Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: Background In September 1992, respondent, Jacksonville Transportation Authority (JTA), issued Invitation to Bid No. CF-0310-92 (ITB) inviting contractors who held certificates of prequalification to bid on Department of Transportation (DOT) projects to submit proposals for performing construction work on 1.6 miles of State Road 9A in Duval County, Florida. The contract to be awarded was the third contract of three contiguous construction projects on State Road 9A and was commonly known as contract 3. It was to be completed within twenty-four months. Essentially, the work involves the widening of that road from two to four lanes, and adding connector ramps, a median, and other associated improvements. The project is more specifically identified as project number 72002-3533. The ITB called for sealed bids to be filed no later than 2:00 p.m. on September 23, 1992, with an award of the contract to be made to the lowest responsive bidder at JTA's meeting on September 29, 1992. The ITB provided further that "the right is reserved (by JTA) to reject any and all bids." A total of six contracting firms filed bids in response to the solicitation. They included petitioner, Hubbard Construction Company (Hubbard), and intervenor, Petticoat Contracting, Inc. (PCI), both of whom were prequalified. Hubbard is a large construction firm headquartered in Orlando, Florida, and has been in the construction business for some seventy years. In 1992 alone, it bid on more than 300 jobs and did approximately $180 million in business. Conversely, PCI is a much smaller firm headquartered in Jacksonville, Florida, with approximately forty-five employees. It has been in business for almost seven years and is minority (female) owned and operated. Hubbard was the lowest dollar bidder with a bid in the amount of $6,257,722.38, while PCI was the second lowest bidder with a bid in the amount of $6,270,121.43, or approximately $12,400.00 higher than Hubbard. After the bids were opened, they were evaluated by JTA's engineering consultant, Sverdrup Corporation, a Jacksonville engineering firm. Concluding that Hubbard's bid was "unbalanced" in several material respects and thus was irregular, the consultant recommended that the contract be awarded to PCI, the second lowest bidder. This recommendation was concurred in by JTA's staff and was presented to JTA at a meeting held on September 29, 1992. After a discussion regarding the bid proposals, including consideration of comments from Hubbard and PCI representatives, JTA voted to award the contract to PCI. Hubbard then timely filed its protest. In its protest, Hubbard generally contended that JTA had erroneously determined that Hubbard's bid was unbalanced, and by doing so, JTA had imposed upon Hubbard a bid requirement not encompassed within the ITB. It also contended that under the standard used by JTA, all other proposals, including that of PCI, were unbalanced. Finally, the protest argued that PCI was not actually a disadvantaged business enterprise and thus should have been required to furnish documentation concerning its compliance with minority subcontractor requirements. As to this latter contention, no proof was submitted at hearing, and thus no discussion of that allegation is required. The ITB Requirements JTA has its own set of specifications that were distributed to each of the bidders on the project. Among other things, the ITB provided that "(a)ll work is to be done in accordance with the Plans and Special Provisions, and the Standard Specifications of the State of Florida Department of Transportation." The latter reference was to the 1991 edition of the Standard Specifications for Road and Bridge Construction used by DOT. Those specifications are included in the ITB because JTA must build its roads and bridges to state road specifications. In this regard, article 2-6 of those specifications provided in relevant part as follows: A proposal will be subject to being considered irregular and may be rejected if . . . it shows irregularities of any kind; also the unit prices are obviously unbalanced, either in excess of or below the reasonable cost analysis values. The ITB also contained an Appendix A which included supplemental specifications to accompany the DOT document. However, it did not modify article 2-6. The ITB further contained a section entitled Special Provisions which represented "modifications and additions to the corresponding Articles" in DOT's Standard Specifications and the supplemental specifications set forth in Appendix A. Again, article 2-6 was not changed but section 4-1 of the Special Provisions, which constitutes an addition to DOT's specifications, provided that all items which are constructed or installed will be paid for at the unit price bid regardless of the total quantity utilized. Unit prices shall represent the actual costs and profit earned for labor, equipment and materials used in completing the unit of work bid. Therefore, the DOT standard specifications, and specifically article 2-6, were controlling on this contract. In construing the foregoing provisions, JTA considers a bid item to be "irregular" when it is far higher or lower than the engineer's estimate and the average of the other bids. When an irregularity is discovered in a bid, a decision is then made as to whether the irregularity is material or significant in terms of its affect on the competitive process and ensuring that no bidder receives a substantial advantage over other bidders. The potential effect of any irregularity on JTA's interest is also considered in deciding whether the irregularity is material such that the bid should be rejected pursuant to article 2-6 of the specifications. In conjunction with the above analysis, JTA compares the other contractors' bids with the engineer's estimate, and if they are closely approximated, it deems the estimate to be accurate. Conversely, where the average bids and the estimate are not close, JTA concludes that the estimate may be erroneous. It is noted that the consultant relies on the DOT specifications and DOT's historic pricing methods when preparing his estimates. The ITB called for each bidder to submit a unit price for each component of work required under the contract. This required each bidder to estimate the cost for providing services for more than one hundred sixty items, including item 110-1-1 (clearing and grubbing), item 102-2 (topsoil), and item 715-91-120 (high-mast lighting poles), which items are of particular concern in this controversy. The amount of the bid upon which award of the contract was to be based equaled the sum of the prices for the listed items. Item 110-1-1 is a lump sum item, rather than work on a per unit basis, and required the contractor to clear and grub 79.489 acres of land. This work is done at the outset of the project and is generally completed within the first ninety days of the job. Item 102-2 involved the placement of 120,041 square yards of topsoil on the embankments which was to serve as a layer for seeding the grass. However, the parties agree that the contractor had the choice of using either topsoil or a muck blanket extracted from the job site through excavation. If the latter option was chosen, this would eliminate the need to procure topsoil from off-site. Even so, to avoid the possibility of a change order by the contractor, which had occurred on several earlier projects, JTA expected the contractor to estimate his actual cost for topsoil as if the topsoil was to be obtained from off-site. The final disputed item required the contractor to furnish and install fifteen 120-foot street lighting poles. Bidders were required to give a price for a single pole and then multiply that price times the estimated quantity that would be required. This work is generally completed during the last phase of the job. The Submissions As noted earlier, six contractors filed bids in response to the ITB with prices ranging from a low of $6,257,722.38 by Hubbard to a high of $6,997,656.41 by the highest bidder. Hubbard proposed to complete the job in thirteen months even though the ITB allowed twenty-four months while PCI intended to use the full amount of time. As to the three items in dispute, the record reflects the engineer's estimated cost, Hubbard's cost, PCI's cost and the average cost for all bidders excluding Hubbard were as follows: Item Estimated Cost Hubbard PCI Average costs 110-1-1 $150,000.00 $545,000.00 $176,600.00 $147,100.14 102-2 33,011.28 1,200.41 82,828.29 71,064.27 715-91-120 180,000.00 25,500.00 204,750.00 199,701.54 In preparing its bid, Hubbard assumed that the DOT standard specifications would be interpreted and supplied in conformity with DOT's historical interpretation. Therefore, Hubbard prepared its bid in the same manner as it always had, including prior JTA submissions, and this resulted in the above deviations from estimated and average costs for the following reasons. Hubbard obtained a copy of the plans and specifications approximately two weeks before the date for filing its bid and then assigned a team of estimators to prepare the numbers in the bid package. Because several items are subcontracted out, including grassing, striping and electrical work, Hubbard had to wait until the subcontractors returned their prices before it knew the actual cost of those services. As is true in almost every case, the subcontractors did not furnish their prices until the final day or hour. Hubbard was reluctant to leave those items blank until the last moment fearing it would be difficult for the persons filing the bid in Jacksonville to complete the lengthy proposal before the deadline, and an error might be made by them in their haste to change the prices on multiple items for which they received price quotations in the last hour. Accordingly, in filling out the items on which subcontractors would be used, Hubbard used its best estimate of the subcontractor prices based upon its prior experience on other jobs. However, to allow for variances that might occur between the actual subcontractor prices and the estimated prices, Hubbard left blank one lump sum item so that this item's estimated cost could be adjusted up or down at the last moment depending on the other variances. In this way, the total amount of the bid would not change. As it turned out, there were variances in twenty to thirty items which were based on subcontractor prices, with one item (high mast lighting poles) coming in substantially higher than originally estimated. As noted above, Hubbard did not change the estimated subcontractor prices but rather calculated the difference between its estimate and the actual subcontractor prices and added that number to the lump sum price for clearing and grubbing. This resulted in increasing the cost for clearing and grubbing from an actual cost of around $150,000.00 to $545,000.00 while the estimated cost for fifteen high mast lighting poles ($25,500.00) was substantially below its actual cost of more than $170,000.00. According to Hubbard, it follows this practice on virtually every bid document it prepares, including those filed with JTA, and has never had one rejected on the ground certain items were materially unbalanced. Testimony that these preparation procedures are standard in the industry and enable contractors to give the public the best possible prices by allowing for last minute changes while protecting against error was not contradicted. In preparing its topsoil estimate, Hubbard determined that the anticipated muck and subsoil excavation would eliminate the need to procure topsoil from off-site. Therefore, it proposed a cost of only one cent per square yard for adding topsoil to the embankment on the theory that no topsoil would be procured from off-site. Because Hubbard's computer would not take a zero cost, and the cost was already included in the embankment charges, Hubbard put the next lowest price, or one cent, as the cost for topsoil. The final relevant item, high mast lighting, was to be subcontracted out to a specialty contractor. Hubbard originally estimated a cost of $1,700.00 per pole for fifteen poles, or a total cost of $25,500.00. At hearing, Hubbard conceded that this estimated cost was either a mistake on the part of the person filling out the proposal or "a mistake of judgment" by an estimator, and that its actual costs were substantially higher. However, it felt that there was no disadvantage to JTA by preparing its bid in that manner. In its proposal, PCI used a cost of $176,000 for clearing and grubbing, 69 per square yard, or a total cost of $82,828.29, for topsoil, and $13,650 for each high mast lighting pole, or a total cost of $204,750.00. These estimates did not substantially deviate from the bidders' average or the engineer's estimated costs. As to the topsoil item, PCI also intended to use muck excavated from the job site in lieu of topsoil. However, it was not sure that the amount of muck excavated would be adequate, and thus it estimated the amount of topsoil that would be required if the soil was obtained off-site, added a component for overhead and profit, and arrived at a total cost of 69 per square yard. Finally, PCI's estimated cost for pile splices, mobilization, maintenance of traffic and prestressed concrete beams were unbalanced to some degree and constituted a violation of section 4-1. However, these variances were relatively minor in nature and were not material. The Evaluation Process JTA utilized the services of an outside engineering firm to serve as consultant on the project. Immediately after the bids were opened, the consultant's duties were to verify that certain basic requirements were met and that the contractor had the capacity to perform the work. He was also required to prepare a bid tabulation listing the contractors' estimates with the engineer's estimate and to determine if any irregularities were present. A recommendation would then be submitted to the JTA staff regarding the award of the contract. The staff was also required to review the bids and to make a recommendation to the JTA. During the course of his evaluation of Hubbard's bid, the consultant noted a marked variance between estimated costs for clearing and grubbing of $150,000.00 and Hubbard's price of $545,000.00, particularly since the average cost of all other bidders was $147,100.14. He next noted the proposed cost for high mast lighting poles ($25,500.00) and found it to be "extremely low" in relation to the engineer's estimated price ($180,000) and the average cost of almost $200,000.00 submitted by the other bidders. In addition, he found the engineer's estimated cost for topsoil of $33,011.28 to be much higher than Hubbard's proposed cost of $1,200.41, especially since the other bidders averaged $71,064.27. Finally, the consultant conducted a similar review of PCI's proposal, and while he found some irregularities in its bid, he did not consider them material. Thereafter, in a letter to JTA's executive director on September 28, 1992, the consultant noted that: Upon examination of the bids, it became evident that some of Hubbard Construction Company's unit prices are unbalanced. Item No. 110-1-1, Clearing and Grubbing, is a lump sum item and is one of the first pieces of work to be performed in this project. Hubbards' bid amount is $545,000.00. The engineer's estimate is $150,000.00 and the average of all other bidders is $147,000.14. Item no. 715-91-120, High Mast Lighting Pole Complete (Furnish and Install)(120'), also appears to be unbalanced. This work would be performed near the end of the contract. Hubbard's bid amount is $25,500.00. The engineer's estimate is $180,000.00 and the average of the other bidders is $199,701.54. Hubbard's bid amount will not cover the cost of the materials required of this item based on reasonable expected costs. Both of the items are in contradiction to Section 4, Article 4-1 which states "Unit prices shall represent the actual costs and profit earned for labor, equipment and materials used in completing the unit of work bid." Item 102-2, Topsoil, shows an inconsistency. Hubbard's bid amount is $1,200.41. The engineer's estimate is $33,011.28 and the average of the other bidders is $71,064.27. Based on the results of the bid review noted above, it is recommended that Hubbard Construction Company's bid proposal be considered irregular as per Article 2-6 of the Standard Specifications, and therefore rejected. A similar evaluation process was subsequently conducted by the JTA staff, and it reached the same conclusion as the consultant. Its recommendation to reject the bid of Hubbard on the ground the bid was "irregular as per Article 2-6 of the JTA Standard Specifications" and to award the contract to the second lowest bidder, PCI, was conveyed by memorandum to the JTA Highway Committee on September 29, 1992, and was approved by JTA the same date. Was the Agency's Action Arbitrary? JTA's conclusion that Hubbard's bid was materially unbalanced and irregular and thus violated article 2-6 was based on two principal concerns. First, JTA considered the adding of nearly $400,000.00 in costs to clearing and grubbing to be "front-end loading" and thus improper. This means the bid was structured so that a large amount of money, not commensurate with the amount of work actually performed, would be paid at the beginning of the project. In this case, clearing and grubbing would be completed within the first ninety days of the project yet Hubbard would receive almost $400,000.00 in excess of its actual costs to perform that work. JTA believed that this would reduce its control over the performance of the contract, it would be unfair to other bidders on the project, the money would be used to finance other portions of the work, and the possibility existed that Hubbard might not complete performance on the job after being paid the up-front money. Second, and based on what it says has happened on other jobs, JTA feared that by allowing Hubbard to underprice its topsoil item, Hubbard could conceivably request a change order increase of more than $100,000.00. This amount was calculated on the theory that Hubbard might have a $60,000.00 overrun on muck (120,000 cubic yards x 50 ) because it was using the muck to meet the topsoil requirement, and a $1,200.00 underrun on topsoil (which represents the amount bid) because no topsoil would be used, or a net overrun of $58,800.00. At the same time, JTA feared that an overrun on muck would lead to an overrun on subsoil excavation. At a price of $5.00 per cubic yard for any overruns on this item, JTA would be forced to spend as much as $53,000.00 more on a change order for this item. Assuming this actually occurred, PCI would then be the low bidder by almost $88,000.00. Initially, JTA's concerns must be tempered by the fact that on the previous contract for State Road 9A, known as contract 2, Hubbard structured its bid in the same manner as on contract 3. On that contract, its bid was almost three times the engineer's estimate for clearing and grubbing and exceeded the engineer's estimate for mobilization by more than four fold. Even so, Hubbard was more than $200,000.00 lower than the second low bidder and was $400,000.00 lower than the engineer's estimate. On that project, JTA awarded the contract to Hubbard and did not raise the contention, as it did here, that the bid was materially unbalanced. At hearing, the consultant was unable to give a satisfactory explanation as to why the prior bid was "regular" but the instant bid was "irregular" even though both bids had been prepared in the same manner and contained "obviously unbalanced items." In this case, JTA did not give bidders any notice that it intended to construe article 2-6 any differently than it had on prior contracts. In addition, in preparing its bid, Hubbard assumed that article 2-6 would be interpreted in the same manner as did DOT since the ITB provided that the DOT specifications would apply. Moreover, there was nothing in the ITB Special Provisions which gave notice that JTA intended to place a different interpretation on article 2-6 than was customarily done by DOT. According to uncontradicted testimony, DOT has consistently interpreted article 2-6 in the following manner. DOT does not find balancing in and of itself to be a sufficient basis to reject a bid as being irregular under article 2-6. Indeed, virtually every bid submitted for any highway construction project, including those of PCI and Hubbard here, are unbalanced in some respect. If DOT has serious concerns about an unbalanced bid, the terms of article 2-6 require that a study be made to see if the unit prices are "either in excess of or below the reasonable cost analysis values." To do this, DOT performs a study of the time value of money related to the major components of work in a contract on an item by item intra-bid basis, compares the results of that analysis to an irrevocable schedule of construction, and then determines whether the taxpayers would be detrimentally affected by awarding the contract to a bidder with the unbalanced items. In other words, a contractor is paid as units of work are completed, and to the extent major items of work are unbalanced so that payments are deferred or accelerated, the cash flow of the agency may be adversely affected. Without a time value of money analysis, a determination cannot be made as to whether the taxpayers are detrimentally affected by an unbalanced bid. Indeed, out of several thousand bids over a twelve year study period (1975-1987), DOT rejected no more than six because of unbalancing, and then only after such an analysis was performed. As to Hubbard's bid, a former DOT secretary expressed the view that Hubbard's bid did not even rise to the level necessary to invoke the analysis. In any event, by failing to follow its own specifications and performing such a study, JTA could not fairly conclude that the awarding of a contract to PCI would positively impact its net present value of money. This is especially true here since Hubbard proposed to complete the project in thirteen months and PCI in twenty-four months, and neither party submitted a construction schedule with its bid. Therefore, JTA had no basis to conclude that article 2-6 had been violated. Finally, there was no evidence to support the contention that JTA would lose control of the project if Hubbard was paid the excess monies for clearing and grubbing. JTA's concern that Hubbard might fail to complete the job if it received a large payment up front is also without merit. While front end loading is a legitimate concern where a contractor might not finish the project, the facts dispel that concern here. Besides having to post a performance bond, Hubbard would also be disqualified from bidding on other jobs in the event a project was abandoned. Given Hubbard's size and reputation, and the fact that the contract itself provides for JTA retaining a percentage of the payment of work until all work is completed, it is found this concern is not legitimate. As to the concern over topsoil, there was insufficient evidence to establish that muck was more likely to overrun than any other item. Indeed, JTA acknowledged at hearing that the engineer's estimate for muck excavation was as accurate as it could be and no analysis or testing had been performed which would support a change in position. In addition, a JTA board member testified that the topsoil pricing was not considered the primary basis for rejection of Hubbard's bid. Finally, the use of a one cent price for topsoil did not affect the overall price of the bid or give Hubbard an advantage or benefit not enjoyed by others.
Recommendation Based upon the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered by respondent awarding the contract for project no. 72002-3533 to Hubbard Construction Company. DONE AND ENTERED this 28th day of January, 1993, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 28th day of January, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 92-6302BID Petitioner: 1-3. Partially accepted in finding of fact 1. Partially accepted in finding of fact 3. Partially accepted in findings of fact 4 and 7. Partially accepted in finding of fact 3. 7-12. Partially accepted in finding of fact 10. Partially accepted in findings of fact 10 and 12. Partially accepted in findings of fact 8 and 12. Partially accepted in findings of fact 10 and 12. 16-19. Partially accepted in finding of fact 10. 20-22. Partially accepted in finding of fact 15. 23. Accepted in finding of fact 4. 24. Partially accepted in finding of fact 19. 25. Partially accepted in finding of fact 10. 26. Partially accepted in finding of fact 6. 27-29. Partially accepted in finding of fact 19. 30. Partially accepted in finding of fact 18. 31. Partially accepted in finding of fact 17. 32. Partially accepted in finding of fact 19. 33. Rejected as being unnecessary. 34-35. Partially accepted in finding of fact 19. 36-38. Partially accepted in finding of fact 20. 39-40. Partially accepted in finding of fact 21. 41. Rejected as being unnecessary. 42. Partially accepted in finding of fact 13. 43. Rejected as being unnecessary. 44. Partially accepted in finding of fact 19. 45. Rejected as being unnecessary. Respondent: Partially accepted in findings of fact 2 and 3. Partially accepted in findings of fact 4 and 5. Partially accepted in finding of fact 14. Partially accepted in finding of fact 6. Partially accepted in findings of fact 15 and 17. 6-8. Partially accepted in finding of fact 17. Rejected as being unnecessary. Partially accepted in finding of fact 15. Partially accepted in findings of fact 13 and 16. Partially accepted in finding of fact 3. Rejected as being unnecessary. Intervenor: Partially accepted in finding of fact 1. Partially accepted in finding of fact 3. Partially accepted in findings of fact 4 and 5. Partially accepted in finding of fact 14. 5-10. Partially accepted in finding of factg 15. 10A-C. Partially accepted in finding of fact 17. 11. Partially accepted in findings of fact 3 and 16. Note - Where a proposed finding has been partially accepted, the remainder has been rejected as being irrelevant, unnecessary, cumulative, not supported by the more persuasive evidence, or a conclusion of law. COPIES FURNISHED: Miles N. Francis, Jr. Executive Director Jacksonville Transportation Authority P. O. Drawer O Jacksonville, Florida 32203 F. Alan Cummings, Esquire Mary M. Piccard, Esquire P. O. Box 589 Tallahassee, Florida 32302-0589 Cindy A. Laquidara, Esquire Kenneth A. Tomchin, Esquire P. O. Box 4099 Jacksonville, Florida 32201 Herbert R. Kanning, Esquire 12-14 East Bay Street Suite 302 Jacksonville, Florida 32202
The Issue As stated by the parties in the joint stipulation to limit issues: whether the costs of $70,455.00 associated with the Moore Haven office of Petitioner are eligible costs under the Community Services Block Grant (CSBG) administered by Respondent.
Findings Of Fact At all times material to the issues of this matter, the Petitioner was the grantee of a community services block grant. Generally, the Department enters into CSBGs for a defined period of time for defined work to be performed by the grantee. The work normally entails defined services to low income people. In this case, the COFFO was to provide personnel, materials, services, and facilities as set forth by their agreements to low income persons in Collier, Dade, Glades, Okeechobee, Polk, Hardee, Indian River, DeSoto, Highlands, Hendry, Lee, and Palm Beach Counties. At all times material to this matter, COFFO acknowledged that it is governed by applicable laws and rules related to CSBGs, including, but not limited to: The Omnibus Budget Reconciliation Act of 1981 (P.L. 97-35, as amended), 45 C.F.R. Part 96, and Chapter 9B-22, Florida Administrative Code. Rules governing CSBGs require written documentation both as to the person served and the activity or service provided to such individual. On September 14, 1995, the Department notified COFFO that an audit had determined a lack of justification for funds to continue operation of the COFFO Moore Haven field office Such notice claimed that the field work performed by an independent audit firm found "no documentation to support the expensing of CSBG funds at the Moore Haven field office." The Department invited COFFO to provide the needed documentation to support its claim for reimbursement. For the three year period at issue, COFFO was unable to provide documentation for the individuals served at the Moore Haven office. While COFFO claimed twenty-seven persons appeared at that office for service, it also maintained that such persons would have been routed to the COFFO office at Immokalee for services. Regardless, neither office produced records to verify that eligible individuals received eligible services. COFFO maintains that since it met the overall terms of its agreements, whether at the Moore Haven office or elsewhere, it should be entitled to all funds claimed. Additionally, COFFO claims that since the Department did not cite inadequate records at Moore Haven to them at an earlier time, they were unable to correct any deficiencies timely and thus avoid the issue inherent in this case. Normally, exit interviews conducted by Department staff incidental to a monitoring visit alert grantees of any deficiencies noted during the visit. In this case, Department staff attempted a monitoring visit at Moore Haven, but an exit interview was not conducted. COFFO did not have staff or anyone at the location at the time of the visit. At all times material to this case, the major programs for COFFO were implemented at its main office in Homestead and a field office at Immokalee. The office at Moore Haven did not have equipment or other resources to provide services. In the past, although not documented as to time, the Moore Haven office had been used to distribute emergency food, for job and budget counseling, and for recreation.
Recommendation Based on the foregoing, it is, hereby, RECOMMENDED: That the Department of Community Affairs enter a final order determining the costs associated with the Moore Haven office of Petitioner to be ineligible under the community services block grant program. DONE AND ENTERED this 23rd day of September, 1996, in Tallahassee, Leon County, Florida. JOYOUS D. 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 23rd day of September, 1996. APPENDIX TO RECOMMENDED ORDER, CASE NO. 95-5694 and 95-5695 Rulings on the proposed findings of fact submitted by the Petitioner: Paragraphs 2, 3, 5, and 9 are accepted. With regard to paragraph 1, with the clarification that it is accepted that COFFO provided services to migrant and seasonal farmworkers but could have provided services to any eligible recipient; the paragraph is otherwise accepted. The first three sentences of paragraph 4 are accepted; the remainder is rejected as contrary to the weight of the evidence or argument of law. With the clarification that forms were not maintained at the Moore Haven office demonstrating eligible services were rendered to eligible recipients, paragraph 6 is accepted. Paragraphs 7 and 8 are rejected as irrelevant or immaterial to the issue of this case, or not supported by reference to the record. The first two sentences of paragraph 10 are accepted; the remainder is rejected as contrary to the weight of credible evidence or irrelevant as stated. With regard to paragraph 11, the first sentence is accepted. The remainder of the paragraph is rejected as irrelevant or contrary to the weight of the credible evidence as stated. Paragraph 12 is rejected as contrary to the weight of the credible evidence. Rulings on the proposed findings of fact submitted by the Respondent: None submitted. COPIES FURNISHED: Arturo Lopez Coalition of Florida Farmworker Organizations, Inc. Post Office Box 388 Homestead, Florida 33090 Pedro Narezo Coalition of Florida Farmworker Organizations, Inc. Post Office Box 388 Homestead, Florida 33090 Barbara Jo Finer Department of Community Affairs 2555 Shumard Oak Boulevard Tallahassee, Florida 32399-2100 Carol Soliz, Board Chairperson Coalition of Florida Farmworker Organizations, Inc. P.O. Box 1987 Sebring, Florida 33871-1987 James F. Murley Secretary Department of Community Affairs 2555 Shumard Oak Boulevard, Suite 100 Tallahassee, Florida 32399-2100 Stephanie M. Gehres General Counsel Department of Community Affairs 2555 Shumard Oak Boulevard, Suite 325-A Tallahassee, Florida 32399-2100
Findings Of Fact After the Department of Transportation (DOT) proposed to reject its bid on State Project, Job No. 97860- 3319 as unresponsive, for failure to meet a women's business enterprise (WBE) goal, and failure to document good faith efforts to reach the goal, Capeletti initiated substantial interest proceedings, Capeletti Brothers, Inc. and State Paving Corporation vs. Department of Transportation and John Mahoney Construction Company, Inc., No. 85-3003, contending that it had made good faith efforts to meet the goal and that it had adequately documented the efforts; that the second low bidder had not met the goals; that DOT treated the goals as quotas; and that the DOT committees who evaluated the bids met in violation of the Sunshine Law. At the hearing in the present case, the parties stipulated that Capeletti's "bid was rejected because of noncompliance with Rule 14-78.03 as it relates to women's business enterprises and for noncompliance with the bid specifications which incorporated those provisions. The rule provisions under challenge read, in pertinent part: 14-78.03 General Responsibilities. In furtherance of the purpose of this rule chapter, the Department shall establish overall DBE and WBE goals for its entire DBE one WBE program. In setting the overall goals the Department shall consider the following factors: the number and types of contracts to be awarded by the Department; the number, capacity, and capabilities of certified DBEs and VBEs likely to be available to compete for contracts let by the Department; and the past experience of the Department in meeting its goals and the results and reasons therefore. To implement its DBE and WBE goal program the Department may: . . . (b) establish contract goals on each contract with subcontracting opportunities for certified DBEs and WBEs The Department shall establish separate contract goals for firms owned and controlled by socially and economically disadvantaged individuals and for firms owned and controlled by women. In setting contract goals, the Department shall consider the following factors: the type of work required by the contract to be let; the subcontracting opportunities in the contract to be let; the estimated total dollar amount of the contract to be let; and the number, capacity and capabilities of certified DBEs and WBEs. For contracts with an estimated total dollar amount of $1,000,000 or less, the contract goals shall not exceed 50 percent of the identified potential for DBE and WBE participation. For contracts with an estimated total dollar amount of $1,000,000, the contract goals shall not exceed 75 percent of the identified potential for DBE and WBE participation. For all contracts for which DBE and WBE contract goals have been established, each bidder shall meet or exceed or demonstrate that it could not meet, despite its good faith efforts, the contract goals set by the Department. The DBE and WBE participation information shall be submitted with the contractor's bid proposal. Award of the contract shall be conditioned upon submission of the DBE and WBE participation information with the bid proposal and upon satisfaction of the contract goals or, if the goals are not met, upon demonstrating that good faith efforts were made to meet the goals. Failure to satisfy these requirements shall result in a contractor's bid being deemed nonresponsive and the bid being rejected. DOT proposes to deem Capeletti's bid nonresponsive forits conceded failure to meet a WBE goal and for the alleged failure to document good faith efforts to meet the goal. Citation Deleted In the course of the adoption of amended Rule 14- 78.03, Florida Administrative Code, Bjarne B. Andersen, Jr., an attorney on the staff of the Joint Administrative Procedures Committee, wrote Ms. Margaret-Ray Kemper, DOT's Deputy General Counsel, on January 22, 1985, with reference to amended Rule 14-78.03, stating: Sections 339.05 and 339.081, F.S., contain no specific rulemaking authority . . . while we do agree that the rule appears in part to implement s.339.05, F.S., as amended by Ch. 84-309, L.O.F.; we do not believe this "assent to Federal aid" is specific rule authority. It is at best implied authority. The day before a DOT employee (who, counsel represented at hearing, is not a lawyer) had written Ms. Elizabeth Cloud, Bureau Chief, Bureau of Administrative Code and Laws, Department of State, as follows: Based upon a telephone conversation with Mr. Bjarne B. Andersen, Jr. of the Legislative Joint Administrative Procedures Committee and further legal review by our office, we request that the . . . "law implemented" be amended to . . . [delete reference to Section 339.05, Florida Statutes (1984 Supp.)] In an internal memorandum dated March 8, 1985, DOT's Deputy General Counsel set out DOT's legal position in these words: Subpart A of 49 CFR, Part 23, defines minority persons . . . The definition of minority does not include women. However, women are encompassed within the definition of minority business enterprise which is defined as a small business concern owned and controlled by one or more minorities or women. 49 CFR, 23.5. 49 CFR, Part 23, Subpart C, sets forth general requirements for all recipients of federal funds. Among those requirements is a policy statement to be included in every financial assistance agreement affirming a commitment to MBE/DBE participation in contracts financed in whole or in part with federal funds. Also required is a MBE/DBE affirmative action program which must be incorporated by reference into financial assistance agreements. The program is made "a legal obligation and failure to carry out its terms shall be treated as a violation of this financial assistance agreement." 49 CFR, S23.43(b). The goal program is one of the required WBE/DBE program components. 49 CFR, S23.45(g). . . . However, although women are included within the definition of MBEs, 49 CFR, Part 23, Subpart C, requires recipients to establish separate overall and contract goals for firms owned and controlled by minorities and firms owned and controlled by women. 49 CFR, 23.45(g)(4). The memorandum relies exclusively on 49 CFR, Part 23, Subpart C, 23.45(g)(4) as authority for Florida's WBE program, citing no federal or state statutes as authority.
Findings Of Fact Based on the stipulations of the parties, on the exhibits received in evidence, on the testimony of the witnesses at the hearing, and on the deposition testimony received in evidence, I make the following findings of fact: On October 30, 1985, the Florida Department of Transportation ("FDOT") received and opened sealed bids on State Project Number 72270-3431, in Duval County, Florida. Five bids were submitted for this project. The lowest bid, in the amount of $6,235,948.35, was submitted by Hubbard Construction Company ("Hubbard"). The amounts of the other bids were as follows: the second low bidder, $6,490,796.91; the third low bidder, $6,519,447.90; the fourth low bidder, $7,470,941.74; and the fifth low bidder, $7,477,038.49. All bids submitted were more than seven per cent over FDOT's estimate of the project price. The two lowest bids also appeared to be unbalanced and, as set forth in more detail below, the Hubbard bid was in fact unbalanced in several particulars. It is FDOT policy to give special review to bids that are more than seven per cent above the estimated price of the project. All bidders were made aware of this policy by the following language on the first page of the Notice To Contractors: Bidders are hereby notified that all bids on any of the following projects are likely to be rejected if the lowest responsive bid received exceeds the engineer's estimate by more than seven per cent (7 percent). In the event any of the bids are rejected for this reason, the project may be deferred for readvertising for bids until such time that a more competitive situation exists. Upon review of the bids submitted on the subject project, FDOT decided to reject all bids. By notices dated December 6, 1985, all bidders were advised that all bids were rejected. The stated reasons for the rejection of all bids were as follows: All bids were too high; the apparent first and second low bidder's bids were unbalanced and the apparent first low bidder failed to meet the WBE Requirements. Hubbard submitted its formal written protest to the FDOT regarding the proposed rejection of its bid on the subject project on January 3, 1986. This protest was made pursuant to Section 120.53, Florida Statutes (1985), the instructions to bidders and bid information provided by the Department, and rules of the Department, including Rules 14-25.04 and 14-25.05, Florida Administrative Code. Unbalancing occurs when a contractor puts a higher price on a particular item of work in the project in anticipation of using more of that item than the FDOT has estimated will be required. Unbalancing can also occur when a lower than estimated price is placed upon a particular item. When a bid appears to be unbalanced, the bid is submitted to the Technical Awards and Contract Awards committees for review. In this case, the FDOT's preliminary estimate personnel discovered six items that were unbalanced within Hubbard's bid. The first item of concern was an asphalt base item for which the FDOT's estimate was $4.00 per square yard and the Hubbard bid was $19.29 per square yard. The second item was clearing and grubbing for which FD0T's estimate was $50,000 and Hubbard's bid was $200,000. The third item was removal of existing structures for which FDOT's estimate was $190,762 and Hubbard's bid was $38,000. The fourth item was installing new conductors for which FDOT's estimate was $251,000 and Hubbard's bid was $141,000. The fifth item was removal of existing pavement for which FDOT's estimate was $78,000 and Hubbard's bid was $153,000. Finally, the sixth item was surface asphalt items for which FDOT's estimate was $98,000 and Hubbard's bid was $169,000. The FDOT has a policy that any bid that is seven per cent or more over the estimate will go before the Awards Committee for review. Further, the FDOT has a policy that whenever the bids are more than seven per cent higher than the estimate, the FDOT's Bureau of Estimates will then review their estimate and the apparent low bidder's bid to determine whether the original estimate was correct. The FDOT maintains a Women's Business Enterprises ("WBE") program. The FDOT's program requires that successful bidders provide for participation of women owned and controlled business in FDOT contracts. The program is implemented by the setting of so-called "goals" for certain projects. The goal is stated as a percentage of the total dollar bid for each project. Thus, the WBE goal for a project requires that the bidder utilize FDOT certified WBE's in constructing the project to the extent that the FDOT's goal is a percentage of the total bid. The FDOT has implemented rules to effectuate its WBE program. Rule 14- 78, Florida Administrative Code (amended effective May 23, 1984). In submitting a bid, the rules offer the bidder the option of meeting the WBE goals or submitting proof of a good faith effort to meet the goal and if a good faith effort is sufficient, the FDOT may waive the goal. The FDOT's bid package and specifications, as furnished to contractors, in no place referred to the Department's rule providing that only 20 percent of the amount of subcontracts with WBE suppliers shall count toward the goals on Federal aid projects. The specifications clearly state that WBE suppliers may be counted toward the goals. The specifications as furnished by the Department also imply that the 20 percent rule applies only to non-federal aid jobs. The project in question in this case is a Federal aid project. There is a conflict between the rule and the language of the specifications which creates an ambiguity in the specifications, as well as a trap for the unwary bidder who overlooks the requirements of the rule. The FDOT is in the process of amending the specifications to make them conform to the rule. The Special Provisions contained within the bid specifications established certain minority participation goals for this project--ten per cent for Disadvantaged Business Enterprises (DBE) and three per cent for Women Business Enterprises (WBE). FDOT personnel analyzed the bid documents submitted by Hubbard according to the criteria set forth at Rule 14-78, Florida Administrative Code, and determined that Hubbard exceeded the DBE goal but failed to meet the WBE goal. Hubbard's WBE participation was two per cent. All other bidders on the project met both of the DBE and WBE goals. When Hubbard submitted its bid on this project, Hubbard thought that it had complied with the three per cent WBE goal by subcontracting 3.5 per cent of the contract price to WBE certified firms. However, 2 per cent of the contract price was to be subcontracted to a WBE for supplies to be furnished by a WBE who was not a manufacturer. Accordingly, when the 20 per cent rule discussed above was applied to that 2 per cent, the total amount of WBE participation which could be counted toward Hubbard's compliance with the rule was approximately 2 per cent, which was less than the 3 per cent goal. Once it was determined that Hubbard had failed to meet the WBE goal, FDOT personnel analyzed Hubbard's good faith efforts package pursuant to Rule 14-78, Florida Administrative Code. Hubbard's good faith efforts package failed to demonstrate that Hubbard had taken sufficient action in seeking WBE's to excuse its failure to meet the WBE goal for this project. Similarly, Hubbard's evidence at the hearing in this case was insufficient to demonstrate that Hubbard had taken sufficient action in seeking WBE's to excuse its failure to meet the WBE goal for this project. Most telling in this regard is that all four of the other bidders on this project were successful in meeting or exceeding the DBE and WBE goals.
Recommendation For all of the foregoing reasons, it is recommended that the Florida Department of Transportation issue a Final Order rejecting all bids on Federal Aid Project No. ACIR-10-5 (76) 358 (Job No. 72270-3431). DONE AND ORDERED this 24th day of March 1986, at Tallahassee, Florida. MICHAEL M. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 FILED with the Clerk of the Division of Administrative Hearings this 24th day of March 1986. APPENDIX TO RECOMMENDED ORDER IN DOAH CASE NO. 86-0O24BID The following are my specific rulings on each of the proposed findings of fact submitted by each of the parties. Rulings on findings proposed by the Petitioner, Hubbard Construction Company The substance of the findings of fact proposed by the Petitioner in the following paragraphs of its proposed findings have been accepted and incorporated into the findings of fact in this Recommended Order: 1, 2, 3, 4, 5, and 8. The substance of the first sentence of paragraph 6 is accepted. The remainder of paragraph 6 is rejected as an unintelligible incomplete statement. Paragraph 7 is rejected as not supported by competent substantial evidence. (The Standard Specifications for Road and Bridge Construction were not offered in evidence.) Paragraph 9 is rejected for a number of reasons, including not being supported by competent substantial evidence, being to a large part irrelevant, being predicated in part on an erroneous notion of which party bears the burden of proof, and constituting in part legal argument rather than proposed findings of fact. The first and third sentences of paragraph 10 are accepted in substance. The second and fourth sentences of paragraph 10 are rejected as irrelevant. The last sentence of paragraph 10 is rejected as irrelevant and as not supported by competent substantial evidence. Paragraph 11 is rejected as irrelevant and as including speculations which are not warranted by the evidence. Paragraph 12 is rejected as irrelevant and as including speculations which are not warranted by the evidence. Paragraph 13 is rejected as not supported by competent substantial evidence and as being contrary to the greater weight of the evidence. Rulings on findings proposed by the Respondent, Department of Transportation The substance of the findings of fact proposed by the Respondent in the following paragraphs of its proposed findings have been accepted and incorporated into the findings of fact in this Recommended Order: 1, 2, 3, 4, 5, 6, 7, and 8. Paragraph 9 is rejected as irrelevant. COPIES FURNISHED: John E. Beck, Esquire 1026 East Park Avenue Tallahassee, Florida 32301 Larry D. Scott, Esquire Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32301-8064 Thomas Drawdy, Secretary Department of Transportation Mail Station 57 605 Suwannee Street Tallahassee, Florida 32301-8064
Findings Of Fact The Parties Gleason Brothers and Company (Gleason), as stipulated, is a small business party within the meaning of Section 57.111, Florida Statutes. Gleason owns real property in Brevard County, Florida, specifically described as Sections 28 and 33, Township 27 South, Range 36 East. The Department of Environmental Protection (DEP) is a state agency with jurisdiction to issue wetland resource permits and management and storage of surface water (MSSW) permits pursuant to Chapters 373 and 403, Florida Statutes. The Permit Proceeding On June 18, 1993, the Brevard County Solid Waste Management Department (Brevard County) applied to DEP for wet land resource and MSSW permits required for the county's landfill expansion and new construction. Part of the landfill project consisted in a proposal for off-site mitigation which was required to offset wetland impacts by the landfill expansion. The off-site mitigation property is several miles from the landfill site and is described as west of Interstate 95, north of State Road 500, Sections 27 and 34 Township 27 South, Range 36 East. The off-site mitigation property lies adjacent to, and east of, the subject Gleason property. Both Gleason's and the off-site mitigation property are east of the St. John's River, with Gleason's property lying between the river and the off-site mitigation property. In its 1993 application, Brevard County proposed to restore the historic natural grade of the mitigation property by removing certain dikes or berms and by filling some ditches, which berms and ditches were created many years ago by the former owners, the Platts, to improve the property for agricultural use. Some of those ditches and berms run along the property line between the Gleason and mitigation property. In August and September 1993, Brevard County requested Gleason's permission to enter its land to install two piezometers as part of a scope of work to monitor impacts of the proposed off-site mitigation project. The county provided a copy of the scope of work and a map to Gleason's attorney, Robert Riggio. On October 21, 1993, Riggio responded, by letter to Richard Rabon, Director, Brevard County Solid Waste Management Department, that Gleason would not allow permission to enter its land for hydrological monitoring. Furthermore, Riggio stated, Gleason was concerned about the effects of potential flooding and an artificial increase in the area's water table which could "upset the value and continued usability of its land". On November 15, 1993, Riggio wrote to DEP staff person, Ann Wonnacott (now, Ann Ertman) requesting notice of intended agency action on the county's landfill permits, and expressing Gleason's concern that the proposed project, including filling of ditches and removing berms, would artificially raise water levels, flood and devalue Gleason property. On February 11, 1994, Riggio sent DEP a map of Gleason's property and a legal description. On November 18, 1994, Riggio again wrote to Ann Wonnacott and objected to the landfill project on Gleason's behalf. Again, Riggio stated that the off- site mitigation plan included filling ditches which provided a flow of water in which Gleason asserted "legally recognizable rights". In the meantime, in response to Gleason's concerns, in November 1993, DEP asked Brevard County to provide reasonable assurance that the off-site mitigation project would not flood surrounding property. Brevard County's licensed professional engineers then undertook a groundwater modeling analysis and gathered information and performed testing for a stormwater modeling analysis. In reports provided in April 1994 the engineers concluded that the project would not increase flooding on Gleason's land. DEP's expert in surface water management reviewed the engineering reports, data and reports on the area from the St. Johns River Water Management District, USGS quadrangle maps and aerial photographs, and he agreed that the project would not increase flooding on Gleason's land. DEP staff review of the Brevard County applications revealed that the applications met relevant rule and statutory criteria, and on February 7, 1995 DEP issued its Notice of Intent (NOI) to issue a wetland resource permit for the onsite and off-site parts of the project, and an MSSW permit for the onsite part of the project only. The draft permit provided that no work could commence prior to issuance of the MSSW permit for the off-site mitigation work. DEP staff considered the off-site mitigation MSSW permit the "linchpin" of the entire project: without it, no work on any part of the project could commence. Gleason, though its attorney, Robert Riggio, timely filed a Section 120.57(1), Florida Statutes petition for formal administrative hearing challenging DEP's intent to issue permits to Brevard County. The petition was forwarded to the Division of Administrative Hearings. Gleason's petition raised several material issues: that the removal of the berms and filling of the ditches (called "drainage canals" by Gleason) would alter the "natural and historic hydroperiod" of Gleason's property, increasing water levels and enhancing the growth of weeds and other noxious vegetation; that it appeared that some of the ditches to be filled were actually within the boundaries of Gleason's property; and that DEP failed to adequately assess the effect of the proposed permitted action on the property of others. Discovery commenced and Gleason continued to object to Brevard County's requests to enter Gleason's land for inspections and testing. From Brevard County's perspective, the main function of filling in the ditches was to obtain additional mitigation credits for the area of the ditches. Relying on its engineers, the county did not consider that the ditches performed a significant hydrological function. At some point in time after Gleason's petition was filed, Brevard County agreed to not fill the ditches and submitted a modified application to DEP. In July 1995, Brevard County submitted to DEP its application for the MSSW permit for the off-site mitigation project (the "linchpin" permit). The application included removing the berms but did not propose filling in the ditches. In August 1995, DEP issued notices of intent to grant the revised permit and the off-site mitigation MSSW permit. Gleason, Brevard County and DEP signed a joint stipulation and motion to relinquish jurisdiction in the Division of Administrative Hearings case on December 21, 1995, The motion was granted, and Division of Administrative Hearing's files were closed. On January 3, 1996 DEP entered its final order and issued the permits, as revised. "Prevailing Party" From the time when it was first informed of the project, Gleason's primary concern was the county's proposal to fill the ditches. Whether this concern was misguided or whether it was legitimate, it was not until the petition was filed, and some time thereafter, that the county changed its application. Gleason's February 22, 1995 petition specifically requested the alternative relief of an order modifying the subject permits by leaving the "drainage canals" intact. When it obtained its relief by settlement prior to an evidentiary hearing, Gleason became a "prevailing party". A Reasonable Basis in Law and Fact Ann Wonnacott Ertman reviewed Brevard County's permit application, including the off-site mitigation project and she visited the mitigation site. By walking along the ditch between the site and the Gleason property she was able to view both properties, although obviously not the entire two sections owned by Gleason. The Gleason property viewed by Ms. Ertman was flat, and predominately dominated by wetland vegetation. She saw some cattle grazing, but no other uses or improvements to the property. As understood by Ms. Ertman, the purpose of the off-site mitigation project was to reestablish the hydrology which existed prior to the Platts' construction of the berms and ditches. Those berms prevented some flood waters from the St. Johns River and Lake Washington from flowing onto the Platt property. Removal of the ditches and berms would therefore allow the flood waters collecting on Gleason's property to sheet flow into the mitigation site. Both the Platt property and Gleason property are considered to be within the mean annual and ten-year floodplain of the St. Johns River. As viewed by DEP and Brevard County, the off-site mitigation project would reduce, not increase water, on the Gleason property. On the other hand, Gleason and its consultant conjectured that stormwater runoff flowing from the slightly higher elevations on the Platt property would flow unimpeded onto the lower Gleason property if the ditches were removed. This conjecture was based on an assumption that the ditches served a significant hydrological function by draining water off the property and transporting it away somewhere. When Gleason, through its attorney, made its concerns known to DEP, Brevard County was required to respond and its consultants were required to perform further studies and tests. Based on their studies and tests and computer modeling, Brevard County's consultants concluded that removing the ditches would not increase, but would rather slightly decrease, the amount of impervious surface area at the mitigation site and there would be a slight decrease in the volume of stormwater runoff flowing from that land to Gleason's land. Brevard County's consultants also determined that, notwithstanding the size of the ditches, the soil types in the area acted as a barrier to the water and the ditch could not exert a significant drawdown effect. All of the information available to the DEP staff who reviewed the application competently supported the conclusion that filling the ditches would have no negative effect on Gleason's adjacent property. This information included observations from staff site visits, detailed information from Brevard County's consultants, U.S.G.S. quadrangle maps, aerial photographs, and uniquely relevant documents published by the St. Johns River Water Management District. This information properly outweighed the unsupported conjectures expressed by Gleason and its consultant, and after finding the application otherwise met the statutory and regulatory criteria, DEP had a reasonable basis to issue its intent to grant the permit. DEP was never apprised of Gleason's claim that some part of the ditches were on its property until Gleason's petition was filed in response to the notice of intent to issue the permit. In its initial application Brevard County represented to DEP that it was the record owner of the land where the project was proposed. DEP does not require a detailed land survey with the application, as that is an expense that would be unnecessary if the project were ultimately disapproved. Instead, the survey is a condition of the permit; that is, it must be accomplished prior to commencement of an approved project. DEP does not authorize trespass on property not belonging to an applicant. Nor did Brevard County intentionally include Gleason-owned ditches in its project. There was no incentive for it to do so, as no mitigation credit would be allowed for such extraterritorial works. Nominal Party or Special Circumstances As the agency responsible for reviewing and acting on the applications at issue, DEP was more than a "nominal party" in this proceeding. However, in this instance, it was in the peculiar position of not being entirely in control of the outcome of the proceeding. The applicant, and not DEP, determined the project for which the permit was sought. Brevard County, and not DEP, initially chose to fill ditches, and Brevard County chose to delete that work from its amended application and from the "linchpin" application, the off-site mitigation MSSW permit. In either case, with and without the ditch filling work, DEP determined the applications met relevant criteria and merited approval. Reasonable Fees As stipulated, the fees and costs of $13,193.50 incurred by the Gleasons in the underlying action are reasonable.
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing, as well as facts stipulated to by the parties, the following relevant facts are found: Central Corporation, formerly known as TFC Teleservices Corporation, is a provider of alternative operator services (AOS). An AOS provider provides operator assisted long distance telecommunications services to various entities including hotels, motels, universities, hospitals and private pay telephone providers. This new AOS telecommunication industry emerged after 1984 when AT&T ceased paying commissions to hotels for toll-traffic from guests and when the Federal Communications Commission authorized privately-owned pay phones. There are currently nine AOS providers in Florida. Central is authorized by Certificate Number 1528, issued by the PSC on November 21, 1986, to operate as an interexchange carrier within the State of Florida. Central currently operates in Florida under an approved tariff on file with the PSC, which tariff became effective on September 15, 1987, and authorizes Central to charge certain amounts for its services. Prior to the challenged action, the PSC never placed any conditions upon Central's approved tariffed rates. Interexchange companies (IXCs) are companies which provide long distance telephone services. They are certificated by the PSC on a statewide basis and engage in competition with each other. Such competition, along with the PSC's fitness screening and approval of tariffed rates, is considered adequate to protect the public. Consequently, the PSC does not regulate the rates of IXCs, at least minor IXCs including AOS providers. The PSC does not set rate levels for minor IXCs and does not set an authorized rate of return on equity for minor IXCs. Indeed, in accordance with Section 364.337, Florida Statutes, which authorizes the PSC to exempt from the requirements of Chapter 364 a telephone company which is in competition with or duplicates the services of another telephone company, the PSC has placed AOS providers under the separate rules and regulations pertaining to IXCs, which are not rate base regulated. The PSC has never established for any minor IXC a rate base or an authorized or required rate of return. Local exchange telephone companies (LECs) serve a franchised monopoly area. The LEC agrees to provide service indiscriminately to the public without competition, and, in return, the PSC guarantees the LEC the opportunity to earn a fair rate of return designed to emulate what might be achieved in a competitive market. The PSC sets rate bases and rate levels for LECs, and authorizes the rate of return on equity. In other words, unlike IXCs, LECs are rate base regulated utilities. LECs and/or the PSC may initiate rate relief or rate decrease proceedings. Interim relief is often necessary and is authorized by statute and case law due to the regulatory lag time pending the conclusion of the proceedings. Such interim rate relief or interim rate decreases are done on an individual case-by-case basis and are based upon the financial condition of the particular LEC. The PSC has never provided interim rate relief or interim rate decreases on an industry-wide basis. It has set a "generic" rate cap, establishing a 25 cent local call rate for privately-owned pay phones, but that was done on a prospective basis. The PSC has never imposed an industry-wide rate cap, with a requirement to hold subject to refund monies in excess of that cap. At the request of PSC staff, the PSC opened, on December 18, 1987, Docket Number 871394-TP styled "In re: Review of Requirements Appropriate for Alternative Operator Services provided from Public Telephones." This was designated as a "generic" proceeding, and emanated from numerous complaints the PSC had received from end users (i.e., guests of hotels and motels, hospital patients and pay telephone users) who had been charged for alternative operator services. The nature of the complaints included end users being charged for AOS without being aware of using the service, lack of prior knowledge of the rates being charged, inability to use the services of their preferred IXC and inability to access the LEC operator. The most significant complaint, however, was the excessive rate being charged by some AOS providers. The evidence demonstrates that the intrastate long distance rates charged by Central are considerably higher than the rates charged by Southern Bell, an LEC. Central entered an appearance in Docket No. 871394-TP on December 30, 1987. At an Agenda Conference held on February 2, 1988, the PSC voted on various recommendations of its staff. As pertinent to this proceeding, the PSC voted to set an expedited hearing to be held as soon as practicable to determine whether AOS are in the public interest and various other issues concerning the provision of AOS. The PSC also voted to require all AOS providers to place all revenues subject to refund that are generated by charges in excess of the AT&T rate for a comparable call. This vote exceeded the staff's recommendation, which did not include a "hold subject to refund" requirement. At an Agenda Conference held on February 16, 1988, the PSC voted to reconsider the rate cap applicable to AOS providers and to hold the Order reflecting their February 2nd vote pending such reconsideration. At its Agenda Conference held on March 15, 1988, the PSC reconsidered and raised the rate cap amount from the AT&T rate for a comparable call to the LEC rate for a comparable call, thereby decreasing the amount of revenues that AOS providers must hold subject to refund. The action taken on March 15, 1988, was embodied in written Order No. 19095 issued on April 4, 1988. This Order is entitled "Order Setting for Hearing the Issue of Whether Alternative Operator Services are in the Public Interest and Placing Revenues Subject to Refund ..." The remainder of the title relates to "proposed agency action" concerning other requirements for AOS providers, which are not challenged in this proceeding. Order No. 19095 declares that paragraph 7, which requires AOS providers to hold subject to refund all charges collected in excess of the approved rate, is effective February 2, 1988. The Order further recites "We are cognizant of the serious impact this action may have on AOS providers and their customers. However, it is our view that we must take immediate and effective action to remedy the abusive situation we perceive exists at this time. It is in consideration of these conflicting concerns that we have chosen the least drastic action available. This action does not require AOS providers to immediately stop charging current rates. It does not suspend or revoke any certificates of public convenience and necessity. It does not levy any fines or penalties. It merely places revenues subject to refund to allow for the return of these monies if it is subsequently decided that they were generated from inappropriate charges." Although not embodied within the terms of Order No. 19095, the parties stipulated that the hearing to determine public interest is scheduled for August 9-12, 1988. Central requested the PSC to hold an evidentiary hearing prior to making the rate cap take effect, but this request was denied. The rate cap requirement and the disposition of the revenues held by AOS providers pursuant to Order No. 19095 are issues to be determined at the hearing to be held August 9- 12, 1988. The rate cap requirement set forth in Order No. 19095 applies to all AOS providers operating in Florida. Central's current tariff authorizes Central to charge more than the rate cap specified in Order No. 19095. Prior to Order No. 19095, there was no rate cap on AOS providers. Regardless of whether the PSC ultimately orders a refund, the "hold subject to refund" requirement which became effective on February 2, 1988, has immediate and significant adverse impacts upon Central. Central is a relatively new company and must use the revenue it generates on a daily basis. Prior to Order No. 19095, Central was able to rely on the unconditional use of revenues it receives under its approved Florida tariff. If Central continues to charge its current tariffed rates, it will have to set aside the difference between what it bills and the rate cap, place it in escrow and will not be able to utilize those funds. It is estimated that the revenues Central might have to refund if it continues to charge its current rates would between $1.2 and $1.7 million. Nonrecoverable commissions and the cost of a actually making the refund would increase the potential cost of the refund. If Central were to reduce its rates to the LEC rate, it would lose a substantial amount of revenue and does not know where it can make up that loss. Even if this option were chosen today, Central would still have to determine to whom it provided services since February 2, 1988, and what the potential refund would be. Additional staffing and/or computer equipment would be necessary to keep track of prior users and charges. A third option is for Central to withdraw from Florida intrastate operations pending the outcome and conclusions of the August PSC proceedings. Central operates in many states. While its Florida business makes up only 8 to 10 percent of its intrastate revenues, some 40 percent of Central's entire business originates at Florida properties. If Central were to cease paying commissions on intrastate revenues, its intrastate business originating from Florida would go to its competitors. While Central has made the decision not to do business in certain states due to those state's methods of rate regulation, such decisions were made on a prospective basis. Other immediate and adverse impacts upon Central include the administrative costs and burdens associated with separate bookkeeping for its Florida operations, as well as separate books within Florida to segregate the difference between the rate cap and its tariffed rates. Central has already experienced delays in loan financing. Lenders want to wait and see what the PSC does with AOS providers. The valuation of the company is affected due to money taken out of the revenue stream and placed in escrow. Central's financial statement must reflect the contingent liability of potential refunds and full disclosure must be made to the Federal Communication Commission.
The Issue The primary issue in this case is whether the Minority Business Enterprise (MBE) certification issued by the South Florida Water Management District (SFWMD) to the Respondent, Berryman & Henigar, Inc. (BHI) should be revoked. In addition, BHI seeks an award of attorney's fees and costs under Section 120.595(1), Florida Statutes.
Findings Of Fact It is undisputed that Raymond J. Berryman is an "Asian American" under the part of the definition of "Minority" person under Florida Administrative Code Rule 40E-7.621(12)(b). (All rule citations are to the current Florida Administrative Code.) Mr. Berryman owns 77.4 percent of Berryman & Henigar Enterprises, Inc. (BHE), a Nevada corporation formed in March 1994. BHE is the sole owner of Berryman & Henigar, Inc. (BHI), a Florida corporation and the Respondent in this case. BHE also owns holds 100 percent of the stock of Berryman & Henigar, Inc., a California corporation (BHI California), and Employment Systems, Inc., a California corporation (ESI). BHE also holds ten percent of the stock of GovPartner.com, a Nevada company. BHI and BHI California are both engineering firms. BHI's business in Florida is oriented more towards environmental engineering consulting. The business of BHI California in that state is more oriented towards engineering management consulting. BHI California does more building safety and project management work than BHI in Florida. Notwithstanding these differences between the business of the two corporations, they can be said to be in business in the same or an associated field of operation. BHE provides a corporate shield and consolidated tax reporting for the companies it owns. Most of its directors and officers also serve as directors and officers of the subsidiaries. As a result, BHI and BHI California share the following directors: Ray Berryman, Mary Berryman, Jon Rodriguez, and Scott Kvandal. They also share three or four officers, including Mr. Berryman as CEO. BHE also provides accounting, legal, human resource, and marketing services to all the affiliates under the holding company's umbrella. BHE's marketing department refers to both BHI and BHI California as "Berryman and Henigar" in order to imply the size and strength of BHE and all of its affiliates. By holding both businesses out as one large company, the marketing department attempts to make BHI "look as grandiose as possible." BHE has a negative net worth, as reflected in the consolidated statements of its affiliates. BHI itself has approximately 114 permanent, full-time employees; however, altogether, BHI and its affiliates have well over 200 permanent, full-time employees (although the exact number of employees of BHI's affiliates was not clear from the evidence). Candice Boyer, SFWMD's Senior MBE Coordinator, testified that SFWMD consistently interprets its MBE rules to disqualify an entity either: (1) owned by a holding company not certified by SFWMD as an MBE, or at least not able to qualify for such certification (e.g., by not being domiciled in Florida); (2) affiliated with or sharing resources with another business concern in the same or an associated field of operation if the affiliate is not certified by SFWMD as an MBE, or at least is not able to qualify for such certification (e.g., by not being domiciled in Florida); or (3) whose net worth, or number of permanent, full-time employees, together with all affiliates, exceeds the rule's limits. However, the evidence of SFWMD's actual practice (which was limited to its practice with respect to BHI and ESJV) did not support Boyer's testimony in that regard. BHI first sought certification from SFWMD in July 1996 under an MBE-type program in effect at the time and was denied because the gross receipts of BHI, apparently together with its affiliates, were too high under the program's guidelines. SFWMD's MBE rules, as first adopted in Part VI of Florida Administrative Code Rule Chapter 40E-7, entitled "Supplier Diversity and Outreach MBE Contracting Rule," went into effect on October 1, 1996. In April 1997, SFWMD "graduated" BHI under one of the new MBE rules (since repealed) that counted subcontractor participation by a firm exceeding the size standards (at that time, $3 million net worth and $2 million in net income after federal income taxes, excluding carryover losses) towards a prime contractor's MBE participation goal. In December 1997, BHI updated its application for MBE certification and was granted full certification in the fields of civil engineering, surveying, and construction management for a three-year period of time, even though the application revealed BHI's continued affiliations with BHE and the other affiliated companies. In March 2001, BHI was re-certified for another three years notwithstanding that it continued to be affiliated with BHE and the other companies. Boyer's only explanation was that she should have investigated the affiliates in December 1997 and March 2001 but did not. In late 2001 or early 2002, a joint venture called Everglades Survey Joint Venture (ESJV) sought MBE certification in the field of surveying, with BHI as the qualifying member of the joint venture. Certification was denied because Mr. Berryman did not have a required surveyor's license, as required by Rule 40E-7.653(5). Although not necessary to the decision, the Recommended Order entered by Administrative Law Judge Donald R. Alexander found that ESJV otherwise met the requirements for certification. SFWMD entered a Final Order adopting those findings. Confusing evidence presented in the course of the ESJV proceeding as to BHI's net worth and number of employees caused SFWMD to focus on those issues and cause an investigation to be conducted by its Office of the Inspector General, which is defined by Rule 40E-7.621(14) as the SFWMD "office which provides a central point for coordination of and responsibility for activities that promote accountability, integrity, and efficiency in government as referenced in Section 20.055(2), F.S." The investigation, which was conducted by a consulting auditor employed by SFWMD named John Timothy Beirnes, also focused on the rules dealing with those issues and resulted in an investigative report advancing the interpretations of SFWMD's MBE rules ultimately used to support the decertification recommendation of the Inspector General, Allen Vann. Notwithstanding Boyer's testimony as to SFWMD's purported consistent interpretations of its rules, there was no evidence that SFWMD asserted these interpretations prior to issuance of the Inspector General's investigative report. Boyer also testified that other government agencies in Florida uniformly interpret their MBE-type programs in a manner that would disqualify BHI in this case. However, the evidence was clear that BHI is certified under the MBE-type programs of other agencies in Florida, including the State of Florida Department of Management Services, Orange County, the City of Orlando, and the City of Tampa. One of SFWMD's exhibits was the affidavit of an Operation and Management Consultant I for the State of Florida Department of Management Services stating: "If a firm is affiliated with other firms, I count the number of employees as well as the net worth of the firm together with all of its affiliates." SFWMD's PRO contended that this hearsay statement supported Boyer's testimony. Actually, besides being inconsistent with the action of the Department of Management Services in certifying BHI as an MBE, the hearsay statement is ambiguous, and it is not clear whether the affidavit supports Boyer's testimony as to the purported uniform interpretation of all state agencies. SFWMD's PRO cites Petitioner's Exhibit 10, page 265, as evidence that Palm Beach County decertified BHI for exceeding size limitations, contrary to Mr. Berryman's recollection of never having had an MBE-type certification decertified. In fact, the exhibit merely evidences decertification because BHI failed to respond to a request for information needed for re-evaluation of BHI's continued eligibility under recent changes to provisions of the Palm Beach County Code. In addition, while the exhibit reflects the section numbers of the changed provisions, the provisions are not further identified; and it is not clear from the evidence that they related to size limitations. Finally, the evidence was that the requirements of MBE-type programs of different jurisdiction in Florida can vary except, as of October 1, 1998, in certain respects. See Conclusion 31, infra. For that reason, denial of certification or decertification in one jurisdiction does not necessarily require similar action in another jurisdiction--which is one reason why SFWMD has not reciprocated any certifications by other jurisdictions under Rule 40E-7.651(1). No Improper Purpose BHI takes the position that SFWMD's purpose in seeking revocation of BHI's MBE certification after the Final Order in the ESJV case was improper. But the findings in the ESJV case relied upon by BHI were not necessary to the denial of EVSJ's application, which was based on the joint venture's not having the required professional license as a surveyor. It does not appear that the issues presented in this case were fully litigated in the ESJV case. It appears that the confusing evidence presented in the course of the ESJV proceeding as to BHI's net worth and number of employees prompted SFWMD to focus on those issues. In so doing, SFWMD also focused on the rules dealing with those issues and ultimately advanced interpretations of its MBE rules supporting revocation. It is not found that SFWMD fashioned those interpretations for an improper purpose--i.e., "primarily to harass or to cause unnecessary delay or for frivolous purpose or to needlessly increase the cost of licensing or securing the approval of an activity." Section 120.595(1)(e)1, Florida Statutes. Aside from the relative merits of the positions of the parties on the proper interpretation of the pertinent statutes and rules, and the earlier decision in the ESJV case, BHI's evidence of improper purpose essentially involved the timing of SFWMD's decision to initiate decertification proceedings in relation to the letting of contracts for work in which BHI intended to participate as a subcontractor, and the resulting monetary impact on BHI. BHI's evidence was insufficient to prove improper purpose.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that BHI's MBE certification not be revoked. DONE AND ENTERED this 12th day of May, 2003, in Tallahassee, Leon County, Florida. ___________________________________ J. LAWRENCE JOHNSTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 12th day of May, 2003. COPIES FURNISHED: R. Dean Cannon, Jr., Esquire Gray, Harris & Robinson, P.A. 301 East Pine Street, Suite 1400 Post Office Box 3068 Orlando, Florida 32802-3068 Catherine M. Linton, Esquire Frank M. Mendez, Esquire South Florida Water Management District 3301 Gun Club Road West Palm Beach, Florida 33406-3007 Henry Dean, Executive Director South Florida Water Management District 3301 Gun Club Road West Palm Beach, Florida 33406-3007
Findings Of Fact Based upon the testimony and proofs admitted in these proceedings, and upon the matters stipulated by the parties, the undersigned Hearing Officer finds the following facts to exist: Respondent solicited bids for the reroofing of its Winter Park 9th Grade Center Reroofing Project No. 9209 ("the Project"). Respondent also caused to be compiled a Project Manual for the Project, which among other things contains Instructions To Bidders which governed the bidding process. In its Advertisement For Bid, as well as its Instructions To Bidders, Respondent reserves the right to reject any or all Bids. The Instructions to Bidders also reserves the right to reject any and all bids when Respondent, in its sole discretion, deems it to be in its best interest to reject same. The Project Manual contains a bid form to be used by bidders. In it the bidder understands and agrees that the Owner (Respondent) reserves the right to reject the bid or any and all bids for the Project. Such language was contained in the bid submitted by Petitioner. Included in the Project Manual was a document entitled "Affirmative Action Minority and Women Business Enterprises Program for Construction Work and Construction Materials" (hereinafter "the MBE/WBE rule") which had been adopted by the School Board as an administrative rule. The MBE/WBE Rule established MBE/WBE subcontractor and supplier participation goals for Respondent construction projects, and in pertinent part: it requires bidders on Respondent construction projects to solicit (by newspaper advertisements and by letters) MBE/WBE subcontractor and supplier participation in the work on Respondent construction projects, it permits and requires a bidder who fails to meet the goals to demonstrate and prove to Respondent's MBE/WBE Manager that the bidder made a good faith effort to attain the goals, as a condition precedent to acceptance of his bid, and it establishes criteria which a bidder may use or meet in an effort to show a good faith effort. It also permits a bidder to show any other factor to prove the existence of a good faith effort. By Addendum No. 2 to the Project Manual for the Project, Respondent apprised bidders of its amendment to the MBE/WBE Rule which served to alter and increase the participation percentages of the Rule to 27.5 percent. Petitioner's bid was the apparent low bidder of five bids received by Respondent. Petitioner's bid was in the amount of $795,000.00 and was the only bid under budget. The next lowest bid was in the amount of $823,000.00. Cheesbro's bid showed that Cheesbro had no MBE/WBE subcontractor or supplier participation. All other aspects of Petitioner's bid were proper and responsive. None of the other bidders on the Project achieved the 27.5 percent M/WBE participation goal. Section II of the M/WBE Program acknowledges that the 27.5 percent M/WBE participation requirements "are goals only." This section of the M/WBE Program further states that "[n]o bid of any bidder will be rejected by the School Board solely because the bidder fails to attain the goals..., however, the bidder... must demonstrate to the MBE/WBE Manager, within 72 hours after the time of bid opening (exclusive of Saturdays, Sundays, and Holidays), that such bidder made a good faith effort to contract with qualified subcontractors and/or suppliers for the construction work sufficient to meet the requirements of the goals." Petitioner met with the Respondent's M/WBE Manager within 72 hours after the time of bid opening and demonstrated its good faith effort to contract with qualified subcontractors and/or suppliers for the construction work pursuant to the contract documents. The M/WBE Program requires that each bidder must solicit sub-bids and price quotations from MBE and from qualified MBE and WBE contractors. All potential bidders, including Petitioner, received a list of the qualified M/WBE contractors from the School Board at the pre-bid meeting. The M/WBE Program specifically sets forth the manner in which the bidders must solicit "from M/WBE subcontractors and suppliers" and "the failure of a Bidder to solicit same shall render the bid of such bidder unresponsive and the School Board will reject such bid." The School Board's M/WBE Program establishes the format by which each bidder must solicit bids from qualified M/WBE subcontractors and suppliers. Pursuant to the M/WBE Program, each potential bidder must publish advertisements in two daily newspapers which are published and widely circulated in Orange County. The Orlando Sentinel and Orlando Times are identified by the contract documents as two acceptable newspapers for these advertisements. Each bidder must also prepare and deliver, by certified or registered mail with return receipt requested, three solicitation letters to not less than three approved M/WBE subcontractors and/or suppliers. The contract documents identify an approved form for the referenced advertisements and solicitation letters. Further, the bidders must attach to their bids proof of publication and mailing for the advertisements and solicitation letters, respectively. Petitioner complied with each requirement set forth by the M/WBE with regard to soliciting sub-bids and price quotations from M/WBE subcontractors and suppliers. Petitioner timely published the requisite advertisement in the Orlando Sentinel and the Orlando Times as required by the contract documents. Petitioner also went beyond the three solicitation letters required by the contract documents and sent eight solicitation letters to approved M/WBE subcontractors on the Project. Petitioner also attempted to solicit an oral bid from Mavis Painters but none was received by them. Petitioner received only two telephone calls in response to its advertisements and solicitation letters. One M/WBE subcontractor advised Petitioner that it was going to bid on the Project as a prime contractor (which did not occur), and the other M/WBE subcontractors who called advised Petitioner that they would not bid the Project because they were too busy with other work. Petitioner received no other response to either its advertisements or solicitation letters. Petitioner attempted to make telephone contact with some of the M/WBE subcontractors to whom the letters were sent but was unable to contact them. Despite its efforts, petitioner received no price quotations from any approved M/WBE subcontractors or suppliers. And, none was included in Petitioner's bid. Petitioner is a licensed Florida roofing contractor. Petitioner bid the Project as a prime, rather than as a general, contractor. In this regard Petitioner was to retain a substantial portion of the work to be done by its own forces, rather than to subcontract out most of the work. There are certain portions of any project which lend themselves to work by subcontractors who are specialized in a particular trade. On this Project, Petitioner sought price quotations from electrical, mechanical, plumbing, lightweight concrete, and metal roofing subcontractors. These are the areas which Petitioner looked to subcontract to others on the Project. As a roofing contractor it was logical for Petitioner to do the actual roof work itself and to subcontract out the remainder of the work. Petitioner sought price quotations from approved M/WBE subcontractors on the electrical, mechanical, and plumbing portions of the work. None of the lightweight concrete installation or metal roofing M/WBE subcontractors listed by the School Board were approved applicators for the lightweight concrete installation and metal roof as specified for this Project by the School Board's architect. Therefore, Petitioner was unable to obtain any price quotations, and did not request quotations, from any approved M/WBE subcontractors in these two trade areas. Installation by a manufacturer's approved applicator is essential in order to obtain the warranty documents as required by the contract documents. Also, these two subcontract areas make up a substantially larger percentage of the overall contract amount than do the electrical, mechanical, and plumbing sections. While there may be some other areas which Petitioner could have subcontracted to other forces, these other areas were within the general "roofing" scope of work and better able to be performed by Petitioner. The pool of approved M/WBE subcontractors which Petitioner had available to choose from in order to meet the minority participation requirements was therefore severely restricted. Shortly after the bid opening, a representative of Petitioner met with the School Board's M/WBE Manager to demonstrate Cheesbro's good faith effort to achieve the M/WBE percentage participation goals. Petitioner explained the efforts which it had taken. These efforts were beyond the minimum required by the contract documents in order to obtain minority participation on the Project. However, the Assistant to the School Board's M/WBE Manager felt that Petitioner had not made a good faith effort and the Manager agreed and recommended to the School Board that it reject all bids and rebid the Project. This recommendation was based on the Manager's determination that petitioner should have actively solicited bids from M/WBE sub-contractors well beyond sending letters and the newspaper ads. On December 13, 1993, School Board furnished to Cheesbro a written notice of its intended decision to reject all bids. The basis of such intended decision was that no bidder had attained the MBE/WBE goals and that no bidder, including Cheesbro, had shown that it had made the good faith effort required by the MBE/WBE Rule. On December 14, 1993, School Board sustained the determination of the MBE/WBE Manager that a good faith effort was not shown by Cheesbro and rejected all bids as recommended by School Board's Superintendent of Schools. On December 27, 1993 Cheesbro filed a written Formal Protest, which is the subject of these proceedings. There is no evidence or claim that the MBE/WBE Manager, in determining that Cheesbro had failed to prove it made a good faith effort to obtain the goals, acted illegally, fraudulently or oppressively, in reaching her decision. However, the evidence shows that the determination was arbitrary and was not justified based on the proofs offered by Petitioner.
Recommendation Based on the foregoing findings of fact, it is RECOMMENDED that The School Board of Orange County enter a Final Order granting the relief requested by the Petitioner, Cheesbro Roofing Inc., and certifying that Petitioner is the lowest responsive bidder and enter into a contract with Cheesbro for the Project pursuant to the bid. DONE and ORDERED this 9th day of May, 1994, in Tallahassee, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of May, 1994. APPENDIX The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties. Proposed findings of fact submitted by Petitioner. Accepted in substance: paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 (in part), 23. Rejected as argument or conclusion of law: paragraph 22 (in part). Proposed findings of fact submitted by Respondent. Accepted in substance: paragraphs 1, 2, 3, 4, 5, 7, 8, 9, 10, 11 (in part), 12, 13, 14, 15, 16 (in part), 17 (in part). Rejected as argument or conlusion of law: paragraphs 6, 11 (in part), 19. Rejected as against the greater weight of evidence: paragraphs 16 (in part), 17 (in part), 18. COPIES FURNISHED: David K. Wittek, Esquire Wright, Fulford, Moorhead & Wittek, P.A. 145 N. Magnolia Avenue P. O. Box 2828 Orlando, Florida 32802 William M. Rowland, Jr., Esquire Broad and Cassel 390 N. Orange Avenue, Suite 1100 P. O. Box 4961 Orlando, Florida 32801 Dr. Donald Shaw Superintendent Orange County School Board P. O. Box 271 Orlando, Florida 32802-0271 Douglas L. "Tim" Jamerson Commissioner of Education The Capitol Tallahassee, Florida 32399-0400
