Findings Of Fact On or about June 3, 1987, DOT advertised that it would receive bids on State Project No. 97870-334, etc. in Dade, Broward and Palm Beach Counties to improve portions of the Florida Turnpike. On June 24, 1987, bids were received by DOT from Gilbert, State Paving and Archer Western Contractors. The apparent low bidder at bid opening on June 24, 1987, was Gilbert and State Paving was apparent second low bidder. DOT was informally advised by John Beck, an attorney representing State Paving, that Gilbert's bid was believed to be unbalanced and the appropriate officials referred the issue to the DOT Bureau of Estimates to look into the low bid to see if it was unbalanced to the detriment of the State. Review of the Gilbert bid began with an internal analysis of the bid prices in comparison to the DOT Estimate of the Work. All bid prices above or below a certain percent of the engineer's estimate of costs were prepared in a computer printout and those items were checked by the consultants on the project. Basically, the major items in the project, which comprises some 400 bid items, were broken down to 10 groupings and the bids for each item in these groups was prepared for the three bidders and tabulated in Exhibit 2. The DOT Technical Committee reviewed the bids and concluded there was no unbalancing in Gilbert's bid which was detrimental to the State. This recommendation was approved by the Awards Committee which had also been furnished the information in Exhibit 2 by the consulting engineer for the project. Based upon this information, the Awards Committee concluded that the awards should go to Gilbert as no unbalancing detrimental to the State was found. Specification made a part of all DOT bid proposals provide that DOT may reject an unbalanced bid. As a matter of policy, DOT only rejects unbalanced bids deemed contrary to the interests of the State. Bids may be unbalanced in numerous ways. One significant method is known as front loading where the bidder submits a high bid for the work to be done at the beginning of the project such as clearing and grubbing and low bids for the work done later in the project. If successful in getting the award, this bidder would have excess profits on the clearing and grubbing which could draw interest while the less profitable later work was being done. Another variant is to study the plans and specifications to see if the quantities listed in the bid proposal are accurately reflected in the plans and specifications. If not, those items for which the bid proposal shows more than the plans and specifications reasonably required can be bid low, and for those items by which the bid proposal shows less than actually will be required can be bid high. Since the contractor is paid by the units used, those excess units at a higher price would result in more profit for the contractor yet allow him to submit an overall lower bid. For example, if the bid proposal contains two similar items for which the request for proposal estimates 100 each will be required, and the bidder concludes that only 50 will be required at Site A and 150 at Site B, he submits a low bid for Site A and a high bid for Site B. If the fair price for these units is $10 each, and the bidder bids $5 per unit for Site A or $500, and $15 for Site B or $1500, the total bid price is $2000, but if the bidder only installs 50 at Site A he would be paid $250 and install $150 at Site B for which he would be paid $2250. His total compensation would be $2500. In competitively bid contracts, such as the instant project, contractors modify their prices by taking a calculated risk that certain items bid on will not need to be accomplished and submit a nominal bid of $1 or 1 cent for such an item. By definition, such a bid is unbalanced, but if the item so bid has to be provided, the contractor has to provide this service at the bid price. The only evidence submitted by Petitioner tending to show Gilbert's bid was unbalanced to the detriment of the State was testimony, objected to and sustained, that the plans and specifications showed more of certain units would be needed than the estimated quantities on the bid proposal, which constituted the basis for the bids submitted. Such evidence constitutes a challenge to the bid specifications and is untimely. Gilbert's witness who prepared the bid submitted by Gilbert adequately explained the basis for bids submitted by Gilbert on the challenged items. The document entitled "This is Not an Addendum," clearly states on its face that "an addendum may follow containing the following information." No bids are solicited thereby and for no item contained thereon is the State obligated to contract. This document was provided all bidders before bids were open and no unfair advantage to anyone or detriment to the State was shown. In a project containing some 400 bid items, many modifications of the contract during construction is required to cover unforeseen circumstances that arise. While it would be better to get competitive bids on every bit of work done on this project, in this imperfect world unforeseen items will appear. The document complained of attempts to alert the bidders to some anticipated work not foreseen when the bid proposal was prepared, but it is not a part of the bid solicitation.
The Issue This case considers whether Petitioner's response to Invitation to Bid, No. 94-014, as revised, issued by the Respondent, is responsive to the terms of the Invitation to Bid. If Petitioner is found responsive, then the question is raised whether Petitioner has offered the lowest and best response to the invitation to bid.
Findings Of Fact On May 26, 1994, Respondent provided a memorandum to prospective vendors concerning Bid No. 94-014, as revised. This memorandum informed the prospective vendors that the new bid due date was June 6, 1994. The memorandum attached the bid instructions. Under general conditions to the invitation to bid the prospective vendors were reminded in Paragraph 7 that the Respondent could ". . . reject any or all bids or waive any minor irregularity or technicality in bids received." Under the heading "Special Provisions" prospective vendors were informed that "The charge per 1,000 for individual items under Exhibit A shall be the rates for the contract with the successful bidder." The prospective bidders were instructed as follows: REQUIRED ITEMS TO BE SUBMITTED WITH BID: The bidder must complete all required items below and submit as part of the bid package. Any bid in which these items are not used or in which these items are improperly executed, may be considered non-responsive and the bid may be subject to rejection. Among the items to be submitted with the bid was Exhibit A. The bidders were informed about the process of EVALUATION/AWARD. There it was stated: Bids will be evaluated and awarded on an all or none basis to one bidder. Award will be based on the total costs of four (4) theoretical jobs (See Exhibit B-Bid Total) requiring varying services and on the bidder's qualifications to best serve the Department's needs. The prospective bidders were then reminded a second time that: "THE DEPARTMENT OF BUSINESS AND PROFESSIONAL REGULATION RESERVES THE RIGHT TO REJECT ANY AND ALL BIDS AND TO WAIVE ANY MINOR IRREGULARITIES IN BIDS RECEIVED." Within Exhibit A to the bid document was a category referred to as "Tabbing", calling for the charge per 1,000 for that service. Within Exhibit B under the fourth theoretical job was a requirement to quote the subtotal cost for 200,000 newsletter preparations to include "Tabbing." Three vendors submitted responses to the invitation to bid. Those responses were opened on June 6, 1994. The vendors who responded were Petitioner, Educational Clearinghouse, Inc. and Mail Masters of Tallahassee, Inc. In the subtotal for costs for 200,000 newsletter preparations, in activity four, concerning theoretical jobs, found within Petitioner's Exhibit B to the response to the invitation to bid, Petitioner made a mistake. It misplaced the decimal point and described the subtotal cost for 200,000 newsletter preparations as $73.80 instead of $7,380.00. Respondent characterized this as a typographical error or nominal mistake. In fact, this error constituted a minor irregularity which did not preclude the ability to understand Petitioner's response so that it might be compared to the responses by the competition. Petitioner made a second error. This error occurred when Petitioner failed to indicate the amount that it would charge per 1,000 for "Tabbing" within Exhibit A. Respondent did not consider this to be a minor irregularity and rejected Petitioner's bid as non-responsive for the failure to include a quotation for the charge per 1,000 for "Tabbing." This resulted in the intent to award the contract to Educational Clearinghouse, Inc. whose bid total for the four theoretical jobs under Exhibit B was $9,137.25 compared to Petitioner's bid total of $8,374.62. In preparing Exhibit B, activity four, Petitioner included a theoretical charge for "Tabbing" in the amount of $8.00 per 1,000. Petitioner contends that the $8.00 per 1,000 found within that entry may be correlated with the missing information concerning "Tabbing" in Exhibit A to its response to the invitation to bid. In the instructions to the vendors, Respondent has informed the vendors that the charge per thousand for individual items identified in Exhibit A constitutes the rate that the Respondent would expect to pay under a contract with the successful bidder. By contrast, the function of the information provided in Exhibit B is for purposes of awarding the contract based upon total costs of the four theoretical jobs and on the basis of the vendor's qualifications to best serve the Respondent's needs. Although not stated in the invitation to bid it can be inferred that similar references within Exhibits A and B, such as the reference to "Tabbing", calls for a comparable price to be set forth for the item in both Exhibit A and Exhibit B. Otherwise vendors would have the opportunity to quote low prices in completing Exhibit B as a means to win the cost comparison with their competitors for purposes of the award and then have the opportunity to charge higher costs per 1,000 as reflected in Exhibit A when establishing the charges for the contract with the Respondent following the competition contemplated in the comparison of the theoretical bid total under Exhibit B. Therefore, it would be reasonable for the Respondent to expect that the Petitioner would charge $8.00 per 1,000 for "Tabbing" under a contract between the Petitioner and Respondent based upon information that was set forth in the response to Exhibit B, activity four, "Tabbing." In summary, Petitioner's oversight in leaving out reference to the tabbing charge in Exhibit A does not affect the comparison of bid responses as contemplated by the instructions to the vendors, a function performed by comparing the respective Exhibits B. Otherwise, Respondent may gain the necessary understanding of Petitioner's charge per 1,000 for "Tabbing" as contemplated in instructions concerning Exhibit A as a means for entering into the contract. This understanding is achieved by transposing the $8.00 per 1,000 "Tabbing" quotation in Exhibit B to the "Tabbing" charge within Exhibit A as $8.00 per 1,000. With this adjustment, Modern Mailers, Inc. is the lowest responsive bidder and best able to serve Respondent's needs pertaining to Invitation to Bid No. 94-014, as revised.
Recommendation Based upon the findings of fact and the conclusions of law reached, it is, RECOMMENDED: That a final order be entered which finds that Petitioner is a "qualified" and "responsible" bidder who is the lowest and best responsive bidder to Invitation to Bid, No. 94-014, as revised and is entitled to the award of the contract contemplated by that invitation to bid. DONE and ENTERED this 8th day of September, 1994, in Tallahassee, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 8th day of September, 1994. APPENDIX The following discussion is given concerning the proposed findings of fact of the Parties: Petitioner's Facts: Paragraph 1 is subordinate to facts found. Paragraph 2 is not necessary to the resolution of the dispute. Paragraphs 3 through 5 are subordinate to facts found. Paragraphs 6 and 7 are rejected to the extent that they are intended to establish an excuse for the Petitioner not providing information related to the cost for tabbing called for in Exhibit A in the invitation to bid. Paragraph 8 is subordinate to facts found. Paragraphs 9 through 12 are not necessary to the resolution of the dispute. Paragraph 13 is subordinate to facts found. Paragraph 14 is rejected to the extent that it suggests that Petitioner may amend its response to the invitation to bid to specifically set forth the amount attributable to the tabbing charges per 1,000 in Exhibit A. Nonetheless one may infer that the cost per 1,000 for tabbing is the same as is set forth in Exhibit B. Paragraphs 15 through 17 are subordinate to facts found. Paragraph 18 constitutes legal argument. Respondent's Facts: Paragraph 1 is subordinate to facts found. Paragraph 2 is contrary to facts found Paragraph 3 is rejected in fact and law. Paragraph 4 is rejected in the suggestion that the Petitioner does not have the ability to perform the contract. COPIES FURNISHED: Daniel W. Dobbins, Esquire Callahan & Dobbins 433 North Magnolia Drive Tallahassee, FL 32308 Vytas J. Urba, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792 Jack McRay, General Counsel Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792 George Stuart, Secretary Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792 Informational Copies: Ronald W. Brooks, Esquire Brooks and LeBoeuf, P.A. 863 East Park Avenue Tallahassee, FL 32301 Joan Reeves, Vice President Educational Clearinghouse Post Office Box 3951 Tallahassee, FL 32315
Findings Of Fact On August 31, 1994, the Respondent received and opened bids for its Project No. HSMV 92044000, Repairs, Art Sutton Drivers' License Office, Miami, Florida (the Project). The bid specification documents (the Specifications) for the Project included requirements for a Base Bid and for specific alternate proposals with respect to three defined items of alternate work. Section 01100 of the Specifications stated that "[a]ll Alternates described in this Section are required to be reflected on the Bid Form as submitted by the bidder." Part 2 of that section provided: ALTERNATE NO. 1 A. Provide a deductive price to the base bid for the removal of existing window units and the installation of new units as indicated in plans and specification Section 08520. ALTERNATE NO. 2 A. Provide a deductive price to the base bid for the provision of communications conductors see specification Section 16400. ALTERNATE No. 3 A. Provide a deductive price to the base bid for the installation of all landscape materials as indicated on plans and as per specification Section 02960. Also included in the Specifications as Exhibit 4 was a Proposal Form. The Specifications required each bidder to submit this form in triplicate on the bidder's letterhead. With respect to alternates, the Proposal Form required: With the foregoing as a Base Bid, the following costs of alternate proposals are submitted in accordance with the drawings and specifications. Alternate No. 1 Add or Deduct $ Alternate No. 2 Add or Deduct $ Alternate No. 3 Add or Deduct $ The Respondent's architect received four bids on August 31, 1994. As recorded on the Bid Tabulation and Notice of Award Recommendation, three bidders provided specific prices for the three alternates, as well as a Base Bid. The Bid Tabulation shows that two bidders provided specific prices for the three alternates and included the alternate prices in their Base Bids. The Petitioner provided specific prices for the three alternates, but excluded the alternate prices from its Base Bid. The fourth bidder provided a specific price for only one alternate and excluded that alternate price from its Base Bid. (The fourth bidder was disqualified as non-responsive for failing to submit prices on all three alternates.) In pertinent part, the Petitioner's proposal read: With the foregoing as a Base Bid, the following costs of alternate proposals are submitted in accordance with the drawings and specifications: Alternate No. 1 Add or Deduct . . . $4,400.00 Alternate No. 2 Add or Deduct . . . $1,158.00 Alternate No. 3 Add or Deduct . . . $2,084.00 These Alternates were in addition to the Petitioner's Base bid of $204,322.00. The proposal form submitted by the Petitioner comports with Exhibit 4 to the Specifications, which was the mandatory Proposal Form. On August 31, 1994, William Phillip Austin, Peitioner's President, wrote the architect: Per our telephone conversation this date regard- ing the confusion relating to the Add/Deduct for Alternates 1, 2 and 3 for the above project, please be advised that our base bid did not include the work described in the Alternates. As stated if you want work described in Alternates 1, 2 and 3, you must add the cost to our base bid. The base bid including Alternates 1, 2 and 3 would, therefore, be $211,964.00. If we can provide additional information, please do not hesitate to contact us. The Respondent's architect completed and submitted the bid Tabulation and Notice of Award Recommendation to the Respondent in early September. The document clearly discloses the amounts of each bidder's Base Bid and Alternate proposals. Using plus (+) and minus (-) signs, the Bid Tabulation further shows each bidder's method of calculation. The record is devoid of evidence that the Respondent had any problem in evaluating the bids and identifying the lowest bidder. The Petitioner was the lowest bidder on any combination of base bid plus or minus any or all alternates. Subsequently the Petitioner received a NOTICE OF AWARD RECOMMENDATION dated October 4, 1994. The Notice informed the Petitioner that the Respondent "has recommended that the contract be awarded to your firm in the total amount of $211,964.00, accepting the Base Bid and Alternates #1, #2 & #3. The Administrator of Contracts Design and Permitting, Division of Building Construction, Department of Management Services, State of Florida will consider this recommendation." Larry R. Coleman, Construction Projects Administrator, signed the letter. The Petitioner acknowledged receipt. A representative of the second lowest bidder, Kalex Construction, then contacted the Respondent, complaining of the Award Recommendation. The grounds for the Kalex complaint are not in the record. However, on October 14, 1994, H. R. Hough, the Respondent's Contracts Administrator, sent the Petitioner a letter "to notify you of the State's decision to reject all bids on the above referenced project due to ambiguities in the specifications." Mr. Hough's reasons for the rejection are "other than those stated by the protestor," Kalex. The Respondent's Rule 60D-5.007, Florida Administrative Code, states: Determination of Successful Bidder. All projects except where competitive bidding is waived under the provisions of Rule 60D-5.008 will be publicly bid in accordance with the provisions in the project specifications bidding documents. Award of contract will be made to the responsive bidder, determined to be qualified in accordance with the provisions herein and meeting the requirements of the bidding documents, that submits the lowest valid bid for the work. The lowest bid will be determined as follows: The lowest bid will be the bid from the responsive bidder that has submitted the lowest price for the base bid or the base bid plus the additive alternates or less the deductive alternates chosen by the Agency to be included in or excluded from the proposed contract, taken in numerical order listed in the bid documents. The order of the alternates may be selected by the Agency in any sequence so long as such acceptance out of order does not alter the designation of the low bidder. Under the above-quoted rule, the Respondent compares bids beginning with the lowest "base bid." The Respondent is of the view that for this comparison to be fair and equal, all bidders must include the same scope of work in the "base bid." The Respondent does not interpret the above-quoted rule to allow deductive alternates from some bidders and additive alternates from others. (For reasons discussed in the Conclusions of Law which follow, the Respondent's interpretation and application of the above-quoted rule is erroneous.) The Specifications contain some ambiguous and inconsistent language regarding whether alternates should be treated as additive or deductive. The ambiguous and inconsistent language did not provide any bidder with an advantage or a disadvantage, nor did it otherwise affect the fairness of the bidding process.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Management Services issue a Final Order in this case awarding a contract for the subject project to the Petitioner. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of December 1994. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of December 1994. APPENDIX The following are my specific rulings on all proposed findings of fact submitted by all parties. Proposed findings submitted by Petitioner Paragraph 1: This is primarily a statement of position and is addressed in the Preliminary Statement. Paragraphs 2 through 10: Accepted in substance with a few unnecessary details omitted. Proposed findings submitted by Respondent Paragraphs 1 through 6: Accepted in substance. Paragraph 7: First sentence accepted in substance. Second sentence rejected as constituting a conclusion which is not warranted by the evidence. Third sentence is accepted as an accurate statement of how Respondent has been interpreting the subject rule, but is not accepted as constituting a correct interpretation of the rule. Paragraph 8: Rejected as misleading and confusing because the "scope of work" to be performed under the contract can only be determined after the Respondent decides which alternates to include and which to exclude. Paragraph 9: The first two sentences are accepted in substance. The last sentence is rejected as constituting a conclusion which is not warranted by the evidence. COPIES FURNISHED: Timothy J. Armstrong, Esquire Armstrong & Mejer Suite 1111 Douglas Centre 2600 Douglas Road Coral Gables, Florida 33134 Stephen S. Mathues, Esquire Department of General Services Knight Building, Suite 312 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Paul A. Rowell, General Counsel Department of General Services Knight Building, Suite 312 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 William H. Lindner, Secretary Department of General Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
Findings Of Fact In order to meet its need for new equipment in the new district administration building, the School Board advertised for competitive bid proposals for clerical, professional task, guest and conference chairs (task seating). Five bids were timely received by the School Board, two of which were determined to be responsive. The bid opening occurred on April 17 1990, and the Knoll Source was determined to be the lowest responsive bidder. In spite of this determination, the bid was rejected by the Director of Purchasing or the appointed designee because sales tax was not included in the bid. The Notice of Award was issued to Haworth, who submitted its bid showing the price it was willing to accept for the sale of the task seating, with and without sales tax. The initial decision to reject the Knoll Source bid, which was $10,393.72 less than Haworth in Sequence I; $12,231.94 less in Sequence II; and $994.17 less in Sequence III, was based upon Section 9.2.2.a in the "Instructions to Interior Bidders". This section of the bid documents provided that the contract for purchase of the task seating would not be exempt from sales tax. This bid specification is incorrect because the School Board does not pay sales tax on acquisitions of furnishings for the Pinellas County School System. Knoll Source was aware of the School Board's sales tax exemption prior to its bid submission. As Section 9.2.2.a of the instructions was inappropriate, the vendor relied on Section 9.2.2.c, and excluded sales tax from the bid because the cost of such tax was not applicable. Section 9.2.2.c instructed bidders to exclude inapplicable taxes from their bids. Pursuant to Section 5.3.1 of the bid instructions, the School Board has the right to waive any irregularity in any bid received and to accept the bid which, in the Board's judgment, is in its own best interest. The Knoll Source and Haworth bids can be comparatively reviewed, and Knoll Source is the lowest responsive bidder if the failure to include sales tax in the bid amount is waived by the School Board. It is in the Board's best interest to waive Knoll Source's failure to include a sales tax in the bid because sales tax does not apply to this purchase.
The Issue The issue is whether Respondent lawfully awarded the main-line food contract to Mutual Distributors, Inc., and, if not, whether Respondent is required by law to award the contract to Petitioner.
Findings Of Fact Background This case arises out of Respondent's award of contracts for main-line food and snack foods and beverages. Through these contracts, Respondent obtains the delivery of 334 different items--297 items of main-line food and 37 items of snack foods and beverages--to over 160 sites for preparation and service to Respondent's students, teachers, and noninstructional staff. During the school year, Respondent serves over 150,000 meals daily, and the Director of Respondent's Food Service Operations manages an annual budget of $55 million. The two relevant bidders in this case are Petitioner and Mutual Distributors, Inc. (Mutual). These are the only bidders that submitted nondisqualified bids for the main-line food contract. Petitioner and Mutual also submitted bids for the snack foods and beverages contract. A third bidder, Magic Vending, also submitted a bid for the snack foods and beverages contract. Mutual has held Respondent's main-line food contract in the past. However, for at least the past seven years, Petitioner has held the main-line food and snack foods and beverages contracts. Petitioner was the only bidder for the main-line food contract for the 1996-97 school year, and, pursuant to a provision of that contract, Respondent renewed this contract for the 1997-98 school year. Petitioner presently supplies school food for the school districts in Dade, Palm Beach, Collier, Lee, Indian River, Martin, St. Lucie, Hardee, Hendry, DeSoto, and Glades counties. The size of the Hillsborough school district limits the number of vendors capable of handling the main-line food contract, although nothing in the record suggests that either Petitioner or Mutual lacks the resources to provide the specified food in a timely fashion. Invitation to Bid By Invitation to Bid dated April 30, 1998, concerning Bid Number 3743-HM (ITB), Respondent solicited bids for two product groups: main-line food, which consists of frozen entrees, frozen foods, canned goods, and staples, and snack foods and beverages. The cover sheets to the ITB advise all interested parties that Respondent would accept sealed bids until 3:00 P.M. on May 26, 1998. The cover sheets state that, on or about June 16, 1998, Respondent would award the contract, which would be in effect August 6, 1998, to August 5, 1999. The cover sheets state that Respondent would make its decision "in the best interest of the District " The cover sheets require that all bids incorporate the following language: POSTING OF RECOMMENDATIONS/TABULATIONS Recommendations and Tabulations will be posted at the Hillsborough County School District, Purchasing Department, 901 East Kennedy Boulevard, 3rd Floor, Tampa, Florida 33602 at 10:30 A.M. on 06/11/98 for seventy-two (72) hours. Actions against the specifications or recommendations for award shall follow F.S. 120.53. Procedures are available and on file in the Purchasing Office at the address listed above. The cover sheets identify the schedule of bidding events. The month of April would be for testing new products and evaluating the nutritional information of approved brands. April 30 would be the date of mailing draft copies of the ITB to all interested persons. May 8 would be the date of the pre-bid conference, at which interested persons could bring product information forms for possible approval of other products than those tentatively specified in the ITB. The cover sheets reserved a couple of days immediately after the pre-bid conference for testing any additional new products. The schedule listed May 13 as the date on which Respondent would mail the final copy of the ITB to interested persons. The schedule states that Respondent would review bids and conduct a "pre-award audit," if necessary, from May 26 through June 3. Part I of the ITB contains "general terms and conditions." Part I states: When an item appearing in this bid document is listed by a registered trade name and the wording "no substitute, bid only or only" is indicated, only that trade-named item will be considered. The District reserves the right to reject products that are listed as approved and wa[i]ve formalities. Should a vendor wish to have products evaluated for future bid consideration, please contact, in writing, the buyer listed on the 2nd page of this bid. If the wording "no substitute, bid only or only" does not appear with the trade name, bidders may submit prices on their trade-named item, providing they attach a descriptive label of their product to this proposal. Sample merchandise bid hereunder as "offered equal" may be required to be submitted to purchase in advance of bid award. Substitutions of other brands for items bid, awarded and ordered is prohibited except as may be approved by the supervisor of purchasing. Part I of the ITB includes a number of "stipulations" that are deemed a part of all bids. The stipulations provide: Tabulations of this bid will be based only on items that meet or exceed the specifications given in Part III. All other lesser items will not be considered. Failure to submit, at time of bid opening, complete information as stated in Part III can and may be used as justification for rejection of a bid item. The bidders will not be allowed to offer more than one product/price/service on each item even though the vendor feels that they have two or more types or styles that will meet specifications. If said bidder should submit more than one product/price on any item, all prices for that item will be rejected. . . . The District reserves the right to reject any and all bids or parts thereof, and to request a re-submission. The District further reserves the right to accept a bid other than the lowest bid, which in all other respects complies with the invitation to bid and the bid document, provided that, in the sole judgement and discretion of the District, the item offered at the higher bid price has additional value or function, including, but not limited to: life cycle costing, product performance, quality of workmanship, or suitability for a particular purpose. . . . All bids shall be evaluated on all factors involved, including the foregoing, price, quality, delivery schedules and the like. Purchase orders or contracts shall be awarded to the responsible offeror whose proposal is determined to be advantageous to the District, taking into consideration the factors set forth above and all other factors set forth in the request for bid as "lowest or lowest and best bid." The information called for on the item must be on the line with the item. When omitting a quotation on an item, please insert the words: no quotation, no bid or n/b. to eliminate any confusion about the item(s) being bid. . . . Any requirement by the bidder that certain quantities, weights, or other criteria must be met, in order to qualify for bid prices, will result in disqualification of the bid. Likewise, expiration dates or other constraints, which are in conflict with bid requirements, will result in disqualification. Bids may not be changed after the bid closing time. The exception would be if there was a misinterpretation of the unit for which the bid was requested. In which case, no dollar amount change would be allowed, and only a clarification as to the unit your bid represents will be considered. This must be done in writing 24 hours after notification to the bidder from the supervisor of purchasing. The submittal of a bid proposal shall constitute an irrevocable offer to contract with the District in accordance with the terms of said bid. The offer may not be withdrawn until or unless rejected or not accepted by the District. . . . 13. The District shall be the sole judge as to the acceptability of any and all bids and the terms and conditions thereof, without qualifications o[r] explanation to bidders. 27. This bid and the purchase orders issued hereunder constitute the entire agreement between the School District and the vendor awarded the bid. No modification of this bid shall be binding on the District or the bidders. 30. Variance in condition--Any and all special conditions and specifications attached hereto which vary from general conditions shall have precedence. Part II of the ITB contains "special terms and conditions." Section A of Part II explains that the purpose of the ITB is to establish a "'cost plus fixed fee per carton' annual contract for the delivery of main-line food and snack and beverages . . .." Section A projects that the annual value of Group A and Group B will be $8.5 million. Section A explains that the "product cost" is the vendor's actual cost, including delivery to its warehouse. The "fixed fee" is the difference between the vendor's cost and its selling price to Respondent. Section A notes that, while Respondent’s cost price may vary during the term of the contract, the fixed fee shall remain unchanged. However, Section K fixes the cost prices until December 31, 1998. As used in this order, "total cost" refers either to the total costs per item (i.e., the unit costs times the projected number of units to be purchased) or the total costs of all items, and the "bottom-line cost" is the total of the total costs of all items plus the fixed fee. The fixed fee includes the bidder's profit and is calculated by multiplying the fixed fee per carton, as stated in the bid, times the number of cartons actually delivered. Section B states: Bids will be awarded on the total bottom line cost and fixed fee for each group. To be considered for an award, the vendor must bid on each item within each group. Failure to bid on each item within each group will disqualify the vendor for the bid award. A distributor may choose to bid on both groups, or on only one group. In the event of default or non- availability of product, the School District reserves the right to utilize the next rated low bidder and their stated bid prices as needed. Sections C and D explain that the term of the contract is one year, ending August 5, 1999, but the parties may extend the term, in one-year increments, through August 5, 2001. Section G provides that potential bidders "may attend a pre-bid conference," but attendance is not mandatory. Section G identifies the time, date, and place of the pre-bid conference. Section G adds: If you wish to submit additional brands within a current product description for approval, you must bring from the appropriate broker/rep, a District product information form with all requested attachments to the conference. Do not bring samples. We will evaluate the product information forms and determine if testing an additional brand is necessary at this time. Submitting a product information form does not guarantee that the product will be tested. Samples must be made immediately for any product information forms submitted. Section H states: To be considered for an award, the vendor must bid on each item within each group. Failure to bid on each item within each group will disqualify the vendor for that group bid award. Section I provides: After the opening of the bids, school officials will review the line-by-line prices. Accuracy of additions and extensions, brands, and compliance with all instructions will be reviewed in order to ascertain that the offer is made in accordance with the terms of the request for bid proposal. School officials who find any error(s) in calculations will adjust the bottom line figure accordingly. However, if errors are found which either disqualify the bidder, or will raise the bottom line offer to the point where the vendor may no longer be the apparent low bidder, school officials will review the line-item prices of the next lowest bidder. This procedure will continue until a suitable offer is selected. During the review of the low bid, school officials may audit invoices or quotations on selected items for the accuracy of cost prices quoted. The extent of this audit will be at the discretion of school officials. In reviewing bids, school officials reserve the right to waive technicalities when it is in the best interest of the school system. Section O states that vendors must deliver "the brand that is quoted on the bid sheet." If vendors are "temporarily out-of-stock of a particular item, they must deliver an equal or superior product at an equal or lower price with prior approval of the District Food Service Department." Section O warns that "[e]xcessive occurrences of out-of-stock items is cause for contract cancellation." Part III of the ITB contains "instructions for completing bid sheets," followed by 65 pages of bid specifications for main-line food and nine pages of bid specifications for snack foods and beverages. Each page of specifications contains several rows, with each row devoted to a separate item, and seven columns, with the columns labeled as item number, product descriptions, approved brands, bid unit, unit cost, estimated annual usage, and total cost. Part III provides detailed instructions for describing the items bid and listing the costs for each item. Detailed specifications describe each of the items to be bid. Under "product descriptions," the two paragraphs of Section B address the issue of domestic versus imported products. The first paragraph describes products that the winning bidder may purchase, but the second paragraph limits items than can be bid. The two paragraphs state: Except for items normally not produced in the United States commercially, the contractor should make every effort to purchase domestic products. Products may be allowed from outside the United States provided specifications are met and there is a significant price differential between imported products and those produced within the States. Written documentation of these price differentials must be provided in writing to the School District by the distributor prior to the approval of such purchases. Please note: for purposes of awarding the bid, all distributors shall bid domestic products (pineapple exempt). Under "product descriptions," Section C provides: The contractor must bid on the approved brands (Column 3), packer label or house label for all items. If Column 3 is blank, the School Board will accept the brand quoted provided it meets the product description. For example, if bidding on a distributor's choice of pasta, the contractor would enter the following: Brand: Prince Product Code: 5115 If bidding on a distributor group label for green beans, the distributor must stipulate the code designation which may be a color or label, that denotes a product as being a particular grade. For example, Brand: North American/Larson Product Code: Blue If bidding a packer label the bidder must stipulate the name of the packer and the grade label designation, for example: Brand: Larsen Product Code: Lake Region For all packer label products Hillsborough County School Food Service Form "Private Label Chart for Fruits and Vegetables" (see Attachment D) must be completed and returned with the bid. Under "product descriptions," Section D states: "Bidder shall enter the grade of the brand offered only for those line items where grade is specified. " Under "approved brands," Part III provides: The bidder must bid on the approved brand and product code that is listed. If the column states "house brand," the School Board will accept the brand quoted provided it meets the product description. Some of the code numbers listed may be obsolete or incorrect, in which case the contractor may enter the correct code and submit written documentation provided by the manufacturer, verifying the correct code number. If any inconsistency exists between the approved brands and/or code numbers and the product description, the approved brand/code number will prevail. The decision as to whether a product does or does not meet the description provided in column 2 is at the discretion of the School District. A bidder may be requested to furnish acceptable confirmation from a packer that a product meets the requirements set forth in Column 2. Whenever approved brands are listed with house brands, the distributor's choice brand should be of equal or better quality than the approved brands listed. Buying group brands and codes are acceptable on frozen and canned fruits, vegetables, and juices, however, on further processed and manufactured foods the contractor shall quote a packer's brand. For example, a contractor may quote "Ore-Ida #1234, packed under the 'Code Red Label.'" Pre-Bid Conference Hank Morbach, Principal Buyer of Respondent's Purchasing Department, conducted the pre-bid conference on May 8. Also representing Respondent at the conference were Mr. Morbach's immediate supervisor, William Borrer, who is the Supervisor of Purchasing; Sherry Ebner, who is a Supervisor of Food Service Operations and a registered dietitian; and Mary Kate Harrison, who is Director of Food Service Operations, a registered dietitian, and Ms. Ebner's immediate supervisor. Minutes of the pre-bid conference reveal that Mr. Morbach and Ms. Ebner told the persons in attendance that they did not have to bid both groups, but must bid all items within the group for which they were submitting a bid. In response to a question from Mutual's representative, Mr. Morbach said that the bottom-line cost, not the fixed fee, would be the "deciding factor." In response to a question from Petitioner's representative, Mr. Morbach stated that, where code numbers were omitted for any item, specifications would prevail. The minutes disclose a discussion regarding imported versus domestic products. Although Respondent's representatives were initially ambivalent, Mr. Morbach "clarified by stating all products must be domestic." Likely, everyone understood that pineapples could still be imported. Following the pre-bid conference, Respondent issued a revised ITB on May 13. Presumably, the ITB identified as Joint Exhibit 1 is the revised ITB, so all references in this order to the ITB are to the ITB as it was finally revised. Adverse Publicity Toward the end of the pre-bid conference, a representative of the Weekly Planet appeared. The Weekly Planet is a free weekly Tampa newspaper, and the representative was a reporter, who, since October 1997, had written several articles asserting, at least by implication, that Respondent's food program suffered from excessive costs, favoritism, and possibly even wrongdoing. Part of the adverse publicity concerned Ms. Harrison's husband, who represented several manufacturers from which Petitioner had purchased food for resale to Respondent while Petitioner had the main-line food contract. The Weekly Planet published an article asserting that the husband of Ms. Harrison had lost a civil action brought by his employer for diverted commissions. By the time of the subject procurement, an internal audit had disclosed no conflict of interest on the part of Ms. Harrison, but had suggested that Respondent add personnel in Food Service Operations to monitor vendor compliance and seek more competition in awarding the food contracts. To Ms. Harrison's credit, since her employment with Respondent in 1990, she has converted a food service program that was losing $2.5 million annually into a profitable operation. The record suggests, though, Respondent's staff was extremely sensitive during this bidding process to the adverse publicity surrounding Respondent's business relationship with Petitioner. The Bids Four bidders timely submitted sealed bids for the main-line food contract. However, Respondent promptly disqualified two of the bidders because they did not submit complete bids. One disqualified bidder submitted a bid that was incomplete, unsigned, and omitted five items in the main- line food group. The other disqualified bidder submitted an incomplete bid with only six items in the main-line food group. After submitting their bids, Petitioner and Mutual each sent Respondent letters stating that each bidder did not want the snacks and beverages contract unless it also received the main-line food contract. Respondent did not object to these late-attached conditions to the two bids and did not consider either bidder for only the snack foods and beverages contract. As provided in the ITB, Respondent's staff contacted bidders, after bid opening, to confirm that certain bid items complied with the specifications. By letter dated June 3, Respondent asked Mutual for documentation that 41 listed items met the specifications, that the Fineline/Paris brand that Mutual had bid is Grade A quality, and for a complete private label chart for all canned and frozen fruits and vegetables. The letter requests a response by June 5. By letter dated June 10, Respondent asked Petitioner for documentation that thirty-seven listed items met the specifications and for a complete private label chart for all canned and frozen fruits and vegetables. The letter requests a response by June 12. Respondent wrote each bidder follow-up letters. In a letter dated June 12, Respondent asked Petitioner to document that five items met the specifications, and, in a letter dated June 15, Respondent asked Mutual to document that the same five items met the specifications. The deadlines in both letters were June 16. Mutual and Petitioner responded to these requests for additional information. By letter dated June 5, Mutual disclosed that Items 202 (broccoli), 300 (apple slices), and 366 (raisins) were imported. After receipt of the responses from the bidders, Respondent's employees further reviewed the bids. Early in this review, Respondent's employees realized that neither bid had complied entirely with the specifications. Among the deficiencies of Mutual's bid was the failure to quote a cost for Item 114, which is chicken wings. Mutual's bid identifies only a product, but no cost. Mutual's bid includes a cost for each of the other 296 items and a total cost, presumably for all 297 items. The ITB projects annual purchases for each of the 297 items. The ITB projects the purchase of 283,044 chicken wings. Petitioner bid 12.5 cents per chicken wing for a total cost of $35,309.50. Mr. Morbach justifiably tried to deduce Mutual's quote for chicken wings from the information contained in its bid. He logically assumed that the cost for Item 114 would be the difference between the total cost shown on Mutual's bid, which is shown on the bid, and the total cost for the other 296 items, which must be calculated separately. The details of Mr. Morbach's calculations did not emerge at the hearing, but it is possible to perform these calculations. Mutual's bid shows a total cost for all 297 items of $8,131,470.29. The total costs of each of the quoted 296 items comes to $6,785,080.14. The difference is $1,346,390.15. This figure clearly does not represent Mutual's bid for chicken wings, which would be thirty-eight times greater than Petitioner's bid and would representative the extraordinary cost of $4.75 per chicken wing. The calculations in the preceding paragraph are taken from Mutual's bid, including all changes shown on the bid, as it was submitted, that were made by Mutual. Mutual's representative initialed these changes. The calculations exclude all adjustments made by Respondent's staff because these calculations, which were made after bid opening, logically have no relevance in determining what, if anything, Mutual quoted for chicken wings. These adjustments can play no role in trying to determine, on the face of Mutual's bid, what it intended to bid for chicken wings. In addition to omitting the cost of one item, Mutual failed to bid numerous other items according to the specifications. Petitioner also failed to bid certain items according to the specifications, although Petitioner's bidding errors are fewer in number and less serious than Mutual's bidding errors. Incorporating the information charted by Food Service Operations staff, the following 25 paragraphs identify the errors in both bids. Item 121 is frozen Grade A turkey roasts with a 60/40 ratio of light to dark meat. Mutual's bid does not reveal the extent of white meat or whether the turkey roast is Grade A meat. Petitioner's bid does not reveal whether its turkey roast is Grade A meat. Item 128 is frozen corn dogs. Mutual bid an unapproved code number for an approved brand. Petitioner's bid complied with the specifications. This is a relatively large component of the overall bid, representing over $160,000 in each of the bids. Item 146 is natural swiss cheese. Mutual bid processed cheese. Petitioner's bid complied with the specifications. Item 202 is Grade A cut broccoli in bulk. Mutual bid an imported product. Petitioner's bid complied with the specifications. Item 220 is shoestring French-fried potatoes. Mutual bid a shorter French-fried potato than specified. Petitioner's bid complied with the specifications. Item 223 is shredded triangle potatoes. Mutual and Petitioner bid the same products, but Mutual's bid did not contain required information regarding grade, oil, and region grown. This is a relatively large component of the overall bid, representing over $140,000 in each of the bids. Item 232 is soft eight-inch tortillas weighing 1.39 ounces per serving. Mutual and Petitioner bid the same product, which weighs only 1.29 ounces per serving. Item 300 is canned sliced apples. Mutual bid an imported product. Petitioner's bid complied with the specifications. Item 328 is light, 26-percent concentration tomato paste. Mutual bid a product that does not meet the minimum- concentration specification. Petitioner's bid complied with the specifications. Item 335 is boneless chicken meat that is predominantly white meat. Mutual and Petitioner bid the same brand, but different product code numbers. Mutual's bid is not predominantly white meat. Petitioner's bid complied with the specifications. Item 366 is seedless raisins. Mutual bid an imported product. Petitioner's bid complied with the specifications. Item 399 is 100 percent semolina, spiral macaroni. Mutual's bid complied with the specifications. Petitioner bid a twisted egg noodle, instead of eggless spiral pasta. Item 431 is sugar sprinkles from one of five approved brands. Mutual bid an unapproved brand. Petitioner's bid complied with the specifications. Item 448 is instant yeast. Mutual's bid includes information on a product that it did not bid. Petitioner's bid complied with the specifications. Item 474 is Grade A Fancy apple jelly with no less than 65 percent soluble solids, and Item 475 is Grade A Fancy grape jelly with no less than 65 percent soluble solids. Neither bid provides sufficient information to determine if it met the specifications on either of these items. Item 480 is Dijon mustard. Mutual bid Dijon-style mustard. Petitioner's bid complied with the specifications. Item 484 is whole pitted medium, ripe olives. Mutual bid an imported product. Petitioner's complied with the specifications. Item 492 is whole, kosher pickles of approximately 95 in number per five gallon pail. Mutual and Petitioner bid larger pickles than specified. Item 505 is 50-grain white vinegar. Neither Mutual nor Petitioner provided the information necessary to determine if its bid complied with the specifications. Items 301, 308, 309, 323, and 331 are, respectively, unsweetened canned applesauce, crushed canned pineapple, sliced canned pineapple, canned pumpkin, and whole canned tomatoes. For each of these items, Mutual's bid did not provide the label to prove quality. Petitioner's bid complied with the specifications. Item 325 is Grade A canned sweet potatoes. Mutual and Petitioner both bid Grade B. Item 212 is yellow frozen squash. Mutual bid an imported product. Petitioner's bid complied with the specifications. Respondent's staff also noted on the chart that the yellow frozen squash was the second item manufactured by Fineline that was imported (the other was Item 202), and staff noted that it was "unable to determine if other frozen vegetables bid by this manufacturer are domestic as grading certificates were not provided." Mutual bid Fineline products for Items 201 (lima beans), 205 (corn), 208 (okra), 209 (peas), 211 (spinach), 214 (Italian-style vegetable blend), and 215 (Oriental-style vegetable blend). Cumulatively, the Fineline frozen vegetables represent a moderately large part of the overall cost, in excess of $53,000 of Mutual's bid. Coupled with the fact that two Fineline products were imported, Mutual's failure to demonstrate affirmatively that these produce are domestic constitutes additional failures to comply with the specifications and supports the inference that the products are imported. In an earlier version of their chart showing bidding errors, Respondent's staff identified problems with Items 217-19, 221-22, and 224. These are potatoes that the ITB specifies must be from the Pacific Northwest and processed in 100 percent canola oil. Respondent's staff determined that it was impossible to identify the source of these potatoes. However, Petitioner was able to document that some, but not all, of the potatoes that it bid for these six items were from the Pacific Northwest. In addition to failing to bid a cost for Item 114 and misbidding the numerous items charted by Respondent's staff, Mutual's bid failed to comply with the specifications for four other items. Item 229 is a frozen Gyro Wrap. Mutual bid a pita- fold bread product, even though a more expensive Gyro Wrap is available from the same manufacturer. Petitioner's bid complied with the specifications Item 378 is pure almond extract flavoring. Mutual bid an imitation flavoring. Petitioner's bid complied with the specifications. Item 402 is thin spaghetti of .062-.066 thickness in diameter. Mutual bid a thin-spaghetti product of 1.6 thickness in diameter. Petitioner's bid complied with the specifications. Item 456 is pancake syrup. Mutual bid an invalid code number. Petitioner's bid complied with the specifications. The parties devoted some attention during the hearing to Item 483, which is green olives. Mutual and Petitioner bid imported green olives, but domestic green olives are not available, at least in institutional quantities, so compliance with the specification of domestic green olives was impossible. Bid Evaluation and Award When Ms. Ebner informed Mr. Morbach of the errors that she had found in both bids, he suggested that they should eliminate the same item from both bidder's bids, if one bidder improperly bid the item. For example, if Mutual misbid fruit cocktail and Petitioner properly bid fruit cocktail, Respondent would delete the cost of fruit cocktail from both bids. The purpose of this adjustment, which reportedly is not atypical in school food procurements, is to avoid the unfair result of lowering the noncompliant bidder's bid, by reducing it for the cost of the misbid fruit cocktail, and leaving the compliant bidder's bid higher by the amount of the properly bid fruit cocktail. Ms. Ebner and Ms. Harrison agreed with this suggestion, and Respondent tabulated the bid costs accordingly. Mr. Morbach also suggested that they consider the bid of one of the disqualified bidders. Ms. Ebner disagreed with this suggestion. She rightly believed that they should not reconsider a bid that did not contain all of the specified items, and Mr. Morbach did not press the matter further. Although Ms. Ebner spoke daily with Ms. Harrison and Mr. Morbach, there were three larger meetings in late June and early July concerning the bids. The first meeting was during the week of June 22, the second meeting was early in the week of June 29, and the third meeting was on the Friday of that week, July 3. The only participants at the first of the three meetings were Ms. Ebner, Ms. Harrison, Mr. Morbach, and Mr. Borrer. For the second meeting, these four persons were joined by Dr. Michael Bookman, the Assistant Superintendent for Business and Research, which includes overall responsibility for the Purchasing Department; Michelle Crouse, of the Auditing Department; and Lee Chistiansen, another of Respondent's staff. The persons present at the third and final meeting were the same as at the second meeting, except that Respondent's counsel, Mr. Few, replaced Ms. Crouse. At the first meeting, Ms. Ebner expressed her belief that Petitioner's bid was better than Mutual's bid because Petitioner's bid complied with more of the specifications. She also expressed concern about the ability of Magic Vending to service the snack foods and beverages. Ms. Ebner's preference for Petitioner's bid was partly the result of her misplaced emphasis on awarding both contracts to the same bidder. It is likely that, at the first meeting, Mr. Morbach or Mr. Borrer informed Ms. Ebner that nothing in the ITB required that Respondent award both contracts to the same bidder. At the first meeting, everyone confirmed their agreement to adopt Mr. Morbach's suggestion to discard the cost of any misbid item in both bids, even if only one bidder misbid the item. Everyone agreed that this approach would facilitate a better comparison of bottom-line prices. Respondent's decision to eliminate the cost of any misbid item from both bids, even if one bid correctly bid the item, encourages bidding abuses. A bidder knowing that a competitor can quote lower prices for a wide range, for instance, of chicken items can neutralize this advantage by misbidding each of the chicken items, forcing Respondent to award the bid without regard to the lesser costs quoted by the competitor for the chicken items. The potential destructive impact on competitive bidding is incalculable where, as here, this kind of bid-tabulation method is unaccompanied by a provision in the ITB rejecting a bid in its entirety if it misbids more than a specified number or value of items. The ITB does not authorize Respondent's method of tabulating misbid items. As already noted, Stipulation 2 allows Respondent to tabulate bids based only on items that meet the specifications, but nothing in Stipulation 2 or anywhere else in the ITB authorizes the deletion of quotes for items bid in compliance with the specifications. Part I of the ITB allows Respondent to reject approved products, but this provision is part of a discussion of items approved for bidding and does not authorized the rejection of a cost quoted for an approved product. Nor do Mr. Morbach and Ms. Ebner rely on Stipulation 2 to justify tabulating bid costs by eliminating the costs of any misbid items, even if only one bidder misbid the item. Mr. Morbach and Ms. Ebner believe that the 1998 ITB permitted this approach, but the 1996 invitation to bid for school food did not. However, both invitations to bid contain Stipulation 2. Respondent has not cited the difference between the 1996 and 1998 invitations to bid to justify the tabulation method adopted by Respondent in this procurement. Respondent's staff have relied on ITB provisions allowing Respondent to waive formalities or reject all bids for support of their tabulation method. However, even if these provisions were not in the 1996 invitation to bid, they do not authorize Respondent's tabulation method. Mr. Borrer may have implicitly acknowledged the inadequacy of the claimed authority in the ITB for Respondent's tabulation method when he sensibly deleted the following language from a draft memorandum dated June 25 and bearing his name, but drafted for his revision by another employee: Products that were inconclusive or failed to meet specification were eliminated from all bids for the purpose of data analysis. Purchasing is given this authority to eliminate products by bid specifications, statutory guidelines and Board policy. Item 4, Page 3 of the bid specifications states, "The District reserves the right to reject any and all bids or parts thereof, and request re-submission. The District further reserves the right to accept a bid other than the lowest bid. . ." In addition, Item I, Page 11 of the bid specifications states, "In reviewing bids, school officials reserve the right to waive technicalities when it is in the best interest of the school system." Also Board Policy H-5.6 states, ". . ., in accepting bids the School Board shall accept the lowest and best bid". (Legal Reference Florida Statutes 230.23, 237.02) The most succinct description of Respondent's tabulation method lacks much of a justification for its use. This description occurs in a typewritten question and answer that appears at the end of Petitioner Exhibit 36, but probably does not belong with that exhibit, which is a fax from Mr. Borrer to Respondent's counsel, Mr. Few. The question is, "Why did you choose to award the contract rather than re-bid after you determined that each vendor had made errors?" The answer states: Bids may not be rejected arbitrarily, but may be rejected and re-bid when it is in the best interest of the public (School District) to do so. . . . To re-bid without changing the bid would be unfair because the vendors had exposed their competitive price structure in public. Through the efforts of our skilled Food Service staff "errors" were discovered in products bid by Mutual and [Petitioner]. Since all vendors bid products that did not meet specifications, we determined that it would be proper to build a mathematical model in which we removed all identified items that did not meet specifications from both vendors. Our analysis based the award criteria on the same set of specifications and conditions for each vendor. Achieving comparability of food products was a complex time- consuming task. The award was recommended to go to the low vendor who would agree and be held to meeting our bid specifications at the price bid. Probably not more than one or two days after the date of the first meeting, Ms. Ebner prepared a draft memorandum, dated June 25, to Mr. Borrer, through Ms. Harrison. The draft memorandum states that Mutual bid 14 items not meeting specifications, and Petitioner bid three such items. The draft memorandum states that Mutual bid 11 items for which compliance was inconclusive, and Petitioner bid five such items. The draft memorandum also states that Mutual bid five imported items, despite the "discussion at the pre-bid conference that only domestic products were allowed." In the draft memorandum, Ms. Ebner recalculated the bottom-line costs of the bids of Petitioner and Mutual after discarding all costs for items that either bidder had misbid. She determined that Petitioner had the lowest snack foods and beverages bid. She also determined that Petitioner had the lower total bid for the main-line food and snack foods and beverages contracts. Still preferring an award of both contracts to a single bidder, Ms. Ebner concluded in the draft memorandum that Respondent should award both contracts to Petitioner, and Ms. Harrison concurred with Ms. Ebner's recommendation. At the same time, Mr. Morbach and Mr. Borrer were headed in the opposite direction from Ms. Ebner and Ms. Harrison. At the direction of Mr. Borrer, Mr. Morbach elicited a letter dated June 24 from Magic Vending to Mr. Morbach, in which Magic Vending stated: "As a follow up to our conversation and subsequent to our bid submission, we are prepared to offer you a reduction in our overall bid of $15,000." The letter concludes: "The purpose of this reduction is to make the overall award process run more smoothly and to remove any potential complications." Although Petitioner had already written Respondent expressing no interest in only the snack foods and beverages contract, Respondent obtained this cost concession, which made Magic Vending's bid lower than Petitioner's bid, in case Petitioner changed its mind. By letter dated June 26 from Magic Vending to Mr. Morbach, Magic Vending assured that it would "abide by all the rules and specifications in addition to giving a $15,000.00 discount . . .." The letter concludes with a well- earned expression of gratitude by Magic Vending for Mr. Morbach's "consideration in this matter." As for the main-line food contract, Mr. Borrer obtained from Mutual a one-line letter dated June 26 from Mutual stating: "This letter is to assure you that all products quoted by [Mutual] on bid #3743-HM will meet the specifications as required." At the second meeting between the staff of Food Service Operations and the Purchasing Department, which evidently took place after the Purchasing Department had received the correspondence from Mutual and Magic Vending, Food Service Operations staff continued to recommend that the contracts be awarded to Petitioner. Everyone discussed the errors in Mutual's bid and the fact that the Magic Vending bid was $5000 more than Petitioner's bid for the snack foods and beverages contract. It is unclear if Ms. Ebner or Ms. Harrison yet knew of the price concession of Magic Vending, but everyone discussed that it would be controversial to award the contracts to a bidder that was not the lowest bidder. Apparently in anticipation of the award ultimately made, Petitioner served Respondent, on July 1, with a Notice of Intent to Protest the award of both contracts. By letter dated the same date, Respondent informed Petitioner that it would not stop the procurement process due to the "critical importance of this bid and the serious danger to the health of our children." In fact, Mutual and Magic Vending have been supplying main-line food and snack foods and beverages, respectively, since early August 1998. At the third meeting between the staff of Food Service Operations and the Purchasing Department, everyone agreed to recommend that the School Board award the contracts to Mutual and Magic Vending. The discussion at this last major staff meeting largely involved the matters that they had previously discussed. Unfortunately, no one ever discussed at these or other meetings involving Ms. Ebner how many errors a bid could contain before it should be disqualified. Likewise, no one ever discussed with her the distinction between awarding a contract on the basis of the lowest bid and on the basis of the lowest and best bid. However, Ms. Harrison discussed with Ms. Ebner the safety issues presented by imported, rather than domestic, foods. On the day prior to the July 7 School Board meeting now designated for the School Board to vote on the awards, Ms. Harrison advised Mutual by letter that Respondent's staff would recommend Mutual, "provided that any and all products found not to meet specifications will be replaced with products meeting specifications at the original bid cost." Petitioner Exhibit 13, which is a copy of this letter, lacks the attachment listing the noncompliant items. At the bottom of the July 6 letter is a signature space for Mutual's representative, indicating assent to the following sentence: "Indicate, by signing below, that you are in agreement to provide all products meeting specifications, including USDA Grade A products, at the original bid price." Petitioner Exhibit 13 contains the signature of Mutual's representative. On July 7, the School Board met and gave Petitioner's counsel and corporate representative brief opportunities to explain why Respondent should not award the main-line food contract to Mutual. However, the Board did not give Petitioner's representatives sufficient time to convey much meaningful or detailed information. Mr. Few, Dr. Bookman, and Ms. Harrison supplied the Board with more information, but unfortunately never disclosed that Mutual's bid contained more errors than did Petitioner's bid and that Mutual's bid contained more errors involving more substantive matters than did Petitioner's bid, as discussed below. Contradicting the advice given by Mr. Morbach at the pre-bid conference and ignoring the contrary provision in the ITB and ignoring the distinction in the ITB between items that the winning bidder may purchase additional items that may be bid, Mr. Few advised the Board that the ITB expressed only a preference toward domestic products and cited the unique example of olives as support for this interpretation. Dr. Bookman advised the Board that Mutual had assured them that all items bid were Grade A. He was evidently unaware that, as explained below, Mutual had still not obtained Grade A turkey roast, even though Grade A turkey roast is available. As late as the final hearing, Ms. Ebner admitted that Mutual had still not corrected one or two noncompliant items, although it is unclear if one of them is the turkey roast. Notwithstanding staff's assurances, several Board members expressed misgivings at having to absorb a lot of detailed information in a short period of time. Ms. Harrison informed the Board that they did not have time to defer action, implicitly and correctly informing them that they did not have time to rebid the main-line food contract. One Board member replied that she wanted all of the food to be USDA approved and that parents had enough to be concerned about without being concerned about what Respondent was feeding their children. A motion to award the contracts to Mutual and Magic Vending failed by a 3-4 vote. A second motion to delay awarding these contracts passed 5-2, so that, individually, Board members could talk to staff to learn more about the bids and Petitioner's claim of bidding improprieties. The record does not reveal what staff told individual Board members. After a recess during which Board members, individually, met with staff, one of the Board members who had previously voted not to award the contracts moved to award the contracts to Mutual and Magic Vending, saying that Mutual had agreed to replace noncomplying products with products meeting the specifications. Relying on Mutual's promise to deliver conforming food items, as opposed to the noncomplying items that it had bid, this Board member reasoned that it was one thing to make a mistake with a bid, but another thing to make a mistake with the schoolchildren. The School Board unanimously approved the motion, and the meeting ended. By letter dated July 9 from Mutual to Mr. Borrer, Mutual addressed each of the 25 items charted by Respondent's staff, acknowledging that Mutual's bid had not complied with the specifications for nearly every charted item, but promising that Mutual would supply a product meeting the specifications for all of these items. However, concerning the moderately large component of the bid represented by Item 121 (turkey roasts, which represented over $62,000 in Mutual's bid), the letter states only: "Currently trying to locate an item to meet specifications." Bid Protest On July 10, Petitioner served Respondent with a Protest. The Protest asserts that Mutual's bid did not contain prices on all items, did not propose all domestic products, contained unapproved brands, bid unapproved product codes, and bid products different from those specified in the ITB. The Protest asserts that Respondent allowed Mutual to provide a letter after the deadline for receiving bids assuring that it would provide all Grade A product, as specified in the ITB. The Protest did not mention the snack foods and beverages contract awarded to Magic Vending. The Protest does not allege that Petitioner's bid is responsive. Respondent has not filed any responsive pleading raising the question of the responsiveness of Petitioner's bid. Respondent's Bid Policies Following receipt of Petitioner's Notice of Intent to Protest, Mr. Borrer sent a letter dated July 1 to Petitioner that contained Respondent's rules governing bids. This document, which is part of Petitioner Exhibit 37, is the source of Respondent's bidding rules set forth in the following two paragraphs. Respondent's rules provide for the protest of specifications as follows: Specifications—Any bidder that feels that their firm is adversely affected by an specification contained in a Sealed Bid or Request for Proposal issued by the Purchasing Department may file a written notice of protest with the Supervisor of Purchasing within seventy-two (72) hours after the receipt of the bid documents. . . . A formal written protest shall be filed by the bidder within ten (10) days of the written notice of protest. . . . These rules also provide for the awarding of costs, but not attorneys' fees, as follows: If, after the completion of the Administrative Hearing process and any appellate court proceedings[,] the School District prevails, then the School District shall recover all costs and charges which shall be included in the Final Order or Judgement, including charges made by the Division of Administrative Hearings, but excluding attorney's fees. . . . If the protestor prevails then the protestor shall recover from the School District, all costs and charges which shall be included in the Final Order or Judgement, excluding attorney's fees. Another source of Respondent's rules in the record is Chapter 7 of a compilation of Board policy that was applicable to the present procurement. This document requires that Respondent award bids "on the basis of the lowest and best bid which meets specifications with consideration being given to the specific quality of the product, conformity to the specifications, suitability to school needs, delivery terms and service and past performance of the vendor." Lastly, Mr. Borrer, by memorandum to the file dated July 9, noted that the two disqualified vendors were disqualified under Board Policy H-5.10, which states: "Bids received which do not meet specifications shall not be considered valid and shall not be tabulated." Ultimate Findings of Fact Bid Tabulation Method Is Clearly Erroneous, Contrary to Competition, and Arbitrary It is irrelevant whether the standard of proof governing a protest of specifications is a preponderance of the evidence or the more deferential standard, clearly erroneous, contrary to competition, arbitrary, or capricious. Petitioner has proved that Respondent's tabulation method is clearly erroneous, contrary to competition, and arbitrary. As already noted, Respondent's tabulation method potentially penalizes compliant bidders by eliminating their compliant items from the tabulation when a noncompliant bidder misbids the same item. The anti-competitive, arbitrary effect of this tabulation method may be ameliorated somewhat by the fact that the ITB is for a cost-plus contract. However, the ITB fails to impose any minimum requirement or threshold for compliant items, in terms of number or dollar volume--e.g., if a bid contains noncompliant items totaling more than one percent of the total cost bid, then the entire bid is rejected. This means that Respondent's tabulation method can destroy the competitiveness of the procurement by allowing a bidder purposefully or unintentionally to misbid a large number of items, resulting in the effective elimination of these items from the tabulation of bids submitted by bidders with superior access to these items. Under these circumstances, Respondent's selection of this tabulation method was clearly erroneous, contrary to competition, and arbitrary. Mutual's Bid Is Nonresponsive The standard of proof governing Respondent's determination that Mutual's bid was responsive is clearly erroneous, contrary to competition, arbitrary, or capricious. As already noted, it is impossible to deduce Mutual's quote for Item 114 from the face of Mutual's bid. A failure to quote a cost for an item is little different from a failure to bid the item. In the case of a complete omission, Respondent knows nothing of the item bid; in the case of the omission of only a quote, Respondent knows what item the bidder has bid, but not the cost of the item. The omission of the cost of a single item adequately described in the bid may be a minor irregularity, if the cost can be deduced by subtracting from the total cost of all items the total cost of all but the omitted item. Here, though, the difference between these amounts is clearly wrong, so that, if Respondent overlooks the omission, it leaves open the possibility of a later dispute over the cost of Item 114. Under the present circumstances, including the disqualification of two other bidders for omitting items, Respondent's failure to disqualify Mutual's bid was clearly erroneous, contrary to competition, and arbitrary. Mutual's Bid Contains Material Variances The standard of proof governing Respondent's determination that Mutual's bid did not contain material variances from the ITB is clearly erroneous, contrary to competition, arbitrary, or capricious. Food Service Operations staff identified numerous deficiencies in Mutual's bid. For Mutual's bid, Ms. Ebner's June 25 memorandum counts 14 items not meeting specifications and 11 items for which compliance is inconclusive due to Mutual's failure to submit the required documentation. Treating the misbidding of green olives and the potatoes specified in Items 217-19, 221-22, and 224 as minor irregularities due to the impossibility of compliance with the specifications concerning the origin of these items, Mutual's bid still reveals consequential deviations from the specifications. Using only the chart prepared by Food Service Operations staff and disregarding the green olives and six potato items, Mutual's consequential deviations from the specifications include five imported foods, two meat products that fail to contain the required ratio of light to dark meat (one of the meat products and another product also failing to demonstrate the proper Grade), a lower Grade of canned sweet potatoes, shorter French Fries, excessively diluted tomato concentrate and inadequate documentation of the dilution of two jelly products, processed instead of natural cheese, and a missing ingredient from Dijon mustard. Of all the witnesses, Ms. Ebner was most capable, by training, experience, and job assignment, of understanding the significance of the deviations in Mutual's bid. For instance, addressing the seemingly inconsequential matter of excessively diluted jelly, Ms. Ebner noted that Respondent had had problems with runny jelly not remaining on peanut-butter- and-jelly sandwiches. The nutritional consequences of this seemingly harmless deviation are students discarding peanut- butter-and-jelly sandwiches that have lost their jelly. In each of these consequential deviations from the specifications, Mutual bid a cheaper product than specified, which conferred upon it an unearned competitive advantage, and a product of lower quality than specified, which jeopardized the primary purpose of the specifications to ensure that Respondent obtained food of high nutrition, safety, and taste for students and staff. Any implicit or explicit determination by Respondent dismissing the charted findings of deviations by Food Service Operations staff or treating them as minor irregularities rather than material variances would be clearly erroneous, contrary to competition, and arbitrary. Besides the findings contained in the chart prepared by Food Service Operations staff, Mutual misbid several other items. The consequential deviations from the specifications included seven imported items, a cheaper pita- fold than the specified Gyro wrap, and a cheaper imitation almond flavoring for pure almond flavoring. Any express or implied finding by Respondent discrediting these deviations would be clearly erroneous, contrary to competition, and arbitrary. Although an express or implied determination by Respondent that these deviations, standing alone, are minor irregularities would not be clearly erroneous, contrary to competition, arbitrary, or capricious, such a finding concerning these deviations, together with the previously discussed deviations charted by Food Service Operations staff, would be clearly erroneous, contrary to competition, and arbitrary. The standard of proof governing the determination that Mutual submitted written assurances, after bid opening, that it would supply product in compliance with the specifications, is the preponderance of the evidence. However, the standard of proof governing findings of the significance of the submittal of these assurances is clearly erroneous, contrary to competition, arbitrary, or capricious. Any implied or express determination by Respondent that Mutual's written assurances were not an attempt to change its bid after bid opening would be clearly erroneous, contrary to competition, and arbitrary. As already noted, Petitioner has already proved, by this deferential standard, that Mutual's bid contained material variances from the specifications. The purpose of Mutual's written assurances was to eliminate these material variances, which, in fact, were still not entirely eliminated by the time of the final hearing. Petitioner's Bid Contains Material Variances Consistent with its determination that Mutual's bid is responsive and suffers no material variances, Respondent claims in its proposed recommended order that Petitioner's bid is responsive and contains no material variances. Respondent awarded the main-line food contract to Mutual because it submitted the lower bid. However, Petitioner demands the award of the main- line food contract, so it is necessary to consider whether its bid, which is clearly responsive, contains any material variances. Because of the resolution of this issue, it is unnecessary to consider whether Petitioner's bid contains any minor irregularities, for which Respondent's implied or express refusal to waive would be clearly erroneous, contrary to competition, arbitrary, or capricious. Using the chart prepared by Food Service Operations staff and disregarding the green olives and six potato items, Petitioner misbid only seven items. In fact, the record reveals no other misbid items by Petitioner. Several of Petitioner's misbid items are relatively inconsequential. These are a tortilla slightly lighter than specified, larger pickles than specified, and omitted documentation showing the grain of vinegar. Mutual misbid these items also. However, three of Petitioner's misbid items are consequential. Although Petitioner's bid reflects the specified ratio of light and dark meat, unlike Mutual's bid, Petitioner's bid of turkey roast fails, as does Mutual's bid, to provide sufficient documentation to show that it is Grade A. Like Mutual's bid, Petitioner's bid is for Grade B canned sweet potato and fails to provide documentation that the two jelly products are not excessively diluted. The only consequential deviation in Petitioner's bid not found in Mutual's bid is Petitioner's failure to bid an eggless pasta. However, the standard of reference for determining whether Petitioner's bid contains material variances is not Mutual's bid, but the ITB. Although considerably more compliant than Mutual's bid, Petitioner's bid, when measured against the ITB and the importance of obtaining nutritious, safe, and tasty food for Respondent's schoolchildren, also falls impermissibly short of the mark. Petitioner's consequential deviations from the specifications also mean cheaper items than specified, through which Petitioner would have obtained an unearned competitive advantage, and products of lower quality than specified, which would have jeopardized the primary purpose of the ITB to ensure that Respondent obtained high-quality food. Impossible specifications, like domestic green olives or six potato items from the Northwest, or the failure to comply in some minor respect, such as sugar sprinkles from an unapproved manufacturer or excessively large pickles, may constitute minor irregularities. But the failure to ensure that each of the 297 items bid complies substantially in quality is not. Thus, an implied or expressed determination by Respondent that Petitioner's bid contains no material variances would be clearly erroneous, contrary to competition, and arbitrary. Petitioner has failed to prove that Respondent is liable for attorneys' fees. There is no direct proof of any factual basis to award fees. Perhaps Petitioner infers an improper purpose from the fact that, despite the benefit of highly deferential standards of proof, Respondent has not prevailed. Obviously, Respondent's failure to prevail is due to several express or implied determinations that were clearly erroneous, contrary to competition, arbitrary, or capricious. If this fact alone warranted a fee award, all agencies would be liable for fees in every bid case that they lost. The absence of such a statutory provision reveals the Legislative intent not to make agencies strictly liable for attorneys' fees in bid cases. The better approach is to permit an inference of improper purpose, but only if the agency were aware or reasonably should have been aware that its handling of the award was not merely clearly erroneous, contrary to competition, arbitrary, or capricious, but was so egregiously so as to support an inference of improper purpose. Such is not the case here. There is no evidence of Petitioner's costs, and Petitioner did not request the administrative law judge to reserve jurisdiction or leave the record open for a later determination of costs.
Recommendation It is RECOMMENDED that the School Board of Hillsborough County enter a final order setting aside the award of the main-line food contract to Mutual Distributors, Inc., and rebidding the contract. DONE AND ENTERED this 17th day of November, 1998, in Tallahassee, Leon County, Florida. ROBERT E. MEALE 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 Filed with the Clerk of the Division of Administrative Hearings this 17th day of November, 1998. COPIES FURNISHED: Dr. Earl Lennard Superintendent School Board of Hillsborough County Post Office Box 3408 Tampa, Florida 33601-3408 Robert W. Rasch 129 Live Oak Lane Altamonte Springs, Florida 32714 W. Crosby Few Few & Ayala, P.A. 109 North Brush Street, Suite 202 Tampa, Florida 33602
Findings Of Fact After its initial review of the bids, Respondent determined that Petitioner was the apparent low bidder, with a total bid of $344,971.53. Subsequently, however, it found an inconsistency in one of Petitioner's item prices and recomputed the subtotal which had the effect of increasing Petitioner's bid to $346,851.53. As a result of this recomputation, Intervenor became the apparent low bidder with its bid of $346,371.06. Respondent discovered that Intervenor had also made a similar error in one of its item prices which, had the subtotal been recalculated, would have increased Intervenor's bid by over $12,000. However, Respondent waived the error and allowed Intervenor's bid to stand. Respondent's bid forms specify various quantities of material required. Each quantity listed is followed by three columns which the bidder must complete. The first column is the unit bid in words (e.g. five dollars and no cents). The second column is the unit bid in numbers (e.g. $5.00). The final column, referred to as the "extension" is the total bid on the item in numbers (e.g. 30 units required times $5.00 per unit equals $150.00) Respondent's item number 10275 specified 1,890 construction signs. Petitioner entered one dollar and fifty cents in the unit bid (words) column, followed by $1.50 in the unit bid (numbers) column. Petitioner's extension column entry was $945.00. Respondent determined that 1,890 signs times one dollar and fifty cents each totalled $2,835.00, rather than $945.00, and raised Petitioner's bid accordingly. Respondent's item number 285710367 specified 7,070 square yards of material. Intervenor entered twelve dollars and no cents in the unit bid (words) column followed by $12.00 and $10.25 in the unit bid (numbers) column. A black line was drawn through the number $12.00, but was not initialed. Intervenor's extension column entry was $72,467.50. Here, Respondent determined that the $10.25 unit price should be permitted since 7,070 square yards times $10.25 did, if fact, equal the stated extension price. Using red ink, Respondent drew a second line through the number $12.00, and initialed this change. Respondent also drew lines through the words twelve (dollars) and no (cents), and wrote the words ten (dollars) and twenty-five (cents) and initialed this correction. Respondent's published policy on bid procedures is contained in its Standard Specifications Manual. Section 3-1 provides in part: In the event of any discrepancy in the three entries for the price for any item. the unit price as shown in words shall govern unless the extension and the unit price shown in figures are in agreement with each other, in which case they shall govern over the unit price shown in words. Respondent applied the above procedure to reject Petitioner's extension price on the signs since it did not agree with the unit price in figures or in words. Respondent applied the above procedure to accept Intervenor's extension price on the material since the $10.25 unit price in figures agreed with the extension. Acceptance of the $10.25 unit price figure (rather than the other entry of $12.00) was essential since no attempt had been made to change the twelve dollar unit price in words. Respondent's policy on bid procedures as set forth in its Standards Specification manual requires initialling of all changes made by the bidder. Section 2-5.1 provides in part: In case a change is made in a word or figure after it has been written in ink or typewritten, the bidder shall write his initials by the change. Intervenor failed to initial the change in its unit price figure. However, Respondent did not consider this to be a significant error and accepted the uninitialed change. Respondent's Standards Specifications Manual, Section 3-1, provides in part: Until the actual award of the contract, however, the right will be reserved to reject any or all proposals and to waive technical errors as may be deemed best for the interest of the State. This policy permits Respondent to reject either or both of these bids because of the errors discussed herein. Conversely, Respondent could consider either or both errors to be merely technical errors and waive them. Respondent's testimony and documentary evidence demonstrated that it does not enforce the policy requiring initialling of corrections. Additionally, Respondent's evidence established that it rigorously applies the procedure in Section 3-1 requiring the unit price in words to prevail where there are discrepancies except when the unit price in numbers and the extension agree. Respondent argues that the unit price figure is critical since the State may wish to order more of a given item and would not want to be bound by an erroneously high unit price. However, a stated unit price would not be binding where there is an error. Rather, the presumably correct extension price could be divided by the bid quantity to determine the correct unit price. The primary purpose of the policy which requires agreement of numbers and initialling of corrections is the prevention of conspiracy between bidders and State employees to alter bids. A further policy consideration, which is the stated basis for waiver of technical errors, is the furtherance of State interest. See Section 3-1, quoted above. In this regard, it should be noted that since Petitioner's original bid is the lowest, acceptance thereof would be in the interest of the State.
Recommendation Based on the foregoing, it is RECOMMENDED: That Respondent enter a Final Order rejecting existing bids and reissuing its bid proposal. DONE and ENTERED this 16th day of February, 1984, in Tallahassee, Florida. R. T. CARPENTER 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 16th day of February, 1984. COPIES FURNISHED: Carl R. Pennington, Jr., Esquire 325 John Knox Road, Suite L-101 Tallahassee, Florida 32303 Mark A. Linsky, Esquire Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32301 Ronald W. Brooks, Esquire 863 West Park Avenue Tallahassee, Florida 32301 Paul Pappas, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301 =================================================================
Findings Of Fact Upon consideration of the oral and documentary evidence addressed at the hearing, the following relevant findings of fact are made: The request for sealed bids for the construction of the Project was advertised on October 9, 16 and 23, 1991. There were six addenda to the original bid documents which added, deleted or modified provisions of the original bidding requirements, contract requirements, administrative requirements and technical specifications. The original bid documents plus the six addenda will be referred to herein as the "bid documents". The bid documents required that all bids be in full accord with the contract documents. Sealed bids for the Project were opened on October 30, 1991. Wright submitted the lowest lump sum bid for the Project, with Sovran submitting the second lowest lump sum bid and Kellogg submitting the third lowest lump sum bid. At the time of the bid opening, the bid documents listed only four casework manufacturers that were approved to furnish casework for the Project. Empire Custom Cabinets, Inc. (Empire) was not listed as one of the four approved casework manufacturers in the bid documents. The bid documents did not require the bidder to list the casework manufacturer it intended to obtain the casework from, but only that the bidder name the casework subcontractor. The only work item in the bid documents which requires identifying the name of the manufacturer on the subcontractor's list is the metal roof system. Because Empire's bid on the casework was extremely low compared to other bids received by Wright on the casework, Wright called Empire prior to submitting its bid to confirm that Empire's bid was submitted per plans and specifications. Although Wright did not specifically inquire of Empire at this time as to which manufacturer Empire was obtaining the casework from for the Project, Empire did advise Wright that Empire's bid on the casework was according to plans and specifications. Additionally, Empire did not divulge or advise Wright at this time that the bid was based on Empire manufacturing the casework for the Project. Based on this representation from Empire, Wright listed Empire as its casework subcontractor, and calculated its lump sum bid for the Project using Empire's bid. Although Wright listed Empire as its casework subcontractor in its bid, this did not create an irregularity in Wright's bid since Wright's bid was per plans and specification without exception or exclusion. This would require Wright to furnish casework for the Project manufactured by one of the four approved casework manufacturers listed in the bid documents regardless of which subcontractor Wright listed as the subcontractor for casework. By letter dated November 1, 1991, the Board's architect for the Project requested Wright to have Empire submit written certification by one of the four approved casework manufacturers that its casework was being furnished to Empire for the project. By letter dated November 4, 1991, Empire advised Wright that Empire's bid on the casework for the Project was based on casework to be manufactured by Empire. On the same day, Wright furnished the architect for the Project a copy of Empire's letter of November 4, 1991. In response to a request by the Board, Wright, by letter dated November 7, 1991, advised the Board that Wright would furnish casework manufactured by one of the four approved manufacturers listed in the bid documents for the Project. By letter dated December 3, 1991, Empire advised Wright that Empire would need to withdraw its bid if Empire was required to use casework manufactured by one of the four approved casework manufacturers listed in the bid documents. On that same day, Wright furnished the Board a copy of Empire's letter and requested that the Board allow Wright to remove and replace Empire with Steven Ward and Associates, Inc. (Ward), as the casework subcontractor since Ward would be able to furnish and install casework manufactured by LSI Corporation of America, Inc., one of the four approved casework manufacturers. No Action has been taken on that request. The bid documents provide for a subcontractor to be removed and replaced from the list of subcontractors after the bid is opened if there is a showing of good cause and written approval by the Board and the Project architect is obtained. Although Empire's bid on the casework for the Project submitted to Wright was based on Empire manufacturing the casework, there is competent substantial evidence in the record to establish facts to show that at the time Wright submitted its bid on the Project it had reasonable grounds to believe that Empire's bid on the casework was based on Empire furnishing and installing casework manufactured by one of the four approved casework manufacturers. After determining that Empire could not perform under its bid, Wright obtained a bid from Ward for furnishing and installing the casework for the Project which was less than Ward's original bid submitted to Wright before the bid opening. However, this bid was substantially more than Empire's bid, and if Wright is allowed to substitute Ward for Empire, Wright will have to absorb the additional costs since the bids were lump sum bids. Wright is neither attempting to furnish casework from a manufacturer that is not approved, nor is Wright requesting an increase in the lump sum bid price. The advertisement for Sealed Bids for the Project required that all bidders be prequalified by the Board prior to the bid date. Sovran and one other bidder were not prequalified by the Board prior to the bid date in accordance with Advertisement for Sealed Bids for the Project. Sovran received the bid documents for the Project approximately one month before the bid date but did not file a Notice of Protest of the prequalification requirement contained in the Advertisement for Sealed Bids for the Project. Sovran holds a certificate as a general contractor licensed in the State of Florida in accordance with Chapter 489, Florida Statutes. As a certified general contractor Sovran, pursuant to Section 489.125, Florida Statutes, was authorized to bid on the Project notwithstanding the Board's prequalification requirement. This was explained by the Board's representative at the bid opening. The bid documents required that a subcontractor list be submitted by all bidders, and when submitted with the bid becomes an integral part of the bid. The purpose of the subcontractor list was to prevent bid shopping, and to allow the Board an opportunity to review the subcontractors to determine if any subcontractor on the list had performed unsatisfactorily on previous Board projects. Neither the statutes relating to competitive bidding nor the bid documents prohibit the listing of the general contractor together with a subcontractor on a subcontractor list. The subcontractor list submitted by Sovran indicated "Sovran Constr/Naples" as the name of the subcontractor for the masonry work and "Sovran/Naples" as the name of the subcontractor for the poured-in-place concrete work. "Naples" is Naples Concrete and Masonry Work, Inc. The bid received by Sovran from Naples was for both labor and materials for the poured-in-place concrete and masonry work. Sovran neither requested nor did Naples furnish Sovran a bid to provide labor only for the poured-in-place concrete and masonry work. There was no agreement between Sovran and Naples whereby Sovran would supply the materials and Naples would furnish the labor for the poured-in-place concrete and masonry work. Sovran did request and receive bids from other companies for furnishing materials only for the poured-in-place concrete and masonry work. Sovran listed itself, the general contractor, along with Naples on the subcontractor list for the purpose of supplying the materials for the poured-in- place concrete and masonry work. Sovran's main reason for supplying the materials was that Naples was not bondable. Without a payment bond from Naples, Sovran would be without protection and could be forced into paying double for the materials in the event Naples failed to pay the material suppliers. Although the Superintendent of the Lee County Schools has recommended to the Board that the Board accept Wright's bid for the Project, the Board has not voted on that recommendation. The fact that Wright used Empire's bid to calculate its lump sum bid in no way excuses Wright for the requirement set out in the bid documents that casework used for the Project (when the time comes) be manufactured by one of the four approved casework manufacturers. Wright gains no economic advantage in this regard since the lump sum bid price remains the same. The advertisement for Sealed Bids on the Project provides that the Board reserves the right to waive any and all irregularities of any bid received.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, accordingly RECOMMENDED: That the Board enter a Final Order dismissing the instant bid protest and awarding to Wright the contract for the construction of Elementary School "C", Job No. 91063. DONE and ORDERED this 13th day of February, 1992, in Tallahassee, Florida. WILLIAM R. CAVE 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 13 day of February, 1992. APPENDIX TO RECOMMENDED ORDER IN CASE NUMBER 91-7597B1D The following constitutes my specific rulings pursuant to Section 120.59(2), Florida Statutes, on all of the proposed findings of fact submitted by the parties in this case. Rulings on Proposed Findings of Fact Submitted by the Petitioner Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parenthesis is the Finding(s) of Fact which so adopts the proposed finding(s) of fact: 1 - 3(1,2 and 3 , respectively); 4 - 5(6); 6(4); 7 - 9(5); 12(10); 13(11); 15 - 16(12); 17(13); 18 - 19(16); 20(29); 21(18); 23(19); 24 - 25(20); 26(22); 27(23); 28(22); 29 - 30(29); 32 - 33(25); and 34(26). Proposed finding of fact 10 is rejected as not being supported by competent substantial evidence in the record in that Wright's bid was as per plans and specifications without exceptions or exclusions which included the use of casework manufactured by one of the approved casework manufacturers. Proposed finding of fact 11 is rejected as not being supported by competent, substantial evidence in the record in that the Board knew of Empire's bid being based on nonconforming materials prior to issuing its Notice of Intent. However, the only information the Board had in reference to Wright's bid before issuing its Notice of Intent was that Wright had bid as per plans and specifications and would be installing casework manufactured by one of the approved manufacturers. The only question was whether Empire could furnish casework manufactured by one of the approved manufacturers. Proposed finding of fact 14 is neither material nor relevant. How the Board's architect interpreted Wright's bid is neither material nor relevant to this proceeding. Proposed finding of fact 22 is unnecessary to the conclusion reached in the Recommended Order. Proposed finding of fact 31 is more in the way of an argument than a finding of fact. Proposed findings of fact 35 and 36 are covered in the Preliminary Statement. The timeliness of Kellogg's protest is not an issue and therefore, a finding that it was timely is unnecessary. Rulings on Proposed Findings of Fact Submitted by the Respondent While not specifically adopting proposed finding of fact 1, where material or relevant or necessary to this proceeding, and supported by competent, substantial evidence in the record the stipulated facts have been adopted. Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parenthesis is the Finding(s) of Fact which so adopts the proposed finding(s) of fact: 2(4,5); 3(9); 4 - 5(7); 7 - 8(8); 10(16); 11(14); 12(31); 13(21); and 15(23). Proposed finding of fact 6 is more in the way of an argument than a finding of fact. Proposed finding of fact 9 and 14 are neither material nor relevant. Rulings on Proposed Findings of Fact Submitted by the Intervenor See ruling on Respondent's proposed finding of fact Each of the following proposed findings of fact are adopted in substance as modified in the Recommended Order. The number in parenthesis is the Finding(s) of Fact which so adopts the proposed finding(s) of fact: 2 - 3(21); 4(24); 5 - 6(21); 13(23); 14(24,28); 15(22); 16 - 17(23,24); and 18(28). Proposed findings of fact 7 through 12 are neither material nor relevant to this proceeding. COPIES FURNISHED: David E. Gurley, Esquire Norton, Gurley & Darnell, P.A. 1819 Main Street, Suite 610 Sarasota, FL 34236 Marianne Kantor, Esquire The School Board of Lee County 2055 Central Avenue Fort Myers, FL 33901 James M. Talley, Esquire Fisher, Rushmer, Werrenrath, Keiner, Wack & Dickson, P.A. Post Office Box 712 Orlando, FL 32802 Karl Engel Superintendent Lee County School Board 2055 Central Avenue Ft. Myers, FL 33901 Honorable Betty Castor Commissioner of Education The Capitol Tallahassee, FL 32399-0400
The Issue Whether Petitioner should be granted an equitable adjustment to increase the contract price in the amount of $337,714 for a mistake in bid on project No. BR-7702/8701, Library/Auditorium, Florida International University.
Findings Of Fact In April 1974, Respondent advertised for bids for the construction of a library-auditorium building at Florida International University, Miami, Florida, State Project No. B.R. 7702/8701. Respondent's representative for this project was the architectural firm of Ferendino/Grafton/Spillis/Candela, Coral Gables, Florida. The advertisement for bids specified that sealed bids would be received until 2:00 p.m. on May 16, 1974, at which time they would be publicly opened and read aloud. In fact, the advertised time period was extended until the same hour on May 23, 1974. The advertisement provided that bids must be submitted on the proposal form furnished by the architect/engineer and be accompanied by a bid bond or an equivalent cash amount in a sum not less than five per cent of the amount of the base bid as a guarantee that the bidder would enter into an agreement with the owner if this bid was accepted. It further provided that the bid would remain in force for thirty (30) days after the time of opening. The advertisement also contained the following statement: "The Department of General Services reserves the right to reject any and all bids and to waive informalities in any bid whenever such rejection or waiver is in the interest of the State of Florida." (Exhibit 1a, testimony of Williams) In preparing its bid on the project, Petitioner utilized two company forms. One included columns for the various portions of the work with blocks opposite each portion for the insertion of the names of subcontractors and the amounts of their bids. The other form was a recapitulation of the low subcontractors' bid by the various segments of the contract, and the form also included spaces and amounts for the work to be accomplished by the contractor itself. The normal procedure followed by Petitioner in this and prior projects was to enter subcontractors' bids on the subcontractor's bid tabulation form when received over the telephone and, when all such bids had been received shortly before the deadline for submission of bids by the prime contractors on the project, to enter each low subcontractor bid on the recapitulation form. This would then be totaled to arrive at Petitioner's bid to be submitted to Respondent. (Testimony of Kearns). The subcontractor tabulation form for the instant project listed an item for "PRECAST STRUCTURAL." Opposite this entry in blocks on the form had been printed the names of subcontractors from whom Petitioner expected to receive bids, including Pre-Stressed Systems, Inc. (P.S.I.), Meekins, Stresscon, and Houdaille. However, since there were two different pre-case structural items called for under the specification, i.e., joists under section 3-B and pre-case panels under section 3-C, the words and figures "3B Joists" and "3C panels" were penciled in above and below the printed words "PRE-CAST STRUCTURAL" to show the need for entering bid figures for both items. However, there was no separation of these items in the various blocks for subcontractor's bids. (Exhibits 1b, 1c, Testimony of Kearns) Usually bids of major subcontractors were not received until the morning of the final day for submission of the total bids, and many were not received until immediately prior to the time the bid must be tallied and submitted. On the morning of May 23, 1974, the day for bid opening, Petitioner's employee, Edward A. Kearns, Jr., an estimator, was responsible for preparing Petitioner's bid. The only bid Petitioner had received for precast joists was that submitted by P.S.I. in the base amount of $460,000. This sum was entered on the bid tabulation from in pencil under the printed name P.S.I. Bids for the pre-cast panels were received from two of the subcontractors whose names were printed on the form an the amounts were entered in pencil as follows: "Meekins - 399,800, Stresscon - 400,00." No bid was entered for Houdaille. About 11:00 a.m., a telephonic bid on the panels was received from Cast-Crete Corporation of Kissimmee. This bid was considerably lower than that of Meekins and, because Petitioner had not heard of or dealt with Cast-Crete in the past, it asked all three bidders on the panels to verify the requirements and prices. While awaiting the return of this information, the Cast-Crete bid was not entered on the bid tabulation form. Thereafter, Cast-Crete informed Petitioner that it was raising its bid somewhat and this information was placed on a separate subcontractor bid form for cast-Crete, but not entered on the tabulation form containing all bids. The final Cast-Crete bid was in the amount of $337,714. By this time, Petitioner's office was quite hectic in that other bids were coming in at a fast pace and the phone was ringing continuously. Many bidders sought clarification on items or had to give their bids to Kearns which was time-consuming. As the time for submission by Petitioner to Respondent drew near, Kearns took the low subcontractor bids from the bid tabulation form and transferred them for each category of work to the recapitulation form. On this form, there was a single line for "Precast structural" and, on that line, Kearns entered the bid that had been received from P.S.I. for precast joists, but forgot to include any bid for the precast panes. Since no breakdown for joists and panels was shown on the recapitulation form, he assumed that bids for all portions of the work hand been included. All items on the recapitulation form were added and Petitioner arrived at a total base bid of $3,999,259, which did not include the bid for precast panels in the amount of $337,714. (Testimony of Shafer, Sr., Kearns, Exhibits 1b, 1c, 1f) Petitioner's employee, Ron Shafer, Jr., previously had been sent to the place of bid opening at Florida International University with the formal bid letter with the amounts left blank. Shortly before 2:00 p.m., Petitioner provided him by telephone with the amounts to place on the be bid form and submit to the Respondent's representative. He submitted the formal bid just prior to the deadline. The bids were thereafter opened and, although Ron Shafer, Jr., noted that Petitioner's bid was some $400,000 lower than the next lowest bidder, he was unaware of the circumstances of the mistake and returned to the office. The representative of Respondent had opened the bids and an officer of the architectural firm, Freeman J. Williams, was also present. Nothing was said at the time concerning the large disparity between Petitioner's bid and the other bids, and Williams saw no need to ask Petitioner to verify its bid at that time. (Testimony of Shafer, Jr., Williams, Exhibits 1d, 1v) Meanwhile, after Kearns had tallied the final bid figures and they had been called in to the employee at Florida International University, Petitioner's personnel sat around the office and discussed the job for several minutes. They then started to gather up all the sub-bids to put in a folder when they discovered a "subcontractor's bid form" for Cast-Crete Corporation and realized that it had not been included on the tabulation sheet or on the final recap sheet. Immediate attempts were made to telephone the architect about the mistake. When Williams was reached at his office some thirty minutes after he had left Florida International University, Petitioner requested that its bid be withdrawn after explaining the circumstances. Williams suggested that Petitioner immediately send a telegram to Respondent explaining this situation. Petitioner did so in the following language: "In reviewing our bid, we discovered we had omitted the cost of precast panels manufacturers bid from our tabulation sheet, in the amount of $282,714. We, therefor, regretfully must with- draw our bid on the FIU library and auditorium building. We could, however, accept award of contract if this amount could be added to either of our base bids. Please advise. SHAFER AND MILLER, INC. R C Shafer" In the telegram, an additional mistake was made by using the figure of $282,714 which did not include the erection of the panels in the amount of $55,000 that had been the subject of a separate bid by Cast-Crete. After receipt of the telegram, Respondent's representatives requested that Petitioner come to Tallahassee with their pertinent documents relating to the bid to discuss the matter. They did so and thereafter heard nothing further until June 5, 1974, at which time a letter was received from the Department of General Services, dated May 31, 1974, advising that, subject to final approval by the Governor and the Cabinet, it was propose to recommend acceptance of Petitioner's low bid and award the contract to it in the amount of $4,122,000 for Base Bid 1 and Priority 1 Alternate A, Priority 2, Alternate C, and Priority 3, Alternate D. The meeting of the Cabinet at which the award was to be recommended was stated in the letter to be held on June 4, 1975. Since Petitioner did not receive the letter until June 5, it had no opportunity to be present at the time matter was considered. By separate letter of May 31, 1974, the Department of General Services enclosed four copies of a standard form of agreement and performance and payment bond to be executed and returned. (Testimony of Williams, Shafer, Sr., Kearns, Exhibits 1e, 1g, 1h) Petitioner contacted legal counsel, James E. Glass, on June 5. He checked into the matter and found that the contract had already been awarded on June 4 by the Cabinet. He then telephoned Arnold Greenfield, General Counsel for the Department of General Services, and asked if the state could rebid the job at which time Petitioner would submit its original intended bid. Greenfield stated that the project was critical from a budget standpoint and that the state would not rebid it, and insisted that the Petitioner proceed or else forfeit its bid bond and be subject to suit for any excess costs of performance. Glass reminded Greenfield that Petitioner proceed or else forfeit its bid bond and be subject to suit for any excess costs of performance. Glass reminded Greenfield that Petitioner could seek injunctive relief in the matter, and the latter then stated that if Petitioner would proceed with the contract, Respondent would acknowledge its right to claim a modification of the contract. This conversation was confirmed in a letter from Greenfield to Glass, dated June 7, 1974, wherein it was stated "We further understand that your client may wish to seek a modification of such contract, after execution." Glass, in a return letter dated June 12, returned the executed contracts and bonds, stating that Petitioner was doing so in order to act "equitably and in good faith", and was fully reserving its rights to contest the erroneous bid by judicial action for equitable relief. Thereafter, Petitioner received notice to proceed with the work and in due course satisfactorily completed the contract within the required period. This was evidenced by a certificate of acceptance of the building by the using agency, which was approved by Respondent on December 4, 1975. (Testimony of Glass, Exhibit 1e, 1g, 1h, 1i, 1j, 11, 1m, 1s) In December, 1974, Petitioner had submitted its claim for an equitable adjustment in the amount of $337,714 which was the amount of the omitted Cast- Crete bid. During the ensuing year Petitioner submitted audits of its expenses on the job to Respondent and in January, 1976, further audit information was provided at the request of Respondent. On May 6, 1976, Respondent informed Petitioner that it would not approve any increase in the contract amount. Thereafter, on June 11, Petitioner filed its petition herein seeking an equitable adjustment in the amount of $337,714. The petition was referred to the Division of Administrative Hearings by the Respondent on August 2, 1976, and the undersigned Hearing Officer was assigned to conduct the hearing therein. (Exhibit 1r, 2, 4, 5, 6) By a Motion to Abate, dated August 23, 1976, Respondent requested that the matter be held in abeyance pending the submission of the petition to the project architect and his rendering of a determination indicating whether the relief should be granted or denied, as a "condition precedent to the contractor obtaining consideration of said petition in any proceeding authorized by Chapter 120, Florida Statutes." Respondent stated in its motion that the contract clearly provided that nay and all claims or disputes should be first submitted to the architect for determination, and that thereafter, either party could obtain administrative review of the determination by filing a written appeal to the Department of General Services within thirty days. The motion further stated that since this prerequisite had not been accomplished, there was no basis for an administrative appeal at that time. On the same date, Respondent advised the architect of the situation and requested expeditious consideration of the matter. On August 27, the architect issued its determination stating "From our personal knowledge of the events during the bid opening process, and the subsequent events that led to the awarding of the bid, we concur in the contractor's request." In November 1976, Respondent's general counsel advised the Hearing Officer that settlement efforts were in progress but requested that the matter be scheduled for hearing nevertheless. Notice of hearing was issued on December 15, 1976, and the case was heard on January 27, 1977. (Exhibits 1t, 1u, Pleadings) Petitioner's intended total bid, including alternates, amounted to $4,459,714. A change order of $194 was issued during the course of the work, amounting to a total of $4,459,908. Petitioner's direct costs on the project were $4,094,890. Overhead was computed at 2.85 per cent of direct costs in the amount of $116,705, for a total cost of $4,211,595. Overhead was computed based on the ratio of total general and administrative expense to total direct costs incurred on all of Petitioner's jobs in process for the year ending May 31, 1975. However, the audit reports included payment in the amount of $335,634 to Cast-Crete Corporation. The actual amount paid to that firm was $325,234 - difference of $10,400, making Petitioner's actual costs $4,201,195. During the course of the contract, Respondent paid Petitioner $4,122,194, resulting in a net loss to Petitioner of $79,001. An anticipated profit for performance of the contract was computed on the basis of the average profit on other jobs of 4.4 per cent, amounting to the sum of $180,377. The latter two sums total $259,378, and it is found that figure is the reasonable amount of Petitioner's claim. (Exhibits 2-5)
Recommendation That Petitioner's claim for equitable adjustment under Project No. BR- 7702/8701 be granted and that a change order be issued increasing the contract price by $259,378.00. DONE and ENTERED this 21st day of March, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Hearing Officer Division of Administrative Hearings Room 530 Carlton Building Tallahassee, Florida 32304 (904) 388-9675 COPIES FURNISHED: Donna H. Stinson and Daniel S. Dearing, Esquires Post Office Box 1118 Tallahassee, Florida 32302 James E. Glass, Esquire 2600 First Federal Building 1 Southeast 3rd Avenue Miami, Florida 33131 John A. Barley, Esquire General Counsel Department of General Services Room 110 Larson Building Tallahassee, Florida 32301
The Issue Whether the Department of Health and Services acted fraudulently, arbitrarily, capriciously, illegally or dishonestly in issuing an award of bid or HRS Lease No. 590:2069 to Harpaul S. Ohri.
Findings Of Fact Sometime before March, 1989, the Department of Health and Rehabilitative Services (HRS) requested and received approval from the Department of General Services (DGS) for additional office space to provide social services in the western portion of Orlando, Orange County, Florida, including a food stamp distribution office. HRS was authorized to procure, through competitive bidding, a lease for 17,250 net rentable square feet of existing office space, plus or minus 3 percent. The said lease was to provide for a full service period of seven years and two options to renew for three years each at specified rates, with occupancy no later than December 1, 1989 or 175 days after the bid award is finalized. The geographic area designated in the bid package for the office space was limited to the following area of Orange County, Florida: Beginning at the intersection of Colonial Drive and Kirkman Road to the intersection of L.B. McLeod Road, then east on L.B. McLeod Road to the, intersection of Rio Grande Avenue then north on Rio Grande Avenue to the, intersection of Colombia Street,, then east on Colombia Street to Interstate 4, then north on Interstate 4 to the intersection of Colonial Drive, then west on Colonial Drive to the point of Beginning. Public notice that HRS was seeking competitive bids was given and HRS prepared a document entitled Invitation to Bid for Existing Office Space (ITB), which set forth in detail all of HRS requirements. The purpose of the ITB was to inform all potential bidders of the minimum requirements for submitting a responsive bid, and the specific criteria by which the bids would be evaluated. Specific areas of importance to Respondent as reflected in the ITB and addressed by the evidence herein were as follows: 17,250 net rentable square feet (plus or minus 3 percent) of existing office space. General office use for use, as a client service center. Seven year term with two options to renew of three years each. 120 off-street, on-site, full size parking spots designated exclusively for use of Department employees and clients, suitably paved and lined, with a minimum of two for the handicapped. Availability of public transportation within reasonable proximity. Availability to adequate dining facilities within two miles. Photographs of the exterior front of the facility, along with documentation of present facility configuration and parking areas including access and egress to public roadways. Availability of elevator for multi-story use. i). Space requirement criteria: Minimum telephone requirements. Back-up interior emergency lighting. Three separate sets of rest rooms, male and female, one meeting the needs of the handicapped General security requirements. Specific security requirements for food stamp distribution center. Window covering over exterior widows to allow both sunlight and energy control; if bidded space without existing windows, then all rooms comprising the exterior of the building would require windows measuring approximately 24 x 36, all secured and inoperable. Full Service including all utilities and janitorial. The evaluation factors and their relative weights were stated in the ITB as follows: Evaluation Criteria The successful bid will be that one determined to be the lowest and best. All bids will be evaluated on the award factors enumerated below: Associated Fiscal Costs Rental rates for basic term of lease Evaluated using present value methodology by application of the present value discount rate of 8.69 percent. (Weighting: 25) Rental rates for optional renewal of terms of lease. Rates proposed are within projected budgeting restraints of the department. (Weighting: 10) Associated moving costs, i.e., furniture, equipment, telephone systems, etc,. (Weighting: 5) Location Proximity of offered space in central or preferred area of map boundaries. (Weighting: 10) Frequency and availability of satisfactory public transportation within proximity of the offered space. (Weighting: 10) The effect of environmental factors, including the physical characteristics of the building and the area surrounding it, on the efficient and economical conduct of the departmental operations planned for the requested space. (Weighting: 10) Facility Susceptibility of design of the space offered to efficient layout and good utilization. (Weighting 15) Provision of the aggregate square footage in a single building. Proposals will be con- sidered, but fewer points given, which offer the aggregate square footage in not more than two locations provided the facilities are immediately adjacent to or within 100 yards of each other. (Weighting: 10) TOTAL POSSIBLE 100 percent The bid package contained various bid specifications, bid evaluation criteria and the numerical weight assigned to each of those criteria. Sealed bids were submitted by three bidders, Petitioner, Harpaul S. Ohri and Kensington Gardens Builders Corp. The bids were opened on April 25, 1989, and Ernie Wilson, HRS District 7 Facilities Services Manager, determined that all three bids were responsive, and within the mandatory geographical area designated in the bid package. The District Administrator appointed a bid evaluation committee to review and grade, the responsive bids under the criteria established in the bid package, and to recommend to him the committees choice of the lowest and best bid. Four individuals who were familiar with the type of work to be done in the proposed space and familiar with the bid process were appointed to the Committee. On or about May 1, 1990 the bid evaluation committee determined that the bid of Harpaul S. Ohri was the "lowest and best bid" and submitted its determination, in writing, to the District Administrator who, subsequently approved the selection. On or about June 26, 1989, on behalf of the Department, Ernie Wilson, Facilities Services Manager, notified the bidders of the Departments intent to award the bid to Harpaul S. Ohri, as being in the best interest of the Department. The bid evaluation committee consisted of four representatives of the Department who visited two of the three bidders sites and questioned the bidders representatives. The members of the committee were familiar with the Petitioners site from previous experience. They choose not to make an on-site visit prior to completing the bid evaluation sheet, although instructed to do so on the Evaluation Committee Duties and Responsibilities/Real Property, Leasing instruction sheet. Each committee member completed an evaluation sheet and gave a higher total score to Mr. Ohri. The three major bid evaluation criteria were Fiscal Cost, Location and Facility. Under the Fiscal Cost criterion were three sub-categories: Rental Rates, Renewal Rates, and Moving Costs. For Rental Rates, Petitioner received an average of 22.7 points out of 30 possible,, while Ohri received 21.7, and Kensington Gardens received 23.7 points. The points were individually assessed by the evaluation committee, after the rental rates were compared by Ernie Wilson based on the present value analysis of bidders proposed rates. For Renewal Rates, each of the bidders, including Petitioner, received 5 points out of 10 possible. The present value analysis was not applied, as was noted in the ITB. However, even a cursory examination of the renewal rates submitted by the bidders shows that there is a 15 percent to 33 percent yearly differential in the rates, with the Petitioners rates as the lowest and Kensington Gardens as the highest. Although the committee assigned all three bidders an equal rating, the renewal rates submitted by the bidders were not equal should the Department wish to exercise its options, the rates submitted by Petitioner were substantially lower than the other two bidders and would result in a cost savings to the Department of several hundred thousand of dollars. The award factor points should not have been awarded equally. For Moving Costs, Petitioner received 5 points on each of the committee members sheets, while Ohri received 4 points and Kensington Gardens received, an average of 3.7 points. The maximum points possible was 5 points. Petitioner was awarded the maximum points because HRS is presently in the same building and no moving costs would be experienced. The other two bidders were awarded 4 points each by committee members. That determination was based on each members personal experiences. No cost or time lost data was provided or requested. The LOCATION criterion also had three sub-categories: Proximity to other governmental agencies - 10 points - with all three bidders receiving the same rating; Public Transportation -10 points - with all three ,bidders, receiving the same rating; and Environmental Factors - 10 points - out of which Petitioner received an average of 5.7 points; Ohri - 9.7 points and Kensington Gardens - 6.5 points. In considering the proximity to other governmental agencies of each of the facilities being considered, the committee relied on their own knowledge of the area. They determined that since each was within the geographical area designated in the ITB, each was equally distant from the most frequently visited government agencies in the vicinity. However, Petitioners facility is the most centrally located of the three facilities offered, while the two other facilities were considerably distant from other government agencies. The award factor points should not have been awarded equally. For Public Transportation, the committee determined that local bus service went near each of the three facilities. They were neither provided, nor did they request, route maps, schedules or passenger capacity for buses servicing each facility. Petitioners facility is centralized in the area served within the bid district, and serviced by, numerous bus lines which pass near the facility ten times per hour. The bus service to the other two facilities are limited to four buses per hour, with buses having a smaller capacity. In addition, most clients would be required to travel to the central bus terminal and transfer to a different route in order, to reach the Ohri or Kensington Gardens facilities, making bus transportation a very time-consuming process. No other form of transportation is available, except for taxi service. In addition, in order for a client to walk from the nearest bus stop to the Ohri facility, a person would cross two heavily traveled six lane streets and then walk across an open shopping center parking lot. This would require approximately a fifteen minute walk. In order to reach Petitioners facility, a client would require approximately a five minute walk utilizing public sidewalks. The committee did not consider these facts in its evaluation. The award factor points should not have been awarded equally. (c)(1). For Environmental Factors, the committee considered each buildings physical characteristics and the surrounding area. The committee, in their letter to the District Administrator, dated May 1, 1989, identified this category as "a very critical area for the new lease." The letter also stated: "The committee took the following into account when evaluating this section: Cleanliness of the building aid surrounding areas. Lack of traffic congestion by motorized vehicles close to the facility. Easiness of getting to and from the facility by vehicle. Safety for clients and staff walking to and from the facility. Upkeep of the surrounding buildings or other sections of the bidders building." The following was also taken into account when evaluating this section, but was not so stated in the letter. At least one committee member believed the lack of window space in Petitioners facility was disabling to his bid, and that the willingness of the Ohri representative to install windows on exterior walls was a significant factor in her determination of award. At least one committee member indicated that future expansion was a substantial factor in her favoring the Ohri bid, and that there was janitorial and security problems at Petitioners facility. The committee received no other information other than the committee members opinion regarding the same. The committee as a whole erroneously believed that the extra square footage visible at the Ohri facility at the time of their inspection would necessarily be available to HRS if and when it might expand its offices. Future expansion was specifically removed from the ITB at the pre-bid conference and it was clearly erroneous for them to have included this factor in their bid evaluation. The ITB specifically calls for the installation of exterior windows by the winning bid prior to occupancy. However, none of the committee members reviewed the ITB or the actual bids submitted. They relied primarily on the synopsis of the bids prepared by Ernie Wilson. The ITB states substantial general and specific security requirements in detail; however, the evaluation criteria forms do not provide a category for evaluating security other than generally under the sub-category of environmental factors. The ITB, under General Specifications and Requirements, called for the availability of adequate dining facilities within two miles of the proposed facility. The evaluation criteria did not provide a category for the committee to rate dining facility availability. In consideration of the environmental factors, the committee overlooked or failed to consider a hazardous unfenced high voltage transmission station adjacent to the Ohri facility. In addition, the photographs submitted by Ohri as the front of the building (as required by the ITB) are in fact the rear of the building which was not offered as part of the proposed leased facility. Of the three sub-categories under FACILITY, out of 15 possible points, Petitioner received an average rating of 9.5, Ohri received an average of 13.7 and Kensington Gardens received 11.2 for Layout/Utilization. Ohri received the most points because his building configuration was a, shell and was more flexible and could be reconfigured for more efficient layout to suit the Departments needs. All three bidders submitted proposals wherein the total square footage of rentable space was to be contained in a Single Building. Therefore, all three bidders received the maximum 10 points. A maximum 5 points was provided for facilities with Street-level space. All three bidders were awarded the maximum 5 points. However, a portion of Petitioners space was offered on the second floor, a fact which the committee overlooked. The Petitioner should not have received the full 5 points for having street-level space. The unanimous recommendation of the evaluation was to award the lease to Ohri. In reaching that conclusion, the committee did not properly utilize the weighted bid criteria and, in addition, included improper bid considerations in their evaluation of the three facilities. Some of the reasons given by the committee for distinguishing and preferring one bid over another were rational and reasonable considerations and were covered by the bid evaluation criteria. However, others were erroneous and improper.
Recommendation Based on the foregoing findings of fact and conclusions of law, the Hearing Officer recommends that the Secretary of the Department of Health and Rehabilitative Services enter a Final Order rejecting all bids for lease number 590:2069 and issue a new invitation to bid. DONE AND ENTERED this 12th day of February, 1990, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 12th day of February, 1990. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on findings of fact submitted by the parties. Proposed Findings of Fact submitted by the Petitioner: Accepted: paragraphs 1, 2, 3, 5, 6, 7, 9 (in substance, except for subparagraphs f, g, j and k which are not relevant), 10 (in substance), 12(a), (b), (f-in substance), (g-in substance), (h-in substance), (j), (k-in substance), (l-in substance), (p-in substance). Rejected: Not relevant: paragraphs 4, 12(c), (d), (e), (m), (n), (o), (p- the proposed future location of the Greyhound Station; insure wooded area nearby), (q), (r). Argument: paragraphs 11 and 13. Procedural matters, covered in the preliminary statement: paragraphs 8 and 14. Respondent did not submit proposed findings of fact. COPIES FURNISHED: Terrence W. Ackert, Esquire 201 East Pine Street Suite 1402 Orlando, Florida James Sawyer, Jr., Esquire District 7 Legal Counsel Department of Health and Rehabilitative Services 400 West Robinson Street Orlando, Florida Sam Power Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John Miller General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
