memorandum to the JTA Highway Committee on September 29, 1992, and was approved by JTA the same date. Was the Agency's Action Arbitrary? JTA's conclusion that Hubbard's bid was materially unbalanced and irregular and thus violated article 2-6 was based on two principal concerns. First, JTA considered the adding of nearly $400,000.00 in costs to clearing and grubbing to be "front-end loading" and thus improper. This means the bid was structured so that a large amount of money, not commensurate with the amount of work actually performed, would be paid at the beginning of the project. In this case, clearing and grubbing would be completed within the first ninety days of the project yet Hubbard would receive almost $400,000.00 in excess of its actual costs to perform that work. JTA believed that this would reduce its control over the performance of the contract, it would be unfair to other bidders on the project, the money would be used to finance other portions of the work, and the possibility existed that Hubbard might not complete performance on the job after being paid the up-front money. Second, and based on what it says has happened on other jobs, JTA feared that by allowing Hubbard to underprice its topsoil item, Hubbard could conceivably request a change order increase of more than $100,000.00. This amount was calculated on the theory that Hubbard might have a $60,000.00 overrun on muck (120,000 cubic yards x 50 ) because it was using the muck to meet the topsoil requirement, and a $1,200.00 underrun on topsoil (which represents the amount bid) because no topsoil would be used, or a net overrun of $58,800.00. At the same time, JTA feared that an overrun on muck would lead to an overrun on subsoil excavation. At a price of $5.00 per cubic yard for any overruns on this item, JTA would be forced to spend as much as $53,000.00 more on a change order for this item. Assuming this actually occurred, PCI would then be the low bidder by almost $88,000.00. Initially, JTA's concerns must be tempered by the fact that on the previous contract for State Road 9A, known as contract 2, Hubbard structured its bid in the same manner as on contract 3. On that contract, its bid was almost three times the engineer's estimate for clearing and grubbing and exceeded the engineer's estimate for mobilization by more than four fold. Even so, Hubbard was more than $200,000.00 lower than the second low bidder and was $400,000.00 lower than the engineer's estimate. On that project, JTA awarded the contract to Hubbard and did not raise the contention, as it did here, that the bid was materially unbalanced. At hearing, the consultant was unable to give a satisfactory explanation as to why the prior bid was "regular" but the instant bid was "irregular" even though both bids had been prepared in the same manner and contained "obviously unbalanced items." In this case, JTA did not give bidders any notice that it intended to construe article 2-6 any differently than it had on prior contracts. In addition, in preparing its bid, Hubbard assumed that article 2-6 would be interpreted in the same manner as did DOT since the ITB provided that the DOT specifications would apply. Moreover, there was nothing in the ITB Special Provisions which gave notice that JTA intended to place a different interpretation on article 2-6 than was customarily done by DOT. According to uncontradicted testimony, DOT has consistently interpreted article 2-6 in the following manner. DOT does not find balancing in and of itself to be a sufficient basis to reject a bid as being irregular under article 2-6. Indeed, virtually every bid submitted for any highway construction project, including those of PCI and Hubbard here, are unbalanced in some respect. If DOT has serious concerns about an unbalanced bid, the terms of article 2-6 require that a study be made to see if the unit prices are "either in excess of or below the reasonable cost analysis values." To do this, DOT performs a study of the time value of money related to the major components of work in a contract on an item by item intra-bid basis, compares the results of that analysis to an irrevocable schedule of construction, and then determines whether the taxpayers would be detrimentally affected by awarding the contract to a bidder with the unbalanced items. In other words, a contractor is paid as units of work are completed, and to the extent major items of work are unbalanced so that payments are deferred or accelerated, the cash flow of the agency may be adversely affected. Without a time value of money analysis, a determination cannot be made as to whether the taxpayers are detrimentally affected by an unbalanced bid. Indeed, out of several thousand bids over a twelve year study period (1975-1987), DOT rejected no more than six because of unbalancing, and then only after such an analysis was performed. As to Hubbard's bid, a former DOT secretary expressed the view that Hubbard's bid did not even rise to the level necessary to invoke the analysis. In any event, by failing to follow its own specifications and performing such a study, JTA could not fairly conclude that the awarding of a contract to PCI would positively impact its net present value of money. This is especially true here since Hubbard proposed to complete the project in thirteen months and PCI in twenty-four months, and neither party submitted a construction schedule with its bid. Therefore, JTA had no basis to conclude that article 2-6 had been violated. Finally, there was no evidence to support the contention that JTA would lose control of the project if Hubbard was paid the excess monies for clearing and grubbing. JTA's concern that Hubbard might fail to complete the job if it received a large payment up front is also without merit. While front end loading is a legitimate concern where a contractor might not finish the project, the facts dispel that concern here. Besides having to post a performance bond, Hubbard would also be disqualified from bidding on other jobs in the event a project was abandoned. Given Hubbard's size and reputation, and the fact that the contract itself provides for JTA retaining a percentage of the payment of work until all work is completed, it is found this concern is not legitimate. As to the concern over topsoil, there was insufficient evidence to establish that muck was more likely to overrun than any other item. Indeed, JTA acknowledged at hearing that the engineer's estimate for muck excavation was as accurate as it could be and no analysis or testing had been performed which would support a change in position. In addition, a JTA board member testified that the topsoil pricing was not considered the primary basis for rejection of Hubbard's bid. Finally, the use of a one cent price for topsoil did not affect the overall price of the bid or give Hubbard an advantage or benefit not enjoyed by others.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered by respondent awarding the contract for project no. 72002-3533 to Hubbard Construction Company. DONE AND ENTERED this 28th day of January, 1993, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of January, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-6302BID Petitioner: 1-3. Partially accepted in finding of fact 1. Partially accepted in finding of fact 3. Partially accepted in findings of fact 4 and 7. Partially accepted in finding of fact 3. 7-12. Partially accepted in finding of fact 10. Partially accepted in findings of fact 10 and 12. Partially accepted in findings of fact 8 and 12. Partially accepted in findings of fact 10 and 12. 16-19. Partially accepted in finding of fact 10. 20-22. Partially accepted in finding of fact 15. 23. Accepted in finding of fact 4. 24. Partially accepted in finding of fact 19. 25. Partially accepted in finding of fact 10. 26. Partially accepted in finding of fact 6. 27-29. Partially accepted in finding of fact 19. 30. Partially accepted in finding of fact 18. 31. Partially accepted in finding of fact 17. 32. Partially accepted in finding of fact 19. 33. Rejected as being unnecessary. 34-35. Partially accepted in finding of fact 19. 36-38. Partially accepted in finding of fact 20. 39-40. Partially accepted in finding of fact 21. 41. Rejected as being unnecessary. 42. Partially accepted in finding of fact 13. 43. Rejected as being unnecessary. 44. Partially accepted in finding of fact 19. 45. Rejected as being unnecessary. Respondent: Partially accepted in findings of fact 2 and 3. Partially accepted in findings of fact 4 and 5. Partially accepted in finding of fact 14. Partially accepted in finding of fact 6. Partially accepted in findings of fact 15 and 17. 6-8. Partially accepted in finding of fact 17. Rejected as being unnecessary. Partially accepted in finding of fact 15. Partially accepted in findings of fact 13 and 16. Partially accepted in finding of fact 3. Rejected as being unnecessary. Intervenor: Partially accepted in finding of fact 1. Partially accepted in finding of fact 3. Partially accepted in findings of fact 4 and 5. Partially accepted in finding of fact 14. 5-10. Partially accepted in finding of factg 15. 10A-C. Partially accepted in finding of fact 17. 11. Partially accepted in findings of fact 3 and 16. Note - Where a proposed finding has been partially accepted, the remainder has been rejected as being irrelevant, unnecessary, cumulative, not supported by the more persuasive evidence, or a conclusion of law. COPIES FURNISHED: Miles N. Francis, Jr. Executive Director Jacksonville Transportation Authority P. O. Drawer O Jacksonville, Florida 32203 F. Alan Cummings, Esquire Mary M. Piccard, Esquire P. O. Box 589 Tallahassee, Florida 32302-0589 Cindy A. Laquidara, Esquire Kenneth A. Tomchin, Esquire P. O. Box 4099 Jacksonville, Florida 32201 Herbert R. Kanning, Esquire 12-14 East Bay Street Suite 302 Jacksonville, Florida 32202
The Issue Whether the decision by the State of Florida, Department of Corrections (DOC) to reject all bids received in response to Request For Proposal 93-RIVHSD- 075 (RFP) was arbitrary, capricious, fraudulent, illegal or dishonest. Additionally, Intervenor challenges Petitioner's standing to bring this proceeding since Bio-Medical Applications, Petitioner's wholly-owned subsidiary corporation, submitted the bid at issue and because Petitioner would not be a party to any contract awarded pursuant to the RFP.
Findings Of Fact Standing In its response to the Request For Proposal at issue in this proceeding, Bio-Medical Applications of Florida, Inc. (BMA) provides the following regarding vendor name and address: Vendor Name: Bio-Medical Applications of Florida, Inc. Vendor Mailing Address: c/o National Medical Care, Inc. 1601 Trapelo Road Walthem, Massachusetts 02154 In the bidder acknowledgment and ownership interest portion of its response to the RFP, BMA disclosed the following: ... This bid is presented in good faith without collusion or fraud and Ernestine M. Lowrie, as signer of the bid from Bio-Medical Applications of Florida, Inc. has full authority to bind as the principal bidder. All stock of Bio-Medical Applications of Florida, Inc. is held by Bio-Medical Applications Management Company, Inc. and all the stock of the latter corporation is held by National Medical Care, Inc., 1601 Trapelo Road, Walthem, Massachusetts 02154. All of the stock of National Medical Care, Inc. is held by W. R. Grace and Company. The Dialysis Services Division of National Medical Care, Inc. (NMC) is the largest division of NMC. In each state in which NMC has an interest in dialysis services operations, Bio-Medical Applications is organized as a corporate entity and is part of the Dialysis Services Division of the parent corporation, NMC. Petitioner in this proceeding, NMC, is not currently organized and registered as a corporation under the laws of the State of Florida. At the final hearing in this case, NMC's representative testified that he was not aware that NMC was registered to do business in the State of Florida but thought NMC had been operating in Florida for about 20 years. BMA is wholly owned by NMC. The Respondent agency originally expressed its intent to award the contract at issue to BMA. NMC has a substantial interest in the RFP and the contract at issue, therefore, its substantial interests will be affected by the agency's proposed action to reject all bids. NMC has alleged that the agency's decision to reject all bids was arbitrary, illegal, dishonest, and fraudulent. Further, Petitioner also contends that the agency decision to reject all bids, after BMA's bid proposal has been disclosed to competitors, undermines the competitive purpose of the bid process. The Request for Proposal On August 27, 1993, the DOC issued RFP No. 93-RIVHSD-075. The RFP requested bidders to submit bids for a contract to perform peritoneal dialysis and hemodialysis treatment at the Department's Broward Correctional Institution and its South Florida Reception Center. The RFP required that bid proposals be filed with the DOC by September 30, 1993. The RFP provided that a bidder would receive up to 50 points for its price proposal and up to 50 points for its qualitative proposal for a total of 100 possible points. The RFP also provided that the DOC reserved the right to reject all bids when the DOC determined it was in its best interest to do so. The Bid Evaluation Upon initial review of the proposals submitted in response to the RFP, the DOC originally calculated that Petitioner's subsidiary, BMA, had received 49 out of 50 possible points from its price, as well as qualitative proposal for a total of 98 points. On October 22, 1993, the DOC sent written notice to all proposers of its intent to award the contract to National Medical Care, Inc. (Petitioner). At the time it mailed its notice of intent, the DOC believed that the difference between the Bio-Medical and the lowest price proposal (received by HealthInfusion) was $156,780 over the five year term of the proposed contract. HealthInfusion and an additional disappointed bidder filed protests contesting the DOC's notice of intent. Based upon input from the protestors, the DOC learned that it had miscalculated the cost of Bio-Medical's proposal. When the DOC corrected its initial error in calculation, BMA's proposal was $340,000 higher over the first three years of the proposed contract and $972,000 higher than the lowest bidder for the entire five year contract term. The Decision to Reject All Bids On November 24, 1993, the DOC notified all bidders of its intent to reject all bids. In addition to the initial miscalculation of price in the bid, the DOC discovered what it considers to be other irregularities in the evaluation in this case. BMA was the existing provider at the time the RFP issued. The bid evaluators worked closely on a day to day basis with Petitioner's employees. The DOC believes the evaluators preferred that Petitioner be awarded the contract and that the evaluators were not objective. During the process of evaluation, the evaluators were provided a letter from a party representing one of the bidders which contained allegations regarding negative background information on other bidders. The DOC believes that the letter should not have been given to the evaluators and that access to the letter further affected the evaluator's ability to be objective. Admitted Facts NMC and the Respondent DOC filed a Prehearing Stipulation in which the following facts are admitted by those parties: The DOC issued Request for Proposal No. 93-RIVHSD-075 ("RFP"). The RFP requested bidders to submit bids for peritoneal dialysis and hemodialysis treatment at Broward Correctional Institution and South Florida Reception Center. Bid proposals had to be filed with the DOC by September 30, 1993. On November 24, 1993, the Department notified all bidders of its intent to reject all bids. The Department rejected all bids due to significant irregularities in the bid evaluation process and the price difference between the winning bid and the low bid was too great. (Emphasis supplied.) On December 3, 1993, National Medical Care, Inc. filed its notice of intent to protest the DOC's decision to reject all bids. On December 13, 1993, National Medical Care, Inc. filed its formal written bid protest. Burden of Proof Petitioner has failed to prove, by the preponderance of evidence, that the DOC acted arbitrarily, illegally, fraudulently or dishonestly in making its decision to reject all bids.
Recommendation Based upon the foregoing, it is RECOMMENDED that the Respondent enter a final order dismissing NMC's protest of its decision to reject all bids in response to request for Proposal No. 93-RIVHSD-075. RECOMMENDED this 16th day of March, 1994, at Tallahassee, Florida. JAMES W. YORK, 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 16th day of March, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-7111BID The following constitute specific rulings, pursuant to Section 120.59(2), Florida Statutes, upon the parties' respective proposed findings of fact (PFOF). Petitioner's PFOF: Petitioner's PFOF 1 is adopted in paragraph 8 of the Recommended Order (RO). Petitioner's PFOF 2 is adopted in paragraph 9 of the RO. Petitioner's PFOF 3 is hereby adopted. Petitioner's PFOF 4 is hereby adopted. Petitioner's PFOF 5, to the extent not conclusory, is adopted in paragraph 1 of the RO. Petitioner's PFOF 6 is hereby adopted. Petitioner's PFOF 7 is adopted in paragraph 2 of the RO. 8-9. Petitioner's PFOFs 8 and 9 are hereby adopted. Sentence 1 of Petitioner's PFOF 10 is hereby adopted. Sentence 2 of this proposed finding is rejected as conclusory. Petitioner's PFOF 11 is adopted in paragraph 14 of the RO. 12-14. Petitioner's PFOFs 12, 13 and 14 are hereby adopted. Petitioner's PFOF 15 is adopted in paragraph 2 of the RO. Petitioner's PFOF 16 is hereby adopted. Petitioner's PFOF 17 is adopted in paragraph 26 of the RO and is a fact, in effect, stipulated to by Petitioner and Respondent. Petitioner's PFOF 18 is adopted in substance in paragraph 21. To the extent not adopted in the RO, the remainder of Petitioner's PFOF 18 is hereby adopted. Petitioner's PFOF 19 is adopted in paragraph 13 of the RO. Petitioner's PFOF 20 is adopted, in substance, in paragraph 16 of the RO. 21-24. Petitioner's PFOFs 21-24 are hereby adopted. Petitioner's PFOF 25 is rejected as a conclusion. Petitioner's PFOF 26 is rejected as conclusory and argumentative. This proposed finding is also irrelevant based upon facts admitted by Petitioner. Petitioner's PFOF 27 is rejected as irrelevant based upon facts admitted to by Petitioner. 28-34. Petitioner's PFOFs 28-34 are hereby adopted to the extent relevant. Based upon Petitioner's admission that the Respondent rejected all bids based on "significant irregularities," these proposals are for the most part irrelevant and unnecessary to the conclusions reached. 35. Petitioner's PFOF 35 is hereby adopted. 36-39. Petitioner's PFOFs 36-39 are adopted. 40-44. Petitioner's PFOFs 40-44 are cumulative and not necessary to the conclusions reached. Respondent's PFOF: 1-19. Respondent's PFOFs 1-19 are adopted in the RO. 20. Respondent's PFOF 20 is rejected as conclusory. 21-22. Respondent's PFOFs 21 and 22 are adopted in the RO. 23. Respondent's PFOF 23 is rejected as argument. 24-26. Respondent's PFOFs 24-26 are adopted in the RO. 27. Respondent's PFOF 27 is rejected as conclusory. 28-29. Respondent's PFOFs 28 and 29 are adopted in the RO. 30-32. Respondent's PFOFs 30-32 are rejected as conclusions and argument. Respondent's PFOF 33 is hereby adopted. Respondent's PFOF 34 is rejected as argument. Intervenor's PFOF: 1-21. Intervenor's PFOFs 1-21 are adopted in substance in the RO. Intervenor's PFOF 22 is adopted, in substance, in paragraph 4 of the RO. Intervenor's PFOF 23 is hereby adopted. Intervenor's PFOF 24 is adopted in substance. Intervenor's PFOF 25 is hereby adopted. However, Intervenor has failed to prove that the activity of NMC is not within one of the several exceptions to the requirements of Section 607.1501, Florida Statutes. COPIES FURNISHED: Seann M. Frazier, Esquire Jennifer Kujawa-Graner, Esquire PANZA, MAURER, MAYNARD & NEEL, P.A. 3081 East Commercial Avenue Fort Lauderdale, Florida 33308 R. Beth Atchison, Esquire Department of Corrections 2601 Blair Stone Road Tallahassee, Florida 32399-2500 Timothy G. Schoenwalder, Esquire BLANK, RIGSBY & MEENAN, P.A. 204-B South Monroe Street Tallahassee, Florida 32301 Harry K. Singletary, Jr. Secretary Department of Corrections 2601 Blair Stone Road Tallahassee, Florida 32399-2500
The Issue The issue to be determined is whether Respondent's proposed award for ITB 09-22 for Building 14B renovation is contrary to law, against the University's governing statutes, rules or policies or the specifications of the invitation to bid.
Findings Of Fact The University of North Florida published its Notice of Bid/Request for Proposal in reference to ITB #09-22 entitled "GC's for Building 14B Renovation" on December 19, 2008, with a submission deadline of January 27, 2009. The opening date was eventually extended to January 30, 2009. There were four addendums to the ITB #09-22 Project. The Notice of Bid/Request for Proposal document contained the following provisions: This project consists of the following scope of work: The work includes all labor, supervision, equipment, and materials required to execute the Contract Documents in two phases for the tenant build-out of the existing UNF Building 14-B (approximate square footage 9742). The work includes, but is not limited to, demolition of all interior walls, finishes, mechanical, electrical, plumbing and communication components as well as a new exterior curtain wall system. Exterior construction will include new glazing in aluminum curtain wall. Interior construction will include new gypsum wallboard partitions with metal stud walls, millwork, suspended acoustical and gypsum wallboard ceilings, wood and metal doors in hollow metal frames, coiling overhead grilles, toilet partitions and vanities. Interior finishes include carpeting, resilient tile, ceramic tile, painting, and window treatments. Mechanical work includes installation of new Owner provided HVAC units with ductwork and all necessary connections to the UNF Central Plant chilled water system. Plumbing includes new piping and fixtures for the tenant build-out and renovation of the group male and female restrooms. Electrical work includes new wiring, devices and lighting for the new tenant build-out. Successful bidders must have demonstrable previous experience with the described systems and technical requirements. All bidders must be qualified at the time of the bid opening in accordance with the Bidders Qualification within the ITB 09-22 Bid documents. . . Article I, Section 2 includes a heading in bold stating "Qualification Criteria." This section states: Participants must qualify to bid on this project. UNF will utilize the following criteria to qualify the general contractors within this ITB. The information must be completed on the UNF Qualifications Form provided (page 10-11): Bonding: Demonstrates a bonding capacity of at least $2 million dollars and has an A.M. Best Rating of "A-V" or better. Licenses: Company is licensed to do business in the state of Florida and approved by the US Department of Treasury listing as an acceptable surety. Project references: Company has successfully completed at least 3 commercial construction projects of more than $1 million dollars each in the past three (3) years. List 3 such projects to include project name, client name, completion date, location, project value, role in project. Reference: Project name, owner, owner's representative name/phone number, completion date and construction cost. Years of experience: Company has a minimum five (5) years of GC experience under the current company name. The directions for the General Contractor's Qualification Summary, under Related Experience, reiterated that the bidder was to list "No more than 4 projects of comparable type, size and complexity. (1) Project must be for a college/university)." Addendum I for the Project, issued January 9, 2009, clarified that the requirement for having completed successfully a project of similar size and scope at a Florida University in the last three years is a qualification factor for this project. Addendum II, issued January 12, 2009, removed the requirement for bidders to have completed one project for a college or university. The other two addenda did not address contractor qualifications. Petitioner, Core Construction Company (Core Construction or Petitioner) bid in response to the ITB. Approximately 19 other bidders also responded. Core Construction was the apparent low bidder on the project, with a bid of $1,073,000. There was some concern expressed by the architect reviewing the bids because the bids were all within ten percent of each other for the top bidders, with the bidders 2-10 being within six percent of each other. In an e-mail to Dianna White, the Senior Buyer for UNF purchasing, Mr. Norman stated: Overall there was a 20% range in bid prices which I attribute to a significant difference in the size, quality and abilities of the contractors that bid this project. The apparently low bidder was $60,516 below the second low bidder and $83,000 below the third low bidder. This is a significant concern since there is only $46,484 between the second and fifth low bidders. I suggest the apparent low bidder be contacted and asked if they feel comfortable with their bid, because it appears to me they are missing something significant in their pricing. Purchasing should also carefully review their current financials and current bonding capacity if this is allowed. Project reference checks, price verification against the architect's construction estimate and bonding checks were performed with respect to the four lowest bidding companies: Core Construction, Pooley Contracting, Rivers & Rivers and Warden Construction. Pooley Contracting, the second-lowest bidder, was disqualified as non-responsive because its bid package did not include a bonding letter. Core provided the names of three completed projects that were valued at over one million dollars. Dianna White called each of the references provided, not only for Core but for three of the four lowest bidders. The same questions were asked of each reference for each company: 1) Was the project on time and within budget; 2) Did the project run smoothly; 3) Were project issues handled; and 4) Would you use the contractor again. Calls related to Pooley Contracting were not completed because it was disqualified as non-responsive. While the references for Rivers & Rivers and Warden were consistently good, two of the three references received for Core were not. Ms. White described them as the most "strongly negative" references she had ever received. In particular, the references indicated difficulty in completing jobs within budget and on time, which the Respondent viewed as the basis for determining whether a contractor had successfully completed a project. Two of the references indicated that they would not use the contractor again, or as one put it, "not if there was any way around it." Based on the recommendations received, the Purchasing Office for the University recommended that Core Construction be disqualified for failing to demonstrate successful completion of three projects over one million dollars that were similar in scope. Because Pooley Construction was also disqualified, the Purchasing Department recommended that the Project be awarded to the third-lowest bidder, Rivers & Rivers. The recommendation to award the project to Rivers & Rivers was accepted by the Vice President of Administration and Finance, and on February 18, 2009, a Notice of Award issued identifying Rivers & Rivers as the company receiving the award. On February 19, 2009, Core Construction notified Respondent that it intended to protest the award of the Project to Rivers & Rivers. On February 24, 2009, Core Construction provided a $10,000.00 surety bond and a written protest of the award. The basis of the protest was two-fold. First, Core Construction contended that Rivers & Rivers did not meet the qualification criteria set out in the ITB, because it was did not have a minimum of five years of general contractor experience under the current company name. Second, Core felt that the poor references received should not be a basis for disqualification. Upon receiving the bid protest, Respondent contacted Rivers & Rivers to verify its licensure status. Upon inquiry, it was determined that while the principals of the company had over 30 years of experience, the Rivers & Rivers entity had not been licensed under that name for the requisite five years. While no action has been taken while this bid protest is pending, Respondent indicated its intention to withdraw the award from Rivers & Rivers and award the contract instead to the next lowest bidder. The procedures used by the University in determining the appropriate award were not contrary to law, against the University's governing statutes, rules or policies or the specifications of the invitation to bid. It was consistent with University policy to check references for projects of similar scope and size. Therefore, it was appropriate to ask for and check references for projects of over one million dollars. There is no indication that any bidder questioned what the University would consider as successful completion of a project. The time for questioning this issue would have been when the specifications were issued, consistent with Article I, Section 7 of the ITB. Having a project come in on time and within budget is a reasonable measure of successful completion. It is not the same as "substantial completion," which generally refers to a point of time in the construction process, not the final completion of the project.
Recommendation Upon consideration of the facts found and conclusions of law reached, it is RECOMMENDED: That the President of the University of North Florida, pursuant to his authority under Board of Governor's Regulation 18.002, enter a final order dismissing Petitioner's written protest. DONE AND ENTERED this 30th day of April, 2009, in Tallahassee, Leon County, Florida. S LISA SHEARER NELSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 30th day of April, 2009. COPIES FURNISHED: Jay H. Chung Core Construction Company, Inc. 4940 Emerson Street, Suite 205 Jacksonville, Florida 32207 Paul Christopher Wrenn, Esquire University of North Florida J.J. Daniel Hall, Suite 2100 1 University of North Florida Drive Jacksonville, Florida 32224 John A. Delaney, President University of North Florida J.J. Daniel Hall, Suite 2800 1 University of North Florida Drive Jacksonville, Florida 32224
The Issue The issue in this bid protest is whether Respondent acted arbitrarily when it decided to reject all of the bids it had received in response to a solicitation seeking bids on a contract for roof repairs.
Findings Of Fact On January 10, 2008, the Florida Department of Environmental Protection (the "Department" or "DEP") issued an Invitation to Bid (the "ITB"), the purpose of which was to solicit competitive bids from qualified contractors on a project whose scope of work envisioned repairs to the wind-damaged roofs of several buildings located on the grounds of the Hugh Taylor Birch State Park in Fort Lauderdale, Florida. Some of the buildings to be repaired were single-family residences. Work on these structures accordingly needed to conform to the requirements prescribed in the 2007 Manual of Hurricane Mitigation Retrofits for Existing Site-Built Single Family Residential Structures (the "Manual"), which the Florida Building Commission (the "Commission"), following an explicit legislative directive, see Section 553.844(3), Florida Statutes,1 recently had adopted, by incorporative reference, as a rule. See Fla. Admin. Code R. 9B-3.0475 (2007).2 The Rule had taken effect on November 14, 2007, giving the Manual's contents the same status and force as the Florida Building Code. Id. Just before the Department issued the ITB, the Commission had approved, at a meeting on January 8, 2008, a modified version of the Manual, which it called the 2007 Manual of Hurricane Mitigation Retrofits for Existing Site-Built Single Family Residential Structures, Version 2 (the "Revised Manual"). In consequence of the Commission's approval of the Revised Manual, the Florida Department of Community Affairs ("DCA") caused a Notice of Proposed Rule Development to be published on January 25, 2008, in the Florida Administrative Weekly. This official advertisement announced that the Commission intended to amend Rule 9B-3.0475, so that its incorporative reference would mention the Revision Manual instead of the Manual. See 34 Fla. Admin. W. 461-62 (Jan. 25, 2008).3 DCA caused a Notice of Proposed Rule respecting the intended revision of Rule 9B-3.0475 to be published on February 1, 2008, in the Florida Administrative Weekly. See 34 Fla. Admin. W. 605 (Feb. 1, 2008).4 On February 5, 2008, the Department issued Addendum No. 4 to the ITB (the "Addendum"). The Addendum provided in pertinent part as follows: Bidders shall bid the project as specified despite the recent change in Rule 9B-3.0475 relating to hurricane mitigation retrofits. Any additional water barrier will be accomplished by Change Order after award of the contract. (The foregoing provisions of the Addendum will be referred to hereinafter as the "Directive"). On February 12, 2008, the Department opened the bids it had received in response to the ITB. Ten (out of 12) of the bids submitted were deemed responsive. The bid of Petitioner Spinella Enterprises, Inc. ("Spinella") was one of the acceptable bids. On February 19, 2008, DEP posted notice of its intent to award a contract to the lowest bidder, namely Spinella, which had offered to perform the work for $94,150. The second lowest bidder was The Bookhardt Group ("Bookhardt"). Bookhardt timely protested the intended award, raising several objections, only one of which is relevant here. In its formal written protest, dated March 3, 2008, Bookhardt alleged that "[t]he new State of Florida law F.S. 553.844 was not part of the solicitation." On April 4, 2008, Rule 9B-3.0475, as amended to incorporate by reference the Revised Manual, took effect. See Fla. Admin. Code R. 9B-3.0475 (2008). On May 16, 2008, DEP posted notice of its intent to reject all bids received in response to the ITB. (Bookhardt's protest, which remained pending, had never been referred to DOAH for a formal hearing.) Spinella timely protested the Department's decision to reject all bids. In an email sent to Spinella on July 22, 2008, DEP's counsel explained the rationale behind the decision: The reason the Department rejected all bids follows. When the Department posted the notice of intent to award the contract to Spinella Enterprises, Inc., the second low bidder (Bookhardt Roofing) protested the intent to award. The second low bidder's basis for protesting the intended award was that Addendum 4 directed bidders to ignore certain rules of the Construction Industry Licensing Board [sic], which had become effective after the bid opening, which was not in accordance with the law. As a result, this may have caused confusion and the Department had no assurance that bidders were bidding the project correctly. In addition, the statement in Addendum 4 that the Department would add the required moisture barrier afterward by change order set up a situation where bidders had no idea how much the Department would be willing to pay for the change order. Further, the moisture barrier was not the only thing required by the new rules. Potential bidders may not have bid due to these uncertainties. The Department agreed with Bookhardt's assertions and rejected all bids . . . . Notwithstanding Spinella's protest, the Department issued a second invitation to bid on the project in question. As of the final hearing, the bids received in response to this second solicitation were scheduled to be opened on August 12, 2008. Ultimate Factual Determinations The Department's decision to reject all bids is premised, ultimately, on the notion that the Directive told prospective bidders to ignore an applicable rule in preparing their respective bids.5 If this were true, then the Directive could have been a source of potential confusion, as the Department argues, because a prudent bidder might reasonably hesitate to quote a price based on (possibly) legally deficient specifications. The Directive, however, did not instruct bidders to ignore an applicable, existing rule. Rather, under any reasonable interpretation, it instructed bidders to ignore a proposed rule and follow existing law. Such an instruction was neither confusing nor inappropriate. To be sure, the first sentence of the Directive——at least when read literally——misstated a fact. It did so by expressing an underlying assumption, i.e. that Rule 9B-3.0475 recently had been changed, which was incorrect. In fact, as of February 5, 2008, the Rule was exactly the same as it had always been. (It would remain that way for the next two months, until April 6, 2008).6 DEP's misstatement about the Rule might, conceivably, have confused a potential bidder, at least momentarily. But DEP did not factor the potential for such confusion into its decision to reject all bids, and no evidence of any confusion in this regard was offered at hearing.7 More important is that the unambiguous thrust of the Directive was to tell bidders to rely upon the "not recently changed" Rule 9B-3.0475, which could only have meant Florida Administrative Code Rule 9B-3.0475 (2007) as originally adopted, because that was the one and only version of the Rule which, to that point, had ever existed. Thus, even if the Department were operating under the mistaken belief, when it issued the Addendum, that Rule 9B-3.0475 recently had been amended; and even if, as a result, DEP thought it was telling prospective bidders to ignore an applicable, existing rule, DEP nevertheless made clear its intention that prospective bidders follow the original Rule 9B- 3.0475, which was in fact the operative Rule at the time, whether or not DEP knew it. Indeed, as any reasonable potential bidder knew or should have known at the time of the Addendum, (a) the Commission recently had approved the Revised Manual, but the contents thereof would not have the force and effect of law unless and until the Revised Manual were adopted as a rule, which had not yet happened; (b) the Commission had initiated rulemaking to amend Rule 9B-3.0475 so as to adopt the Revised Manual as a rule, but the process was pending, not complete; (c) Rule 9B-3.0475 had not been amended, ever; and, therefore, (d) the Manual still had the force and effect of law. See endnote 6. The Directive obviously could not alter or affect these objective facts. At bottom, then, a reasonable bidder, reviewing the Directive, would (or should) have concluded either (a) that the "recent change" which DEP had in mind was the Commission's approval of the Revised Manual (or the subsequent announcement of the proposed amendment to Rule 9B-3.0475) or (b) that DEP mistakenly believed the Rule had been changed, even though it had not been. Either way, a reasonable bidder would (or should) have known that the Department wanted bidders to prepare their respective bids based not on the Revised Manual, but the Manual. In other words, regardless of what DEP subjectively thought was the existing law, DEP clearly intended (and unambiguously expressed its intent) that bidders follow what was, in fact, existing law. This could not have confused a reasonable bidder because, absent an instruction to exceed the minimum required legal standards (which the Directive was not), a reasonable bidder would have followed existing law in preparing its bid, just as the Directive required. Once it is determined that the Directive did not, in fact, instruct bidders to ignore an applicable, existing law, but rather told them to rely upon the applicable, existing law (notwithstanding that such law might change in the foreseeable future), the logic underlying the Department's decision to reject all bids unravels. Simply put, there is no genuine basis in logic or fact for concluding that the Addendum caused confusion. The other grounds that DEP has put forward do not hold water either. Contrary to the Department's contention, the possibility that a Change Order would be necessary if an "additional water barrier" were required could not possibly have confused potential bidders or caused them to be uncertain about how much money the Department would be willing to pay for such extra work. This is because Article 27 of the Construction Contract prescribes the procedure for entering into a Change Order, and it specifies the method for determining the price of any extra work. See ITB at 102-05. The fact that the proposed amendment to Rule 9B-3.0475, if it were to be adopted and become applicable to the instant project, might require other additional work, besides a water barrier, likewise could not reasonably have caused potential bidders to refrain from bidding, for the same reason: The Construction Contract contains explicit provisions which deal with the contingency of extra work or changes in the work. Id. In sum, DEP's intended decision to reject all bids cannot be justified by any analysis that a reasonable person would use to reach a decision of similar importance. It is, therefore, arbitrary.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department enter a final order finding that its decision to reject all bids was arbitrary. Because the Department elected not to comply with the statutory directive to abate this procurement pending the outcome of Spinella's protest, with the result that the contract at issue possibly has been awarded already to another bidder; and because the choice of remedies for invalid procurement actions is ultimately within the agency's discretion, the undersigned declines to make a recommendation regarding the means by which DEP should rectify the harm to Spinella, but he urges that other appropriate relief be granted if Spinella cannot be awarded the contact. DONE AND ENTERED this 2nd day of October, 2008, in Tallahassee, Leon County, Florida. JOHN G. VAN LANINGHAM Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 2nd day of October, 2008.
