Findings Of Fact The Respondent, Department of Corrections, by advertisement in a Jackson County, Florida newspaper on March 27, March 30 and April 6, 1988, sought bids for the provision of office space for the Department's offices in Marianna. The bid specifications, including, as pertinent hereto; minimum square footage, a requirement that Energy Performance Index calculations and certification thereof by an architect or engineer be shown, and the requirement that all parking spaces be on site, was made available to potential bidders on March 28. A pre-proposal conference of potential bidders was held on March 31 to explain and clarify the specifications. Bids were submitted by the two Petitioners, and the bids were opened on April 14, 1988. On or about April 19 or 20, Wendell Beall and Robert Sandall evaluated the bid proposals and made a preliminary determination that the Rainbow bid was non-responsive in three areas. It was determined that the required square footage depicted on the Rainbow bid was inadequate; the parking provision was inadequate in that not enough "on-site" spaces were shown on the bid; and the Energy Performance Index calculations and certification by an architect or engineer was not supplied. On April 21, 1988, the lease committee, chaired by Thomas Young, met and reviewed both bid packages submitted by the Petitioners and affirmed Mr. Beall and Mr. Sandall's findings, with the result that the agency decided to award the contract to Brooks. The bid specifications required a minimum of 12,756 net square feet of rentable office space. Only 11,862 square feet could be identified as net rentable square footage on the Rainbow bid's floor plan, as calculated in compliance with the "standard method of space measurement." This square footage calculation was consistent with the actual measurements of the building made by Mr. Beall himself. The Brooks' bid depicted an adequate amount of square footage in compliance with the specifications. Mr. Beall calculated the net rentable interior square footage by utilizing the standard method of space measurement provided for in the rules of the Department of General Services and, after deducting nonusable, nonrentable space under that standard, rule mandated method, he arrived at the net rentable office space figure of 11,862 square feet. Rainbow at no time has presented any conflicting measurement or alleged any specific errors in Mr. Beall's calculations. Item A-10 of the bid specifications requires a floor plan to be submitted showing the present configurations of the building, with measurements that equate to the required net rentable square footage. This means that the minimum square footage must be shown in the floor plan attached and submitted with the bid specifications, even if the building may contain more square footage. The Department supplied a specific number of offices of various sizes and a required configuration no floor plan in order to depict work units that should be constructed and/or arranged together, as part of the specifications in the Invitation to Bid documents. The purpose of this agency floor plan was to give potential bidders a guide to calculate the cost of remodeling existing space to meet the agency's needs so that those potential bidders could amortize that cost as part of the rental amount involved. Therefore, the proposed floor plan included in a bidder's package should not vary substantially from the final plan used to actually remodel the leased space in accordance with the agency's requirements. Accordingly, the only submittal of plans which is permissible subsequent to the bid opening, as contemplated by the bid specifications, are the final plans developed by a successful bidder in consultation with the agency after the bid award. No floor plan may be unilaterally submitted by a bidder after the bid opening since that would constitute an illegal amendment of the bid. Only a floor plan done in consultation with the agency in order to make final adjustments so that all office space and other related space will comply with the agency's precise requirements may be done after the bid is actually awarded, and this must be based upon the floor plan originally submitted in the bid itself in conformance with the bid specifications regarding office layout, square footage and the like. The Rainbow bid simply contained an inadequate amount of square footage necessary to be a responsive bid in this regard. An additional bid specification at issue concerns the requirement of 77 exclusive use, on-site parking spaces. The Rainbow bid only made provision for 27 on-site exclusive parking spaces, with the remaining 50 spaces of the required 77 being off the proposed building site, approximately 155 feet away, without sidewalk access to the proposed office building. The Brooks' bid incorporated all required parking spaces on the site, as required by the specifications. The Rainbow bid was non-responsive concerning the parking space specification as well. Mr. Beall prepared the bidding documents as Budget Manager for the Department of Corrections' Region I. He was the person designated in the bidding documents to answer any questions requiring clarification by prospective bidders before bids were prepared and submitted. Mr. Beall established that the intent of the agency with regard to this parking space requirement was to require all 77 parking spaces to be on-site. No bidder or prospective bidder asked any questions of Mr. Beall concerning this specification prior to the submittal of any of the bids. Mr. Brooks, however, did consult with Mr. Beall on the question of the Energy Performance Index specification item before he submitted his bid. Mr. Brooks is a former physics and advanced mathematics teacher with some 20 years experience in construction. He has been a licensed general contractor and master builder for residential, commercial and industrial types of construction for 11 years. He typically designs and draws his own plans, including those submitted with the bid at issue. He spent approximately 100 hours of his time on preparation of this bid. Mr. Brooks had previously been awarded a rid by the Department of Corrections on which he simply invalid the item concerning the Energy Performance Index (EPI) specification. That item was found to be responsive by the Department, and the bid was awarded to Mr. Brooks. On a subsequent bid on a different job, Mr. Brooks again merely initialed the EPI specification, which he intended to mean that he would perform the job at issue such that the EPI requirements would be met. He was not awarded the bid on that particular job, but upon his informally notifying the Department of Corrections that he might protest the decision to award the bid to a different bidder, the Department personnel advised him that they might choose to raise the issue of his responsiveness to the EPI specification in that situation. With this history in mind, Mr. Brooks, before submitting his bid, contacted Mr. Beall to inquire as to what would be considered an appropriate response to the EPI specification on the bidding documents. The EPI has been calculated by Mr. Brooks on numerous projects in the past, and he is capable of calculating it as to this project. He found, however, that it would be impossible to calculate a precise and accurate EPI specification response, because he would not have the final floor plan from which to calculate it, with all the information that would give him concerning room configurations, size, location and size of windows, size and type of heating and air-conditioning equipment and many other factors. Mr. Brooks could, however, give his certification that the energy performance requirement would be met, once the final plans were completed in conjunction with discussion with the agency after award of the bid, which comports with standard agency policy and practice. Because he was concerned that any energy performance calculations he might supply would not necessarily be accurate in the final analysis, in relation to the final "to be constructed" plans, Mr. Brooks contacted Mr. Beall to obtain his guidance about what would be considered a proper response to this specification item. Mr. Beall advised him that a letter certifying that he would comply with the specification as to this issue would be an appropriate alternative to simply initialing the specification. The same opinion was also voiced at the lease committee meeting. Mr. Beall's advice to Mr. Brooks in this regard was based upon advice given him by Mr. Edwin Johnson of the Department of General Services and was based upon past agency policy concerning treatment of this issue on previous bids considered by the lease committee. Previous bids had indeed been accepted in the form submitted by Mr. Brooks and had not been found to be nonresponsive as to the EPI issue. Thus, Mr. Brooks, in addition to initialing the specification concerning the EPI, also supplied the referenced letter certifying that he would comply with that specification and agency requirement. Rainbow, on the other hand, merely initialed that item in the specification and bidding document. Thus, the Brooks' bid is the more responsive on the issue of the EPI than the Rainbow bid. The bid award to Brooks was posted on May 2, and on May 4, Rainbow filed a Notice of Protest of she award which was received by the Department, timely on May 5. Shortly after that date, counsel for Rainbow requested that the Department's representatives and counsel meet with him and Mr. Jett, his client, of Rainbow Properties, to discuss the agency's award to Brooks and rejection of Rainbow's bid. On May 10, 1988, the Department's regional representatives and its counsel met with Mr. Jett of Rainbow Properties and his attorney, Mr. Barley. Mr. Jett used this opportunity to explain how he felt that the Rainbow bid had complied with the bid specifications in the three specific areas discussed above. The Department's counsel explained on that occasion that the bid could not be amended after opening and posting of the bids. Mr. Jett's bid had only shown 11,862 square feet identifiable as rentable space in the floor plan submitted with the bid, although 12,756 square feet were required by the bid specifications. Additionally, as discussed above, of the 77 required on-site parking spaces, only 27 were provided on site with 50 of them being off site, with Rainbow not establishing that it had ownership or right of control to the off site spaces. Additionally, as discussed above, there was the problem of no calculations or assurances being provided regarding the EPI specification, it merely having been initialed in Rainbow's bid submittal. At the May 10 meeting, Mr. Jett was given the opportunity to explain how his bid complied with the specifications at issue and to discuss how he felt the Department had misinterpreted his response or made an error in measuring or calculating the square footage available in his building. He provided no alternative calculations or measurements of the building, however, which would depict more than the 11,862 square feet measured by the Department's staff or which would show that measurement was incorrect. He was reminded that the only possible information he could legally provide the agency after the opening of bids was in the nature of minor clarification concerning how he had calculated the square footage. He was instructed that he could not revise his plans in order to establish that more square footage was available because that would be an illegal amendment of his bid after the bids were open and posted. At the May 10 meeting Mr. Jett also maintained that the Department had allowed for other than on site parking; however, but the bidding document or Invitation to Bid only contained one blank, and only one subsection on the bidding form, for the bidders to indicate 77 spaces designated as on site spaces. Mr. Jett maintained that since the Department had provided option "(A)" under this on-site parking specification item, that he was therefore free to add other options. Using that logic, however, it would also appear that he could have submitted a bid depicting spaces literally on the other side of town and still had a responsive bid. That clearly is not the correct interpretation of that specification. He also maintained that the EPI was impossible to calculate at the time of bidding, in view of the fact that final plans were not available to support the ultimate calculation. In any event, at the conclusion of this meeting, Department personnel informed Mr. Jett and his counsel that would inform him of its decision within a few days. The Department did not inform Mr. Jett that he would be permitted to amend his bid after obtaining professional help and redrawing his blueprint in an effort to show that the minimum square footage was available. Indeed, Rainbow and Mr. Jett did obtain the services of an architect and drew a new floor plan which it offered as PR-1 at the hearing. If the floor plan originally attached to Rainbow's bid, consisting of Exhibit PR-2 in evidence, is compared with the blueprint submitted by the architect after the meeting with the Department representatives on May 10, it can be discerned that the blueprint is not a mere refinement or clarification of the initial floor plan, but rather that major modifications have been made to the initial floor plan submitted with the bid. These consist of walls which have been moved, small rooms in some areas which have been eliminated, restrooms which have been deleted and an existing spiral staircase area which was eliminated, and a hallway enclosed, in order to add additional rentable square footage where new offices could be added. Thus, this blueprint offered at hearing was not a mere refinement or clarification of the original floor plan submitted with the Rainbow bid, but rather sufficiently different from original floor plan as to constitute a material amendment or modification to the bid. It therefore cannot be considered. The floor plan submitted with the bid was nonconforming to the bid specifications as to the square footage item and Rainbow cannot be permitted to rectify and correct that with the architect's new blueprint and floor plan offered at the time of the hearing. 1/ In short, insufficient square footage was depicted and that is not a minor waivable irregularity. Soon after this May 10 meeting, the Department changed its position, decided that both bids were not responsive and rejected them. Its alleged basis for doing so was that the Brooks bid was nonresponsive as to the energy performance index criteria and that the Rainbow bid was nonresponsive as to that criteria, as well as to those concerning minimum square footage and on-site parking availability; the same as the original grounds for rejecting Rainbow's bid. Timely formal protests of that second agency action were filed by both Brooks and Rainbow. In that connection, Rainbow's formal written protest of the original award to Brooks, which was announced and noticed on May 2, 1988, was untimely. The formal written protest must be filed within ten days of the notice of protest. Rainbow's original notice of protest was filed with the agency on May 5 and the formal written protest was not filed until May 17. Rainbow, in conjunction with its filing, filed a motion for leave to late-file the formal protest with the agency on the basis that it had mistakenly filed the formal protest with the Division of Administrative Hearings. That petition was filed with the Division on May 16th. The deadline for filing the formal protest was May 15th. Petitioner Rainbow, however, did not learn of the second intended agency action until May 16th, however, and may have been somewhat misled about the necessity of filing its formal protest by May 15th because of the informal discussion of May 10th. It is also true, however, that the informal meeting was improper, as discussed herein and was called at the behest of Rainbow without assurance that the filing time was tolled.
Recommendation In consideration of the above findings of fact and evidence of record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is, therefor RECOMMENDED that the petition of Rainbow Properties, a Florida general partnership, should be denied and dismissed for the reasons found and concluded above, and that the petition of C. Leon Brooks be GRANTED and that the subject bid be awarded to C. Leon Brooks. DONE and ENTERED this 27th day of October, 1988, in Tallahassee, Florida. P. MICHAEL RUFF 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 27th day of October, 1988.
Findings Of Fact On October 26, 1976, the School Board of Orange County and ITEL Data Product Corporation (ITEL) entered into a lease agreement providing for the lease of data processing equipment to the Board from ITEL by which ITEL supplied a computer central processing unit (CPU) and related equipment. Concomitantly, by agreement, ITEL provided for servicing and maintenance of the equipment. In October, 1977, IBM announced its new 303X series of computers with delivery schedules to customers for the newly introduced equipment to take up to two years. IBM has had a long-standing policy, well-known in the data processing industry, of filling customer orders for equipment in the sequence in which they are received, called "sequential delivery." With public agency customers, such sequential orders are not envisioned by the agency nor IBM to be a firm order because of the often protracted procurement process, involving competitive bidding, that public bodies typically have to engage in before making such a major purchase. IBM therefore permits public agencies, such as the School Board in this case, to place non-binding orders in anticipation of a future procurement so that a sequential delivery position will be available to the public agency and thus cause no delay in acquisition of the equipment should IBM become the successful bidder upon a particular procurement. On October 6, 1977, the School Board placed a "reservation" for an IBM 3031 CPU and related data processing equipment. In a letter of October 11, 1978, the School Board informed IBM that this equipment would be needed in approximately November, 1979, subject to availability of funds and subject to IBM being selected as a winning vendor in a competitive bidding process. There was no executed contract or other commitment between IBM and School Board at this point in time. Sometime in the summer of 1979, the School Board, which had become dissatisfied with the service and maintenance it had received from ITEL pursuant to the ITEL lease, engaged certain members of its staff in a study regarding its future data processing equipment needs. The School Board staff study resulted in a determination by the staff, and ultimately by the Board, to acquire additional data processing equipment capacity in excess of the capacity supplied under the ITEL lease. On August 28, 1979, the School Board terminated the ITEL lease effective December 31, 1979, and on or about September 5th, notified ITEL of that termination. On or about October 2, 1979, after determining that it wished to lease new and greater capacity equipment, the School Board Issued an "Invitation to bid" to eleven vendors, providing for the leasing, with option to purchase, of an IBM 3031 CPU and related equipment "or their equal." In response to this invitation to bid, ITEL, Menrex Corporation, as well as IBM, submitted bids and on November 13, 1979, the School Board rejected all the bids as being not responsive, as it had reserved the right to do in the invitation to bid document. The rejection of these bids on November 13, 1979, provided only slightly over a month during which the School Board would have to acquire equipment by rental or purchase and have it installed, since the ITEL lease would be terminated on December 31, 1979. Accordingly, acting on the advice of counsel, the School Board determined that it could legitimately develop an interim emergency leasing plan for meeting its data processing needs upon the expiration of the ITEL lease starting December 31, 1979. This leased equipment was expected to be in place for approximately three to six months or until such time as a new bidding effort and procedure could be developed. The School Board, upon advice of counsel, determined that under its procurement regulations, it could rent equipment on a month to month basis without engaging in a competitive bidding process if it solicited quotations from at least three vendors. Thus, on November 13, 1979, the School Board solicited quotations from three potential vendors, Comdisco, ITEL and IBM, for purposes of securing an interim rental of an IBM 3031 CPU, "or equal", and related equipment. IBM and the Petitioner herein, NAS, which is the successor in interest to ITEL, responded to the solicitation of quotations and NAS informed the Board that it could not supply the particular equipment specified, but offered a NAS CPU at a monthly charge and suggested other related equipment to the Board that NAS considered to be suitable. The School Board staff informed NAS that the CPU unit itself would be a suitable alternative to the IBM 3031 CPU mentioned in the solicitation of quotations. On November 20, 1979, the School Board elected to select IBM's quotation and entered into the lease arrangement with IBM on a month-to-month rental basis. NAS did not challenge that action by the School Board. This rental agreement was entered into on or about December 7, 1979. It was a standard IBM lease and contained a provision whereby IBM offered the customer an option to purchase the equipment, although there was no obligation imposed therein on the customer to purchase the equipment, which was the subject of the lease. The agreement provided that the customer would be contractually entitled to certain "purchase-option credits" or accruals if it was leasing the equipment on a long-term basis and subsequently elected to exercise the option to purchase that same equipment. IBM grants such purchase-option credits as a general rule in month-to-month rental situations such as this, although they are not always a matter of contractual right on behalf of the customer. In any event, no consideration was shown to have been given at the time of entering this rental agreement to the existence or non-existence of any purchase-option credit provision since the only authorized contract at that time was a month-to- month rental agreement. No purchase or option to purchase which would be binding on either party was contemplated since both IBM and the School Board were aware that before a purchase of this magnitude could be made, that a competitive bidding procedure must be utilized. Equipment was installed pursuant to the rental agreement in December, 1979. Neither at the time of the contracting, nor at the time of the installation of the IBM 3031 CPU, did NAS or Comdisco challenge the award of the month-to-month rental contract to IBM. In early 1980, the rental agreement being only temporary, the School Board began studying various alternatives for making a permanent acquisition of needed data processing equipment. In early May of 1980, upon advice of its attorney and various staff members assigned to study the matter, the School Board determined that it would be more economical for the School Board to purchase a CPU and related equipment and service either by cash or installment payment, than to continue renting a CPU and related equipment or to lease those items with an option to purchase as had originally been contemplated in the October, 1979, aborted procurement effort. Thus, it was that on about April 20, 1980, the School Board appointed a committee of five persons to help draft technical specifications to ultimately be promulgated in bidding invitation documents with a view toward acquiring the required data processing equipment through competitive bidding and ultimate purchase. The committee included School Board employees and outside consultants with knowledge of the field of data processing. The members were: Louis Nall, Education Consultant with the Florida Department of Education; Kim Anderson, Information Systems Consultant with the Florida Department of Education; David Andrews, Coordinator, Systems Support, School Board; Mike Staggs, Coordinator, Operations for the School Board; and Craig Rinehart, Director of the Systems Development/Systems Support staff of the School Board. Upon this committee agreeing upon required specifications for the equipment to be acquired, the bidding documents or "invitation to bid" and related supporting documents were developed by the committee in conjunction with assistance of certain other members of the staff of the Board as well as the School Board's attorney. The bid documents were approved by the School Board on May 27, 1980, and they were issued on May 23, 1980, to eight potential vendors, including NAS, IBM, and Amdahl Corporation. The bid documents invited bids for the sale of an IBM 3031 CPU and related equipment "or their equal" (plus service and maintenance) for delivery no later than July 15, 1980. In addition to specifying an IBM 3031 CPU and related equipment "or their equal.," the pertinent specifications contained in the invitation to bid documents provided as follows: The manufacturer of the equipment described in the bid was required to currently manufacture it and offer for sale or lease along with it, an upgradable attached word processor subsystem the same as, or equal to, the IBM 3031 "attached pro- cessor." The Central Processing Unit, or CPU, being bid had to be capable of hosting or accommodating an attached processor. (The purpose of requiring this was so that the School Board could later ob- tain more processing capability if and when it needed it, rather than having to pay for more capacity than it needed at the time of the initial purchase. The vendors were not required by the bidding documents, however, to bid at the time of this procurement for the actual sale of such an attached processor, to be added later.) The School Board reserved the right to reject any and all bids and to waive any informal- ity in any bid. The bid documents initially stated that the School Board would not pay any separately stated interest or finance charges in arriving at its total purchase price for all equipment to be bid. Each bidder was required to offer a certain number of support or maintenance personnel in the Orlando area at the time the bid was submitted and the Board would enter into a separate service and maintenance agreement with the successful vendor. NAS did not protest the bid specifications contained in the invitation to bid documents. NAS did request and receive several interpretations and clarifications of the bid documents from the Board in a manner favorable to NAS. These favorable clarifications or interpretations were as follows: The unavailability of serial numbers for data processing equipment at the time the bid was prepared would not adversely affect the bid's validity. NAS could temporarily rent equipment from other manufacturers which it could not itself deliver by the July 15, 1980, date required in the bid documents. (emphasis supplied) NAS would be deemed by the Board to comply with the requirement that support personnel be present in the Orlando area, provided it had the required support personnel in the area at the time the equipment was actually delivered, rather than at the originally stated time of submission of the bid. The NAS 7000N CPU, which was a computer of greater capacity than the IBM 3031, even after the IBM had the attached processor added, was specifically determined by the Board to be con- sidered as equivalent to the IBM 3031 and thus ap- propiately responsive to that specification and the invitation to bid documents. NAS would be deemed by the Board to comply with the term "manufacturer" even though NAS did not in itself manufacture the equipment, but only marketed it for the maker, Hitachi Corporation. IBM also had a role in determining and securing clarifications or interpretations of the specifications in the invitation to bid from the School Board. Thus, it was that IBM suggested that the Board could save money if it allowed each vendor (not just IBM) to separately state an interest or finance charge in its bid, since IBM was of the opinion that the Internal Revenue Service would not tax as ordinary income to the vendor any separately stated interest charges or financing charges received by such vendor from a public governmental body such as the School Board. Thus, to the extent that vendors could save on income taxes from the total payment, if successful, then the School Board could reasonably expect all vendors to submit correspondingly lower bids in response to the invitation to bid. In response to IBM's request, the School Board amended the bid documents to allow a "separately stated time-price differential" for any item of equipment, not to exceed seven and one-half percent of that item of equipment. At NAS' request, the School Board also amended the bid documents to state that a single central processor (the NAS 7000N), with equivalent power to the IBM 3031 CPU, which was upgradable in the field, would be an acceptable alternative to the requirement that a separate processor must be capable of being attached to the CPU in order to increase data processing capacity. In fact, the NAS 7000N actually has somewhat greater data processing capacity than the IBM 3031. A further amendment to the bid documents provided that in determining the lowest and best bid, the Board would consider each vendor's total charges for service, maintenance and support of the equipment for a one- year period following the award of bids. Additionally, at the request of IBM, an amendment was approved to the bid documents stating that instead of seeking equipment "new and not refurbished," that that requirement would be changed to "new and not refurbished or not more than one-year old." These amendments were sent to all potential bidders. Prior to disseminating the May, 1980, invitation to bid documents, the School Board established an Evaluation Committee to review and analyze bids to be received in response to those documents. The Committee was composed of the following individuals: David Brittain, the Director of the Educational Technology Section, Florida Department of Education; William Branch, Director of Computer Service, University of Central Florida; Louis Nall, Education Consultant, Florida Department of Education; Ronald Schoenau, Director of Northeast Regional Data Center, Florida University System; Craig Rinehart, Director of Systems Development/Systems Support of the Orange County School Board; Mike Staggs, Coordinator, Operations of the School Board; David Andrews, Coordinator, Systems Support, School Board; Dale Brushwood, Director of Production Control, School Board; and David Brown, Attorney for the School Board. The Evaluation Committee was charged with conducting a review and analysis in accord with certain instructions given by the Board and to recommend to the Board the bid the Committee believed was the lowest and best bid. The Committee was instructed that objectivity is of prime importance. Five vendors submitted bids in response to the Invitation documents, as amended. They were NAS, IBM, Amdahl, CMI and Memorex. On June 17, 1980, the bids were opened by the Board. On a recommendation of the Evaluation Committee, the School Board found the bids submitted by CMI and Memorex to be not responsive to the bid documents. The bids submitted by NAS, IBM and Amdahl Corporation were found responsive to the bid document. The Evaluation Committee met for approximately 5 hours evaluating the bids by a number of different criteria, including the consideration of both a one-year and a three-year maintenance cost, as well as an assumption arguendo that the bid documents did not merely call for the IBM 3031 CPU upgradable by the addition of an attached processor, as the specifications actually requested, but instead that the $330,000 (estimated) attached processor was to be bought at the outset from IBM. The result was that the Evaluation Committee reported that the IBM bid was the lowest and best response, even if the cost of a $330,000 attached processor was added to their bid, which was not actually to be the case because the attached processor was not included in this procurement process. Even had that been added to the IBM bid, making it the second lowest dollar bidder, the Evaluation Committee still felt it to be the lowest, best bid. The IBM bid for the 3031 CPU and related equipment was $1,412,643 plus a time-price differential of $58,738 for a total of $1,471,381. The related bid for service, maintenance and support for the first year was $74,201.34, making a grand total for IBM's bid of $1,545,582.34. The NAS bid for the sale of an NAS 7000N CPU and related equipment was the next lowest bid at $1,575,751 plus a time-price differential of $74,722 for a total of $1,650,473. The accompanying bid for service, maintenance and support for the first year was $64,603. The total of the NAS bid was thus $1,715,076. The Amdahl Corporation's bid was higher than either IBM or NAS. In evaluating and in arriving at the decision that the IBM bid was the lowest and best, the Evaluation Committee was concerned with the previous poor record of maintenance and support provided by NAS's predecessor in interest, ITEL Corporation, as well as by the fact that there were then no NAS 7000N computer systems installed in the United States, so that some knowledge of its performance record could thus be gained. Further, the residual value for NAS' equipment had not yet been proven to the extent that IBM's had. Thus, the Committee determined that the IBM bid would still be the lowest and best even had the attached processor, at an estimated cost at time of $330,000, been added to the bid, making it the second lowest in dollar terms because the IBM bid combined the least risk, with the maximum equipment capacity growth flexibility at maximum benefit to the School Board in terms of financial flexibility. The NAS machine would provide more capacity than the Board needed for several years at higher cost, without the Board having an option regarding when that extra capacity should be obtained. The financial flexibility benefit of the IBM bid in terms of allowing for future capacity growth was borne out because the attached processor, by the time it was actually acquired from IBM in 1982, only cost $172,000, due to price decreases made possible by technological advances. The Evaluation Committee unanimously recommended acceptance of the IBM bid as the lowest and best received, and in official session on June 24, 1980, after hearing presentations by an NAS representative, the School Board unanimously voted to award IBM the contract for the subject equipment. On July 1, 1980, the contract submitted by IBM was executed by IBM and the School Board. It provided for a purchase by the Board of the equipment and services described above, payable in two installments, $600,000 on or before August 15, 1980, and the balance on or before July 5, 1981. On July 16, 1980, NAS filed a petition for administrative hearing with the Board, also filing an emergency motion for stay with the School Board, seeking a stay of all further agency action on the contracts with IBM, including any payment, pending disposition of the case. On July 29, 1980, the School Board, after hearing argument of NAS counsel, denied that petition for Administrative Hearing and motion for stay on the basis that the contract between the Board and IBM had already been executed and that the NAS request for a 120.57(1), Florida Statutes, hearing was not timely. On August 4, 1980, NAS appealed the Board's decision to deny a hearing to the Fifth District Court of Appeal and also filed an emergency motion for stay pending appeal. The emergency motion requested the court to prohibit any further action pursuant to the contract, including payment of any sums pending determination of the issues raised in the appeal. On August 15, 1980, the court granted the emergency motion for stay on the condition NAS post a supersedes bond on or before August 18, 1980. On August 26, 1980, the court vacated that order because of failure to timely post the supersedes bond. The School Board then paid IBM the first installment payment of $600,000, when due, shortly thereafter. On May 6, 1981 the Fifth District Court of Appeal ultimately rendered a decision that NAS ". . . should have an opportunity to present evidence and arguments, pursuant to Section 120.57(1)(b)4, Florida Statutes, (Supp. 1980), that its bid was the lowest and best response to the bid document." Thus, the case was remanded to the Board to conduct an administrative hearing, and the Board referred the matter to the Division of Administrative Hearings. On June 4, 1981, NAS filed with the Board a motion for stay to prevent the Board from making the final payment to IBM on the purchase price. After hearing arguments of NAS' attorney, the Board, on June 23, 1981, denied the motion for stay and NAS appealed. On July 3, 1981, the Fifth District Court of Appeal affirmed the School Board's denial of the stay. Final payment was thereafter made by the Board to IBM, thus completing the purchase and all performance of the contract.
Recommendation Having considered the foregoing Findings of Fact, Conclusions of Law, the evidence in the record, the candor and demeanor of the witnesses and the pleadings and arguments of the parties, it is RECOMMENDED: That a final order be entered by the School Board of Orange County denying the relief requested by the Petitioner. DONE and ENTERED this 22nd day of September, 1983, in Tallahassee, Florida. P. MICHAEL RUFF, Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of September, 1983. COPIES FURNISHED: John A. Barley, Esquire 630 Lewis State Bank Building Post Office Box 10166 Tallahassee, Florida 32302 William M. Rowland, Esquire Post Office Box 305 Orlando, Florida 32802 Peter J. Winders, Esquire Nathaniel L. Doliner, Esquire Post Office Box 3239 Tampa, Florida 33601 Daniel E. O'Donnell, Esquire 400 Colony Square, Suite 1111 Atlanta, Georgia 30361 James L. Scott, Superintendent Orange County Public Schools Post Office Box 271 Orlando, Florida 32802
The Issue The issues are whether Respondent should reject Petitioner's bid as nonresponsive and award the bid to two other bidders.
Findings Of Fact Petitioner is a closely held Florida corporation licensed in the state as a mechanical contractor. Mr. John Smith is vice president and the sole shareholder of Petitioner. Respondent is a local school district in the state. Respondent regularly solicits bids for goods and services Respondent needs to construct, renovate, manage, and operate the public schools in Sarasota County, Florida (the District). On April 13, 2004, Respondent issued an invitation to bid identified in the record as No. 4134 (the ITB). The ITB solicited bids to provide HVAC and refrigeration maintenance and installation services to the District. On April 27, 2004, Respondent conducted a mandatory pre- bid meeting with vendors interested in bidding. Two of Petitioner's employees attended the meeting. Based upon discussions with attendees at the pre-bid meeting, Respondent issued an addendum to the ITB on April 29, 2004 (the Addendum), and required a signed copy of the Addendum to be included with each bid. Petitioner and others at the meeting subsequently submitted separate bids. Petitioner, along with six other prospective vendors, submitted a bid in response to the ITB. Petitioner did not include a signed Addendum in its bid. On May 25, 2004, Respondent posted its intent to award the bid to a primary vendor and to a secondary vendor, neither of which was Petitioner. Prior to the posting of the intent to award the bid, Respondent provided actual notice to Petitioner that Respondent deemed Petitioner's bid to be non-responsive for failure to include a signed Addendum. Petitioner filed a timely protest pursuant to Subsection 120.57(3)(b), Florida Statutes (2003). Respondent halted the contract award process until this protest is resolved as required in Subsection 120.57(3)(c), Florida Statutes (2003). Petitioner's position is that it in fact included a signed Addendum in its response to the ITB, or, alternatively, that the signed Addendum was not required to be included with the bid because either Respondent did not make Petitioner aware of the requirement; or the requirement for an signed Addendum was not material. Petitioner did not include a signed Addendum with its bid. Petitioner did not submit a copy of a signed Addendum for admission into evidence. Petitioner's vice-president personally compiled Petitioner's bid the night before Petitioner submitted the bid, sealed the bid, and left the sealed bid for a designated employee to deliver the bid to Respondent the following day. No one assisted the vice-president in sealing the bid. The designated employee delivered Petitioner's sealed bid to Respondent the next day. The bid remained sealed until Respondent opened the bid, along with all the other bids, at the bid opening. Respondent opened the sealed bids in accordance with Respondent's customary procedure for bid openings. All of the bidders attended the bid opening in the same room. One of Respondent's employees opened each sealed bid in front of the bidders and verbally relayed pertinent information from each bid to a second employee a few feet away who entered the information into an Excel spreadsheet on a computer. The information included the name, address, and contact information for each bidder; bid price information; and whether the bid included a signed Addendum. Respondent's two employees at the bid opening specifically recalled the announcement that Petitioner's bid did not include a signed Addendum. Members of the audience at the bid opening corroborated the testimony of Respondent's two employees. Their testimony was credible and persuasive. After Respondent opened the bids, the employee who had recorded the information in the spreadsheet reviewed each bid to verify the accuracy of the information in the spreadsheet. The employee maintained continuous possession of the bids in the room where she entered the information into the spreadsheet. A third employee for Respondent, not present at the bid opening, subsequently reviewed Petitioner's response and did not find a signed Addendum. The information in the copies of the spreadsheet in evidence shows that Petitioner's bid did not include a signed Addendum. Both the ITB and the Addendum state the requirement for each bidder to include a signed Addendum with the bid. The ITB states, in relevant part: . . . prior to submitting the bid, it shall be the sole responsibility of each bidder to contact the Purchasing Office at (941) 486- 2183 to determine if addenda were issued and, if so, to obtain such addenda for attachment to the bid. (emphasis in original). Similarly, the Addendum, states in relevant part: "PLEASE EXECUTE THIS FORM AND ENCLOSE IN THE SEALED ENVELOPE WITH YOUR BID RESPONSE." (emphasis in original). The requirement for a signed Addendum is a material requirement for a bid to be responsive. The information in the Addendum has a direct affect on the prices to be charged to Respondent by a vendor in terms of the hourly rates for services and the permissible costs that a bidder may pass through to Respondent. The information ensured the fairness of the ITB and assured the bids Respondent received were based on similar assumptions and methods of computation. The requirement for a signed Addendum assured that each bidder had read the Addendum. Respondent's proposed award of the bid to the two successful bidders is reasonable. The two bids are the two lowest priced bids.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that Respondent issue a final order dismissing the protest. DONE AND ENTERED this 27th day of August, 2004, in Tallahassee, Leon County, Florida. S DANIEL MANRY 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 27th day of August, 2004. COPIES FURNISHED: John R. Smith Hill York Service Corporation 2427 Porter Lake Drive, Suite 101 Sarasota, Florida 34240 Arthur S. Hardy, Esquire Matthews, Eastmoore, Hardy, Crauwels & Garcia, P.A. Post Office Box 49377 Sarasota, Florida 34230-6377 Dr. Gary W. Norris, Superintendent Sarasota County School Board 1960 Landings Boulevard Sarasota, Florida 34231-3304 Honorable Jim Horne Commissioner of Education Department of Education Turlington Building, Suite 1514 325 West Gaines Street Tallahassee, Florida 32399-0400 Daniel J. Woodring, General Counsel Department of Education 325 West Gaines Street, Room 1244 Tallahassee, Florida 32399-0400
Findings Of Fact The Department of Health and Rehabilitative Services currently leases approximately 22,000 square feet of space from Nelson P. Davis. The space is contained in two separate buildings, both located at 417 Racetrack Road, Ft. Walton Beach, Florida. The Department and Davis were involved in a legal dispute involving the currently leased premises, which concluded in 1986 with the entry of judgment in Davis' favor. While some antagonism remains between the parties related to the legal action instituted by Davis, Davis has been an acceptable landlord in all other respects. The current lease expires February 1, 1989. Davis has been aware, since late February or early March of 1988, that the Department would need space in excess of the currently occupied 22,000 square feet, but was not aware of the actual additional space requirements until the issuance of the invitation to bid. In general, the Department's space requirements have increased annually. In response to the anticipated need for additional space, Davis initiated plans for design of a third Racetrack Road building that could meet the additional need, but did not construct the facility. In response to the space requirements of previous years, Davis has constructed additional space. The Department has occupied the additional space in such proportions as to avoid the competitive bidding process, however, the current need for additional space exceeds the maximum which can be leased without competitive bidding. The Department on May 11, 1988, issued an invitation to Bid for approximately 26,165 square feet of space in Ft. Walton Beach, Florida. (HO #1) In response to the invitation, Davis submitted a bid proposal. The Davis proposal, the sole proposal received by the Department, was disqualified by the Department as non-responsive. On June 23, 1988, the sole bid was opened by Joseph Pastucha, HRS District One Facilities Manager, who initially reviewed the Davis bid. Mr. Pastucha identified items of concern related to the responsiveness of the bid and then provided the information to his supervisor, who in turn provided the information to Mr. James Peters. The Department did not contact Davis for further information or to provide the opportunity to correct any defects. James Peters, HRS's District One Manager for Administrative Services has expressed on at least one occasion a desire to avoid entering into business arrangements with Nelson P. Davis. The bases for Peters' opinion is the earlier litigation between the parties. Peters was on the committee which was to have evaluated bids submitted in response to the invitation. However, Peters has stated that his personal opinion would not influence his participation in the bid solicitation process. The evidence did not indicate that Peters based his opinion regarding the Davis bid submission solely on the earlier litigation or that any other person involved in the agency's action permitted personal opinions to affect the decisional process. Davis' bid proposal included the two buildings constituting approximately 22,000 square feet located at 417 Racetrack Road which the Department currently occupies, plus a third building of approximately 4,000 square feet. The proposed square footage and lease cost were acceptable. The third building was to be either a planned, unconstructed building located at the 417 Racetrack Road location or an existing building located "7/l0ths of a mile southeast of the present HRS offices," (the off-site building). However, a memorandum attached to Davis' submission stated that he did not intend to use the off-site building for HRS purposes, (HO #2). Further, Davis had previously indicated in conversation with the HRS manager of the 417 Racetrack Road offices that he planned to utilize the off-site space otherwise. On page one of the bid submittal form Davis indicated the address of the proposed location as 417 Racetrack Road. By letter dated July 5, 1988, the Department notified Davis that his bid offering was deemed non-responsive and that the Department expected to readvertise for space in Ft. Walton Beach. The letter made no mention of any opportunity to protest the determination. The statement, "[f]ailure to file a protest within the time prescribed in Section 120.53(5), Florida Statutes, shall constitute a waiver of proceedings under Chapter 120, Florida Statutes," which is required to be included in the notice of agency decision by Section 120.53(5)(a), Florida Statutes, was omitted by the Department. (HO #3) On or about July 7, 1988, Davis contacted the Department of General Services to express his dismay regarding the disqualification of his submittal. A meeting, held on or about July 19, 1988, between Davis and Department representatives, did not alter the Department's position. On or about July 25, 1988, the written notice of protest and request for hearing was filed. The Department forwarded the request to the Division of Administrative Hearings. The letter dated July 5, 1988, advising Davis that his bid was deemed non-responsive enumerated five reasons for the Department's decision. The reasons stated were: No photograph of the proposed facility was submitted as requested; No floor plan of the facility was submitted as requested; A substituted site was submitted Proposed space was not an existing building and was not measurable; Three buildings in bid proposal constitute three locations and are unacceptable. The letter was signed by Chuck Bates, DHRS Deputy District Administrator, District One. The letter was drafted by James Peters. (HO #3) Mr. Bates relied upon Peters and Pastucha to provide information sufficient to justify the disqualification of the bid, and was satisfied that the action was justified prior to signing the letter. Examination of the bid submittal package reveals that Davis failed to acknowledge by initial the requirements of page seven, but that he did, on that page, appropriately respond to questions related to proposed parking spaces being bid. The Department did not base the disqualification of the bid on the failure to acknowledge the page and did not include the failure to initial the page in the stated reasons for deeming the bid non-responsive. Paragraph 9(a) of the bid submittal form requires the submission of a clear photograph of the exterior front of the building. (HO #2) Davis submitted no photographs. Paragraph 9(b) of the bid submittal form requires the submission of a scaled floor plan showing present configurations with measurements. (HO #2) Davis submitted floor plans for the proposed-to-be-constructed building and for the off-site building, but failed to submit floor plans for the two buildings which the Department currently occupies. The bid also failed to include calculations of net rentable square footage related to the omitted floor plans. The letter to Davis stated that an additional reason for disqualification of his bid from further consideration was the submission of a substituted site, (HO #3). The "substituted site" refers to Davis' inclusion of the off-site building not identified in the bid submission other than by the statement that the building was located seven-tenths of a mile southeast of the present HRS office location. No map, street address, legal description, or other identifying information was submitted. The proposal submitted by Davis included plans to construct a third building at 417 Racetrack Road, which was rejected as not measurable. The invitation to bid states that to be considered, the space must be existing, dry and physically measurable, at the time of bid submitted. (HO #1) The proposed third building clearly fails to meet this requirement. While the Department may permit the correction of minor deficiencies, the deficiencies were adjudged by the Department to be more than minor. The proposal's inclusion of nonexisting space (Racetrack Road building #3) or in the alternative a building, the location of which can not be determined from the bid information and which the bidder apparently intends not to provide, is non- responsive to the specifications of the invitation. As to the fifth enumerated reason for disqualification of the bid (three buildings/three locations) the Department and Petitioner presented extensive testimony related to paragraph 3(b) of page 15 of the bid submittal form. Page 15 of the bid submittal form is titled "Evaluation Criteria" and contains a list of weighted factors which were to be used in the evaluation of bids. (HO #2) Paragraph 3(b) states, as one factor for consideration in evaluation, whether the bid provides for the required aggregate square footage in a single building, and continues, "[p]roposals will be considered, but fewer points given, which offer the aggregate square footage in not more than two locations provided the facilities are immediately adjacent to or within yards of each other." (HO #2) The space left for the specification of maximum yardage was erroneously left uncompleted by the Department and the Department did not learn of the error until the bid was submitted. The Department's disqualification of the bid on this basis relies on the Department's assertion that the three buildings included in the Davis proposal constitute three locations and that a responsive bid may contain not more than two locations. The Department's position is that "location" and "building" are synonymous and that paragraph 3(b) of the evaluation criteria prohibits consideration of a bid submission including more than two buildings. The Department's position is rejected as arbitrary. The bid package does not state that proposals including more than two buildings will be disqualified. The sole reference to the number of buildings in a responsive bid submission is as stated and contained on the page of "Evaluation Criteria", wherein it is identified with a weighting factor of five percent of total possible points.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED: That the Department of Health and Rehabilitative Services enter a Final Order dismissing Case No. 88-3868BID. DONE and ENTERED this 28th day of September, 1988, in Tallahassee, Florida. WILLIAM F. QUATTLEBAUM 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 28th day of September, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-3868BID The following constitute rulings on the proposed findings of fact submitted by the parties. Petitioner: Accepted in part. The use of the word "required in the fourth sentence is rejected. The referenced section relates to evaluation factors, not specific requirements. Accepted. Accepted in part. The third building was proposed as either the off-site building or the planned, non-existent space. Accepted. Accepted. Accepted. Rejected as restatement of testimony. Other testimony indicated that Petitioner planned to use the off-site location for non-HRS purposes. Rejected, immaterial. Accepted. Accepted. Accepted as modified. Accepted in part. The use of the word "technical" is rejected. Accepted. Accepted as modified. Accepted as modified. Accepted. Accepted. Accepted. Accepted as modified. Accepted as modified. Accepted as modified. The change between the two invitations to bid was to clarify the obvious confusion related to the use of terms "location" and "building" and was made not to the bid specifications but to evaluation criteria. Rejected as restatement of testimony. Rejected, conclusion of law. Accepted so far as relevant. While the Davis bid was disqualified as non-responsive, the right to reject any and all bids encompasses the disqualification of a bid as non-responsive to the specific requirements of an invitation to bid. Respondent: Rejected, conclusion of law. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Accepted. Rejected. Floor plan of the off-site building was submitted showing that the building is essentially a hollow, box-like structure. Accepted. Accepted. Accepted. Rejected, irrelevant. While the usual distance may be 100 yards, the actual bid specifications do not state such. Further the sole reference to the distance between "locations" was contained in evaluation criteria. At no time prior to the June 23, 1988 bid opening did the Department attempt to identify the preferred distance between locations. Accepted. Accepted. Accepted. COPIES FURNISHED: Bruce A. McDonald, Esquire Post Office Box 887, Suite 105 151 Mary Esther Cutoff Mary Esther, Florida 32569 Rodney M. Johnson, Esquire Acting District One Legal Counsel Post Office Box 8420 Pensacola, Florida 32505-8420 Joseph J. Pastucha 3300 North Pace Boulevard Room 109 Town & Country Plaza Pensacola, Florida 32505 Jan Kline 417 Racetrack Road Ft. Walton Beach, Florida 32548 James V. Peters Department of General Services 160 Governmental Center Fourth Floor, Room 412 Pensacola, Florida 32501 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory L. Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Tom Batchelor Staff Director House HRS Committee The Capitol Tallahassee, Florida 32399-1300
Findings Of Fact Introduction On March 12, 1987 respondent, Department of General Services (DGS), issued a thirty-page Invitation to Bid (ITB) inviting more than one hundred qualified arid interested vendors to submit proposals on Bid No. 339-360-240-F. According to the ITB, The purpose of this bid is to establish an annual contract for the purchase of carpet by all State of Florida agencies in the following counties: Franklin, Gadsden, Jefferson, Lafayette, Leon, Liberty, Madison, Taylor and Wakulla. It shall also be available to political subdivisions and State Universities in the aforementioned counties. It is anticipated that the contract will be effective July 1, 1987 through June 30, 1988. The job generally called for eight separate bids on eight different carpet products. Such bids were to be filed with DGS' Division of Purchasing no later than 2:00 p.m. on April 20, 1987. The ITB also noted that the bid tabulations would be posted on or about May 26, 1987. On April 14, 1987 DGS issued an Addendum to the ITB which changed the bid opening and posting dates to April 27 and June 8, 1987, respectively, and revised pages 4 and 27. The change on page 4 eliminated the requirement that a bidder certify his business had been in existence for at least two years and substituted in lieu thereof a requirement that the bidder certify he had at least two years experience in carpet installation. The change on page 27 modified the bidder certification form to conform with the change on page 4. In response to this offer, five vendors submitted timely bids. These included petitioner, Soly Interiors Division of Lyons Construction Company as agent for Wellco Carpet Corporation (Soly), The Carpet Shop, Inc. (The Carpet Shop), All Florida Contract Carpet (All Florida), Jones Floor Covering, Inc. and Gadsden Outlet. Soly submitted a composite bid containing a bid as to each of the eight products. On June 8, 1987 DGS posted its bid tabulations showing (a) the amounts of the bids of each of the five bidders on each product, (b) those bids that were rejected and the reasons for rejection, and (c) the lowest responsive bidder as to each product for which DGS intended to make an award. As to Soly, DGS concluded that, although Soly had submitted the lowest bid on products 2, 3, 7 and 8, it was disqualified because it "did not comply with special conditions, manufacturer's certification was not signed by manufacturer." Thereafter, petitioner timely filed a notice of protest challenging DGS' proposed agency action. The protest was in the form of a letter dated June 9, 1987 and stated that it was being filed pursuant to Subsection 120.53(5), Florida Statutes, and Rule 13A-1.006, Florida Administrative Code. As grounds for its protest, Soly asserted that it had substantially complied with all ITB requirements, that any irregularity was minor and could be waived, and that DGS erred by not using a "line item evaluation" in considering the various proposals. The filing of the protest prompted the instant proceeding. Soly later filed an amended petition on June 25, 1987 setting forth additional grounds, including assertions that DGS' reason for rejecting petitioner's bid was "pretextual," the specifications were "vague," "inappropriate notice" was provided, and it was in the "best interests" of the State to award the contract to Soly. The Bidder Soly is located at 2015 South Monroe Street, Tallahassee, Florida, and is a "division" (partner) of Lyons Construction Company. Soly has been in the retail carpet business in Tallahassee since 1983. However, its managing partner, William F. Sopher, has at least nine years experience in the carpet business. Soly has submitted bids on several state jobs during the past few years although none were successful. In each case, Soly's bid was rejected for valid reasons, including a failure to file an addendum and test samples with its bid proposals, and a failure to qualify as a minority business enterprise. Soly purchases its carpet from two sources: Cain & Bultman (C&B), which is the exclusive distributor of Wellco carpet in the State of Florida, and Wellco Carpet Corporation (Wellco), a carpet manufacturer in Calhoun, Georgia. Soly utilizes C&B whenever it needs guaranteed delivery within twenty- four hours. If time is not of the essence, Soly purchases the carpet directly from the manufacturer. Soly is not affiliated with Wellco except to the extent that it buys Wellco carpet for resale to its customers. Indeed, Wellco considers Soly to be a customer and not its agent. This was confirmed by a letter from Wellco's president to DGS and received in evidence as petitioner's exhibit 11. As a customer, Soly was not authorized to sign any documents on behalf of Wellco nor to submit a bid in Wellco's name. The Contract and what Had to be Supplied The ITB was a thirty-page document that, in addition to containing lengthy job specifications, included twenty-seven general conditions and nineteen special conditions. As is pertinent to this controversy, page 4 of the revised special conditions contained the following requirement: CREDITWORTHINESS Bidder shall be in financial position to accomplish the work specified. *The Carpet Manufacturer or Supplier shall certify on the attached sheet the bidder responding to this bid has an open account and has good credit standing.* (Emphasis added between *) To comply with this provision, a bidder was required to obtain the following certification from its carpet manufacturer or supplier: CARPET MANUFACTURER OR SUPPLIER CERTIFICATION I hereby certify that has a viable (Bidder Company Name) business, selling and installing carpet, has an open account and has good credit standing with our company. Supplier/Manufacturer Authorized Signature (Manual) Authorized Signature (Typed) Telephone: The certification could only be provided in the above form since general condition number 1 prohibited a vendor from satisfying the condition in any other manner, such as by an oral statement from a manufacturer's representative. Further, a bidder could not sign the statement on behalf of the manufacturer since it would be certifying its own credit standing with a third party. The creditworthiness of a bidder was important to DGS because, under the contract, large volumes of carpet (up to $450,000) would be purchased by state agencies, universities and other political subdivisions during the term of the contract. As a general rule, governmental entities do not pay vendors until up to thirty days after the product is installed or passes state inspection. At the same time, the successful bidder might have more than one job underway at the same time, or a second job before payment from the previous job was received. Because of this, a bidder would necessarily have to have a line of credit with the manufacturer or supplier in order to avoid cash flow problems or difficulty in obtaining the required product. Finally, if a bidder was allowed to procure a certification after the opening of the bids, the uncertified bidder could then use its low bid as an inducement to a manufacturer or supplier to establish a line of credit which it previously did not have. Paragraph 4.1 of the ITB's specifications contained the following relevant requirement: Bid Samples: All bidders shall deliver a minimum continuous piece of twelve (12) foot carpet width X 1-1/2 foot running length representative carpet sample for each commodity number (Ref. paragraph 1.2.1) of carpet being sold . . . *submitted bid samples which, when tested, fail to meet the specifications, shall be basis for rejection of the related bid.* * * * *Failure to deliver samples on or before the bid opening date will result in rejection of the bid.* (Emphasis added between *) This provision required a bidder to submit carpet samples for testing before the bids were opened. After, the successful bidder was selected, its samples were then sent to the Department of Agriculture and Consumer Services for testing to verify they met technical specifications. Finally, paragraph 9 of the ITB's general conditions authorized DGS "to reject any and all bids or waive any minor irregularity or technicality in bids received." In this regard, DGS does not consider the lack of a manufacturer or supplier certification to be a "minor irregularity" that can be waived. This is because of the importance the agency attaches to the certification. Pre-bid Conference A pre-bid conference was held on January 12, 1987 in Tallahassee, Florida. Notice of the conference was mailed to all vendors, including Soly, around December 17, 1986. Attached to the notice was a "specimen bid" which contained all specifications and conditions for the job. Vendors were invited to file with DGS by January 2, 1987 any questions concerning the specimen bid. In response to this offer, Soly hand delivered five written questions to the Division of Purchasing on December 30, 1986. None pertained to the manufacturer certification on page 4 of the ITB. Soly and several other vendors attended the pre- bid conference. In addition to answering all prefiled questions, DGS fielded other vendor questions, comments and suggestions. Several suggestions were eventually incorporated into the final ITB issued on March 12, 1987. Opening Day On April 27, 1987 DGS personnel opened the sealed bids. Victoria Chambers, a DGS purchasing specialist who had prepared the ITB special conditions, had the responsibility of initially reviewing the bids. She noted that petitioner's bid was submitted in the following name: "Soly Interiors Division of Lyons Construction Company as Agent for Wellco Carpet Corporation." She then noted that on page 27 of the package, Soly's partner, William F. Sopher, had signed the Bidder Certification attesting to his experience in installing carpet. On page 28, which is the Carpet Manufacturer or Supplier Certification, Sopher listed Wellco Carpet Corporation as the supplier/manufacturer and signed his name on the Authorized Signature line. Sopher had done so thinking that Soly was the supplier of the carpet. Although Chambers believed this certification was improper, she sought other advice before recommending that the bid be rejected. Soly's bid package was thereafter reviewed by two other DGS employees and DGS' legal counsel. All concluded that Soly should be disqualified since there was no valid manufacturer's certification. DGS then disqualified Soly on the following ground: Did not comply with Special Conditions - Manufacturer's Certification was not signed by manufacturer. No other bidder was disqualified for this reason. This information was placed on the Bid Tabulation posted by DGS on June 8, 1987. In disqualifying Soly, DGS acted in conformity with its practice of not accepting bids that did not comply with all general and special conditions. 2/ After the bids were opened, Sopher learned that his manufacturer's certification was not properly signed. Sopher then had the president of Wellco send a letter to DGS on May 5, 1987 advising that Soly Interiors was "a good customer of ours and purchase(s) carpet on an open line of credit, and at the present time are (sic) in good credit standing." However, this attempt to certify was too late and was not accepted by DGS. This was consistent with DGS' policy that no bid documents could be submitted after the opening of bids since to do so would prolong the bid process indefinitely, permit potential collusion among the bidders, and give an advantage to one bidder that the others did not enjoy. Alleged Improprieties At hearing, Sopher contended that the bid specifications on this and other carpet contracts had been drawn in favor of The Carpet, Shop. According to Sopher, prior specifications had called generally for Faculty II carpet, a type manufactured by Lee's, and distributed locally by The Carpet Shop. However, DGS structures its ITBs so that when it refers to a particular carpet grade, a vendor may supply an equivalent grade material and still meet specifications. There was no evidence that the specifications in this bid were drawn in favor of a particular vendor. Sopher contended that the manufacturer's certification was "vague" and was not discussed or clarified at the pre-bid conference. He also noted that the terms "manufacturer," "supplier" and "open account" were not defined in the specifications. However, Sopher acknowledged that, having been in the carpet business for nine years, he knew the difference between a supplier and a retailer and what the term "open account" meant in the business. Further, even though Sopher had the opportunity to seek clarification of these terms at the pre-bid conference, he elected not to do so. Sopher also contended that the certification itself was of no value since it had no impact on price and DGS did not require any other financial information from the bidder. However, the more persuasive evidence is that a properly executed certification is in the agency's best interests since it provided DGS with assurance that the vendor could supply the product. It was suggested by Sopher that the Addendum was issued solely at the request of All Florida in order for that vendor to qualify. The record reflects that a representative of All Florida contacted a DGS purchasing specialist concerning the change on page 4 of the ITB. However, at least two other vendors contacted DGS concerning the same matter. The Addendum was thereafter issued to require only that the bidder (but not his business entity) have at least two years experience in the carpet business. The purpose in the change was to eliminate a requirement that might disqualify an otherwise experienced individual who had a newly formed business. Contrary to petitioner's assertion, the change was not made to benefit only All Florida. Soly complained that it was not contacted about the defective certification when the bids were opened. However, DGS does not allow a bidder to correct a deficiency once the bidding process reaches this stage. Hence, there would have been no purpose in advising Soly that its bid was defective. Lastly, Soly contended that DGS personnel were biased against him in favor of another vendor, and that it was in the "best interests" of the State to award Soly the contract. Although it is true that Sopher contacted a number of DGS personnel prior to the submission of his bid, and had various meetings with DGS employees, there is no evidence that any of these contacts or meetings engendered animosity against Soly or resulted in discernible bias during the bidding process. Finally, the evidence reflects that it is not always in the best interests of the state to award a contract to the lowest bidder, particularly where an important condition has not been satisfied. Products 2, 3, 7 and 8 Soly submitted the lowest dollar bids on products 2, 3, 7 and 8. Except for a lack of certification, Soly would have received the contract on product 2. As to product 3, DGS rejected all bids. According to the bid tabulation, this action was taken since two vendors did not submit bids on the product, the samples of two others failed testing for total weight and Soly did not have a manufacturer's certification. As to products 7 and 8, Soly has conceded that its product did not meet specifications and that its bid was accordingly nonresponsive. Therefore, even if the certification requirement could be waived, Soly would not qualify for an award of the contract on these two products.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a Final Order be entered rejecting the bid of petitioner as being nonresponsive. DONE AND ORDERED this 7th day of January, 1988, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 7th day of January, 1988.
The Issue Whether Respondent was justified in cancelling the award of bid of HRS Lease No. 590:2054 to Petitioner, BOOZER, on the basis that it was nonresponsive. Whether Respondent acted fraudulently, arbitrarily, illegally or dishonestly in issuing an award of HRS Lease No. 590:2054 to Intervenor rather than to Petitioners or some other bidder.
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: HRS caused an invitation to bid to be advertised regarding Lease No. 590:2054 on January 3, 1989 and January 10, 1989. The Invitation to Bid required that all bids be received on or before 2:30 p.m. February 1, 1989, for 9,168 net rentable square feet, plus or minus 3%, of existing office space. A pre- bid meeting was scheduled for January 11, 1989. The advertisement also advise that the bid specifications could be obtained from the Orlando Regional Office of HRS, and that the State of Florida reserved the right to reject any and all bids. The material provisions of the bid specifications at issue in this proceeding are: The space be made available on September 1, 1989 or within 175 days after bid is finalized. The proposed space must be in an "existing building", which was: defined to mean "dry and capable of being physically measured to determine net rentable square footage at the time of bid submittal". The bidder provide 2 clear photographs of the exterior front of the proposed facility and 2 scaled (1/8 inch or 1/4 inch 1 foot preferred) floor plan showing present configurations with measurements that equate to the net rentable square footage (HRS Exh. 1, General Specifications Requirement No. 10(a)) Emphasis in original). Building(s) in not more than 2 locations provided the facilities are immediately adjacent to or within 100 yards of each other. Prior to the pre-bid conference, but after the initial publication of the bid invitation, representatives of NOTTUS contacted Ernie Wilson, the facilities services manager for District 7, HRS, to inquire regarding the propriety of submitting a bid for space in two buildings in which HRS presently had facilities, together with a facility that was greater than 100 yards from the existing facilities. At the time of the inquiry, NOTTUS was leasing facilities to HRS at its Lipscomb facility in Palm Bay, Florida. A portion of the square footage that NOTTUS inquired about leasing to HRS was the remaining square footage in two buildings that HRS partially occupied at that time. All of the premises submitted by NOTTUS under its bid package were located in the Woodlake PUD, which is all under single ownership. A representative from HRS advised the representative from NOTTUS that: the issue regarding the proximity of the locations would not be addressed as a bid specification, but rather, that would be a matter to be weighed by the evaluation committee in analyzing the bids. the bid proposal to be submitted would actually be for two locations as a portion of the space offered by NOTTUS was to be located in buildings in which HRS presently maintained facilities. The submittal of the bid package regarding the premises subject to occupancy by HRS, as ultimately submitted by NOTTUS, would definitely not disqualify the bid submittal. Mr. Wilson also received telephone calls from BOOZER and a third bidder making inquires regarding the bid package. The Pre-bid conference was held on January 11, 1989. No objections or questions regarding the bid specifications as to be utilization or definition of the terms "existing building" and "present configuration" were raised at that time. At no time prior to the submission of the bids were any objections or questions raised by BOOZER regarding the utilization of the term "existing building" or the term "present configuration" as those terms were defined within the bid specification. Each of the Petitioners in this action, the Intervenor, as well as two other parties, submitted bids to HRS within the time requirement set forth in the bid documents. The bids were opened at the time and place reflected in the aid documents and Invitation to Bid. Subsequent to the opening of the bids, John Stewart, who is Ernie Wilson's supervisor, and Ernie Wilson reviewed the bid packages submitted for Lease No. 590:2054 and made a determination as to which bids were responsive. As a result of that evaluation, a determination was made that all five bidders were responsive. These bidders were the Petitioner, Fred D. BOOZER, the Intervenor, Nottus, Inc. the Petitioner, Trust NB-1 Micah G. Savell and Professional Center V. Inc. These bid proposals were then submitted to the evaluation committee who viewed the property of each of the bidders on February 13, 1989. The bid documents of BOOZER contained an additional document, i.e., a site plan, which reflected that the premises subject to his bid proposal were an "existing building". The area submitted for the bid was shaded reflecting the entire square footage submitted for bid as being "in existence." The drawing further reflected the "existing building" as being the "proposed HRS building". The premises subject to the Petitioner's, BOOZER, bid were not in existence, as that term was defined in the bid specifications, in that approximately 2500 square feet had not yet been constructed. Two walls, a floor slab and a roof were not in existence. The only improvements located therein were palm trees, grass and a sidewalk. Petitioner stipulated that the area occupied by the palm trees, grass and sidewalk was in fact "not dry". The existing building at 2225 South Babcock Street that was dry at the time of the bid opening constituted approximately 6,900 square feet of premises subject to Petitioner's bid. At the time of the inspection, the Petitioner, BOOZER, was present. At no time did BOOZER indicate that the total facility bid was not in existence. The members of the evaluating committee who viewed the property for purposes of evaluating the bid were not aware of the fact that the entire premises subject to BOOZER's bid proposal was not in "Existence" and "dry". The floor plan showing the present configuration of BOOZER's facility reflected an open floor space for the area occupied by the palm trees, grass and sidewalk. The palm trees, grass and sidewalk were not reflected in the present configuration drawing. Both the floor plan and site plan were prepared by BOOZER's son with his approval. In evaluating the respective bid proposals, the evaluation committee rated the properties as follows: Fred D. BOOZER - 450 points Nottus, Inc.- 433 points Micah Savell - 384 points Trust NB-l - 360 points Professional Center V. Inc.- 357 points The location requirement found in Article D.3(b) of the bid package was taken into account. In evaluating the Nottus bid, including a zero rating from one of the evaluation committee members. As a result of the points awarded by the evaluation committee, a determination was made to award the bid to BOOZER, who was notified of this award on or about March 14, 1989 by letter dated March 14, 1989. On or about March 20, 1989, Petitioner, BOOZER, obtained a construction permit from the City of Melbourne to construct a fire wall and framing for additional shell building. This building permit was for the purpose of enclosing the area that was occupied by the palm trees, grass and sidewalk at the time of the bid proposal being submitted. Upon being awarded the bid, Petitioner, BOOZER then made a decision to commence construction to complete the premises subject to his bid proposal, and had expended $28,000 thereon through the hearing date. On or about March 29, 1989, HRS, through Ernie Wilson and Lynn Nobley, discovered the fact that approximately 2,500 square feet represented as being a part of the existing building, in fact was not existing pursuant to the bid specifications. At the time of this discovery, construction under the construction permit had not been completed. Mr. Wilson advised BOOZER at that time that he was concerned that BOOZER's bid was nonresponsive because the premises subject to the bid proposal were not in an "existing" building at the time of the bid submittal. The normal procedure for HRS in awarding a bid where the initial award is cancelled or thrown out is to award the bid to the second and next best lowest bidder. It is not the normal practice of the HRS evaluation committee to measure the applicable properties at time of evaluation to determine net rentable square footage. At the time of discovery of the foregoing status of BOOZER's building, Ernie Wilson, contacted a Nottus representative, Fred E Sutton, its President, to advise him of the possible nonresponsiveness of BOOZER's bid and requested information to determine whether Nottus, the second low bidder, still had facilities available pursuant to its bid documents and whether Nottus would agree to continue to continue to be bound by the terms thereof. Mr. Sutton advised Ernie Wilson that the facilities were still available and that Nottus would agree to abide by the terms of its bid proposal. Following the procedural steps necessary to advise the appropriate individuals within HRS of the possible nonresponsive bid by BOOZER, Ernie Wilson was advised by the Director of HRS General Services, King W. Davis, by letter dated April 2, 1989 to withdraw the award for the proposed lease 590:2054 from BOOZER because of approximately 2,500 feet of nonexisting space. He was also instructed to award same to Nottus as the second lowest bidder. On or about April 14, 1989, Ernie Wilson advised BOOZER of the Notice of Withdrawal of the award from BOOZER and award to Nottus, together with the reasons therefor, which was received by BOOZER on April 17, 1989. Petitioner, BOOZER, timely initiated these actions by filing his Notice of Intent to appeal the withdrawal of the award of bid to him and the award to Nottus, and by timely filing a formal written protest and request for formal hearing. Attachment "D" of the bid package required the submittal of a proposed plan to a division of the State Fire Marshal for review of any proposed construction or renovation to determine whether such construction or renovation complied with the uniform fire safety standards. Said plans were required to be prepared by licensed architects and engineers for certifications outlined in Attachment "D". These matters were all to be completed prior to the commencement of any revocation or alteration. Petitioner, BOOZER, commenced said improvements prior to said approval. In fact, BOOZER submitted no plans in compliance with these requirements prior to construction. Petitioner, BOOZER, is a licensed builder in the State of Florida, and has been for ten years. BOOZER further acknowledged that at the time of signing and submitting the bid proposal, he certified that he understood the terms of the bid specifications and agreed to be bound by them. TRUST NB-1 attempted to initiate an appeal of the award of the bid to Nottus by submitting a facsimile "notice of protest" to HRS predicated on the award of the bid to Nottus occurring greater than sixty (60) days following the bid opening date. TRUST NB-1 received notice of the award to Nottus on April 18, 1989 and attempted facsimile delivery on April 21, 1989. The facsimile "Written Notice of Protest" was not filed until April 25, 1989. The regular mail receipt of said Notice was received by HRS and filed on April 24, 1989. 38. The "formal written protest" was filed with HRS on May 1, 1989. 39. signature The facsimile Notice of Intent to Protest did not contain of a representative of TRUST NB-1. the original 40. Ernie Wilson is the custodian of records for bid protests for HRS, District 7, and is also the person designated in the bid documents as the contact person for the bid on Lease No. 590:2054. TRUST NB-1 was ranked number four in relation to the five bids submitted. Bidder Micah Savell, not a party to these proceedings, is the next low bidder after BOOZER and Nottus, Inc.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that Respondent enter a final order: (a) Finding the bid of Petitioner, BOOZER, to be unresponsive and that the cancellation of the award by Respondent was justified. Find the bid of Intervenor, NOTTUS to be unresponsive. Find that Petitioner, TRUST NB-1, lacks standing and its protest should be dismissed. Reject all bids. DONE AND ENTERED this 21st day of July, 1989, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 21st day of July, 1989. APPENDIX Proposed Findings of Fact by Petitioner, Fred O. Boozer: 1-5 Rejected. 6 and 7 Accepted as incorporated in the Recommended Order. Proposed Findings of Fact by Intervenor, Nottus, Inc. Accepted. Accepted as modified. 3-30. Accepted. 31. The first two sentences rejected as argument and not supported by the evidence. Last sentence in paragraph accepted. 32-40. Accepted. COPIES FURNISHED: Thomas Houck, Esquire 312 South Harbor City Boulevard Suite 1 Melbourne, Florida James A. Sawyer, Esquire District 7 Legal Counsel Department of Health and Rehabilitative Services 400 West Robinson Street Suite 911 Orlando, Florida Sam Power Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 Gregory L. Coler Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700 John Miller General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, FL 32399-0700
The Issue The issues presented in this proceeding are whether Petitioner submitted the lowest and best bid on CTB 5998 and whether Petitioner is entitled to the bid award.
Findings Of Fact On November 5, 1990, Florida A & M University, acting as the agent of the Board of Regents, issued a Call to Bid (CTB) for the repainting and renovation of Bragg Stadium (repainting project). The total project was estimated to cost $595,000.00. The funds for the project would come from the Public Education Capital Outlay and Debt Service Trust Fund appropriated by the legislature and passed into law in the State's budget. 1/ Specifically, the funds for the repainting project were appropriated by the legislature as a specific line item in the 1990-1991 budget. The line in the budget read, "Fire Code Corrections/Repainting-Bragg Stadium (includes $490,000.00 Reimb. to Aux. Fund), of $682,000.00." The $682,000.00 figure was obtained from several documents submitted by FAMU to the Board of Regents. The Board of Regents then submitted the University's budget requests to the Commissioner of Education who, in turn, submitted an integrated budget to the governor and legislature. See Chapter 216 and 235, Florida Statutes, for the specifics of this budgetary process. The beginning of the budgetary process in relation to the repainting project occurred on October 16, 1989, when Louis A. Murray, the Associate Vice President of Florida A&M sent a document titled "the University's 1990-91/1992- 93 Capital Improvement Fee Project List for Legislative Consideration" to Dr. Carl Blackwell, the Vice Chancellor for Budgets. The document contained two attachments entitled "Capital Improvement Fee Project List, Project Information Sheet" (Project Information Sheet) for the fire code corrections at Bragg Stadium and the repainting of Bragg Stadium. It also included a Project Information Sheet for the remodeling of the Commons Building. The Project Information sheet dealing with the repainting and renovation of Bragg Stadium contained the amount of funding being requested by FAMU for the repainting project and a breakdown of the project's estimated costs. The project cost detail for the repainting of Bragg Stadium states: Construction $495,000.00 (Assumes bid date of 1991) Professional Fees . . . . 43,000.00 Resident Supervision . . . (No entry) Equipment . . . . . 30,000.00 Contingency . . . . . 27,000.00 Total Project Cost: $595,000.00 Importantly, the Project Information Sheet for the repainting of Bragg Stadium contains the basis utilized by FAMU to arrive at the repainting project's estimate. FAMU represented in the Project Information Sheet as follows: The basis for the estimate is the bid experience of a prior advertisement of the project by our own Plant Operations Maintenance Office, which came in at over $400,000. 2/ This estimate was again verified in a letter, dated October 25, 1989, from Dr. Murray to Dr. Blackwell. The letter states, in part, as follows: . . . . Since the opportunity for completing this project is between football seasons, the University wishes to advance dollar requirements from its Auxiliary Trust Fund with expected reimbursement from Capital Improvement Trust Fund after Legislative approval on July 1, 1990. This action will permit us to proceed with the Bid process and construction contract through completion before the 1990 football season. The scope of this project is summarized as follows: This project includes sandblasting, repainting and structural repairs for Bragg Stadium. Sandblasting and repainting is estimated at $415,000, while structural repair, primarily isolated rust spots, will cost approximately $75,000. . . . . The total estimate in Dr. Murray's October 25, 1990, letter was $490,000.00. It was this letter which prompted the parenthetical language in the line item of the General appropriations act for 1990-1991, passed by the legislature and enacted it to law. The Project Information Sheet for the fire code corrections to Bragg Stadium (fire code project) contained a project cost detail as follows: Construction $70,000.00 Professional . . . . . 7,000.00 Resident Supervision . . . (No entry) Equipment . . . . . (No entry) Contingency . . . . . 10,000.00 Total Project Cost: $87,000.00 The contract for the fire code corrections was let for bid prior to the repainting project. The amount of the contract for the fire code project was approximately $107,000.00. This contract amount exceeded the amount of the construction portion of the Project Cost Detail of $70,000.00 shown in the Project Information Sheet for the fire code project. Dr. Murray testified that this action was acceptable because it was within the discretion of Florida A&M to use the $682,000.00 appropriation to perform the fire code project in any amount it deemed appropriate, without regard to the break-outs shown in the Project Information Sheets. However, even assuming the correctness of Dr. Murray's position and deducting the amount of the fire code project's contract and the architectural fees of $7,000.00 listed in the Project Information Sheet, $568,000.00 of the original budgeted amount of $682,000.00 would remain for use on the repainting project. Florida A&M University, also prepared a document titled, "Summary of Capital Improvement Fee Projects for 1990-91/1992-93." The document is a summary of Florida A&M's budget requests for those years. This document also lists the fire code project and the repainting project along with the requested funding for those projects for the years 1990 through 1991. The funds requested for the projects are broken into three categories; Planning, Construction and Equipment. The entries for the repainting project show that the amount of $522,000.00 is for "Construction". The $522,000.00 figure was obtained by taking the $495,000.00 figure for construction contained within the Project Information Sheet for the repainting project, and adding the amount of the contingency cost ($27,000.00) for the project which was also shown on the Project Information Sheet. The combined total for the two projects was $682,000.00, the exact amount appropriated by the legislature for the two projects. Once the legislature had appropriated the money, FAMU, on November 5, 1990, requested that A Capital Outlay Implementation Plan be established with the Capital Outlay Trust Fund. The establishment of such a Plan is similar to creating a special account within the trust fund from which the University can draw. On November 26, 1990, the Plan was established for both projects in the amount of $682,000.00, as had been appropriated by the legislature. 3/ The Capital Outlay Implementation Plan contained a section titled, "estimated budget". The estimated budget contained estimates for the various phases of both projects as follows: Construction. $565,000 Professional Fees. 50,000 Furnishings and Equipment. 30,000 Contingencies. 37,000 .................................$682,000 Significantly, these documents were the only pre-established construction budgets developed by FAMU prior to the opening of the bids in this case. 4/ The specific pre-established construction budget for the repainting project was $522,000.00. Later, after the filing of the bid protest, FAMU would attempt to render a strained interpretation of the phrase "pre-established construction budget" contained in the bid specifications and engage in some inappropriate accounting in order to create several lower budget estimates. The Bid Package for CTB 5998 provided in the "Instructions to Bidders", Item D-21, Rejection of Bids, as follows: The owner reserves the right to reject any and all bids when in the opinion of the owner such rejection is in the best interest of the owner. The Bid Package further provided in the "Instructions to Bidders" at B-23, Contract Award, page 16 of 106, in relevant part: The contract will be awarded by the Florida Board of Regents for projects $500,000 or more, and by the President of the University, on behalf of the Florida Board of Regents, for projects of less than $500,000.00, to the lowest qualified and responsible bidder provided the bid is reasonable and it is in the best interest of the owner to accept it. . . . The contract award will be made to the responsible bidder submitting the lowest responsible aggregate bid within the pre-established construction budget. The aggregate bid shall consist of the base bid plus accepted active alternate bids, or less accepted deductive alternate bids, applied in the numerical order in which they are listed on the bid form. If the base bid exceeds the amount of the pre-established construction budget, the owner may reject all bids. (Emphasis added) A mandatory pre-bid conference was held on December 6, 1990, and was attended by seventeen contractors, including Petitioner. By the terms of the bid package, the bid opening date was set for December 18, 1990. However, by addendum, the bid opening date was extended to December 21, 1990. Seven bids were submitted in response to the original solicitation. 5/ The bids were opened at 10:00 a.m. on December 21, 1990, at the conference center of Florida A&M University. The bids were opened by Chuks Onwunli on behalf of Florida A&M, and tabulated by William Sabella, a representative of the architectural firm , Barnett, Fronczak Architects, the consulting architects for the repainting project. The opening and tabulation of all the bids was recorded on a document titled "Bid Tabulation". The result of the opening was that Phoenix Coating was the low bidder with a bid of $419,000.00. Feimster-Peterson, Inc., was the second lowest bidder with a bid of $474,320.00, and Monoko, Inc., was the third low bidder with a bid of 487,462.00. The four other bidders listed on the bid tabulation sheet were all over the amount of $490,000.00. 6/ As can be seen from the numbers, the top three bids were well within the pre-established construction budget for the repainting project. On December 21, 1990, Feimster-Peterson sent a Notice of Protest by telecopy and overnight delivery for delivery on Monday, December 24th. The basis of the protest was that the low bidder, Phoenix Coating, was not responsive because it had not attended the mandatory pre-bid conference and had not complied with the minority participation requirements of the specifications. On December 28, 1990, Feimster-Peterson sent its formal protest to Forrest Kelly, the Director of Capital Programs at the Florida Board of Regents by telecopy and by overnight delivery with delivery on December 31, 1990. The formal protest was filed in a timely manner. On or about January 14, 1991, Oscar Martinez, the Purchasing Director for Florida A&M issued a letter regarding Bid No. 5927 for the repainting and renovation of Bragg Stadium. 7/ The letter rejected all seven bids. Phoenix Coating's bid was found to be nonresponsive because it did not meet the 15% minority participation requirements of Bid 5998 and because the company had not attended the December 6, 1990, mandatory pre-bid meeting. Because Phoenix Coating's bid was non-responsive, Petitioner became the lowest responsive bid on CTB 5998. The letter further advised that the other six bids, including Petitioner's bid, were rejected because all six bids allegedly exceeded the pre- existing construction budget estimate for the project. The letter did not contain any language affording Petitioner a clear point of entry as required by Section 120.53, Florida Statutes. The letter did indicate that the University would modify the scope of work. Attached to the same letter was a new invitation to bid. Clearly, at this point in time, FAMU knew or should have known that there was a bid protest filed with it which was unresolved and which required a formal administrative hearing. However, during this time instead of following its statutory duties under Chapter 120, Florida Statutes, FAMU, at its peril, chose to re-let the project for bids. The new bid opening was set for February 28, 1991, and a new mandatory pre-bid meeting was also set for February 28, 1991. The bid deadline was extended to March 21, 1991. The scope of the work was not significantly altered in the re-bid. 8/ On or about January 16, 1991, counsel for Feimster-Peterson sent a letter to the Florida Board of Regents. The letter was prompted by Robert Petersen's, president and stockholder of Petitioner, belief that something was not right about the monetary and funding claims that FAMU was putting forth as its basis for rejecting all the bids. In essence, the numbers Mr. Petersen was aware of, which did not include any of the Project Information Sheet figures referenced above, did not make any sense to him. The letter stated, in part, as follows: Re-bidding the Project is unfair to all bidders now that the results of the first bid have been made public. Each bidder now has a target . . . to shoot at which will override the customary free market environment. Rewriting the Specifications will not eliminate this effect. Be advised that Feimster-Peterson requests the opportunity to either see the estimates or negotiate with the Board to reach a mutually acceptable scope of work. I request that you delay re-bidding until this option can be explored. (Emphasis added). On January 23, 1991, counsel for Feimster-Peterson again wrote to the Office of General Counsel at Florida A&M University and stated in relevant part: This letter is to reiterate our concern for the actions taken by the Florida A&M Purchasing Department and regarding the painting contract for Bragg Stadium. We filed bid protest for the Florida Board of Regents filed on December 28, 1990 pursuant to paragraph B-22 of the bid documents. Neither the Florida Board of Regents or the administration of Florida A&M has acted upon our bid protest. The bid protest remains unresolved and we intend to pursue the administrative remedies provided to us through the bid protest procedure. Moreover, it is our position that the decisions taken by the Florida A&M Purchasing Department subsequent to our filing may be included and adjudicated within the administrative procedures of the original bid protest . . . Mr. Martinez apparently takes the position that a new bid protest filing is necessary to formally dispute his decision [about the University's available budget]. As indicated, we disagree and intend to dispute this action within the existing, unresolved bid protest . . . By indicating the precise amount of the budget, Mr. Martinez has eliminated the basic purpose of competitive bidding, which is to achieve the lowest responsive price. All bidders now have a target price, and a minor modification of the specifications will not eliminate this effect. This serves neither Florida A&M's interest nor the interest of the original responsive bidders. Feimster-Peterson has requested that negotiations be commenced so that a mutually beneficial contract price be determined and the contract work commenced. To date, Mr. Martinez has refused to enter such negotiations and have given several oral, unsatisfactory reasons for this position. The Purchasing Department's refusal to negotiate with Feimster-Peterson, the lowest responsible bidder, should be clearly articulated in writing and sent to us. Feimster-Peterson believes such negotiations may prove successful, and work could commence without further delay or expense to Florida A&M . . . . (Emphasis added). Feimster-Peterson intends to pursue its rights under the bid protest originally filed on December 28, 1990. As low responsive bidder, Feimster-Peterson is entitled to an award of the contract . . This letter was sent by both telecopy and Federal Express to Mr. Holifield at the Office of the General Counsel and added the additional issues of whether FAMU's action in regard to this bid constituted bid shopping and whether Petitioner's bid, in fact, exceeded the estimated construction budget for Bid 5998. 9/ Significantly, the Martinez letter did not mention that Respondent was rejecting Petitioner's bid because the University believed that it could increase the number of contractors participating in a re-bid and could achieve a lower price by re-bidding the project. This issue was raised for the first time at the hearing. In that regard, the evidence clearly indicates that Respondent was attempting to shop its bid in order to obtain a lower price by re-bidding the project. Bid shopping is a process by which the general contractor or, as in this case, the owner of a project attempts to play off one bidder against another bidder in order to obtain a lower price. Bid shopping is done either by establishing a target figure which is represented to bidders to be a number which must be beaten in order to obtain the contract; or by the bid shopper relaying the amount of a competitor's bid to a bidder or group of bidders in order to encourage the bidder or group of bidders to lower its bid to below that of the competitor in order to secure the contract. A basic assumption in bid shopping is that the scope of the work is not significantly altered in order to lower the cost of the project. Bid shopping is considered to be unethical in a public competitive bidding situation and has been disapproved of by the Florida courts. In this case, Respondent established a target price in its letter of January 14, 1991, by communicating the amount of the alleged overage, enabling a bidder to calculate the budget figures to shoot for and, at the same time, keeping the scope of the work substantially the same in the re-bid. Additionally, the amount of the bids, as well as details involving those bids became public once the bids were opened, converting the possibility of unfair advantage accruing to potential bidders on the re-bid to a probability of such unfair advantage in this instance. 10/ Such a reason for rejecting the bids in this case strikes at the very heart of the bid process, which is to ensure that bidders have an equal and fair opportunity to have their bids considered and prevent an agency from picking and choosing among various bidders or potential bidders. There was absolutely no evidence which indicated that the number of contractors participating in Bid 5998 was non-competitive or was in any way fundamentally unfair. 11/ By rejecting all the bids in order to attempt to shop its bid, Respondent acted in an arbitrary and capricious manner and therefore, its rejection of the bids in this case cannot stand. Additionally, Respondent's attempt to reject the bids in order to allegedly increase the number of bidders participating in the re-bid and thereby reduce the price, violated its own specification in the bid documents which states: The contract award will be made to the responsible bidder submitting the lowest responsible aggregate bid within the pre-established construction budget. (emphasis supplied) By going outside the scope of its bid specifications, Respondent has acted in an arbitrary and capricious manner and may not reject Petitioner's bid on this basis. After the protest of Feimster-Peterson raised the issue of the amount of the budget/estimate and after its request to see the budget, Florida A&M began to review documents to determine its response to Feimster-Peterson. The basis underlying the figures cited in Mr. Martinez's letter of January 13, 1991, was arrived at by subtracting amounts spent by Florida A&M from the $682,000.00 appropriated by the legislature for the fire code and repainting projects. The overage of $55,000.00 claimed in Mr. Martinez's letter of January 14, 1991, was calculated by taking the "proposed budget" of $682,000.00 and subtracting the amount of $257,105.00 "in expenses for the stadium", for an "available balance" of $424,895.00. 12/ It was this account balance which was being claimed by FAMU to be the pre-existing construction budget referred to in the bid documents. Such an account balance does not constitute a pre-established construction budget because the balance was not established prior to the submission or opening of the bids. Additionally, an account balance is simply not a budget as that term is normally defined and used in the bid documents. Mr. Martinez did not identify the source of the expenses or the purpose for those expenditures. Mr. Martinez deferred all questions as to verification of the figures or the purpose of the expenditures to "Bob", which referred to Robert Goodwin, Jr. Mr. Goodwin was and still is, the Director of the Facilities Planning Office of Florida A&M and is responsible for the various purchase orders involved in this case. Mr. Goodwin took his instructions on which purchase order numbers to use from Dr. Murray and/or Dr. Humphries, Associate Vice President and President of Florida A&M University, respectively. For reasons outlined later in this Recommended Order, the expenditures claimed for the stadium are highly suspect. On or about February 6, 1991, Mr. Holifield, General Counsel of Florida A&M University, responded to Petitioner by enclosing a statement of budget estimate for Bid No. 5998. 13/ Attached to Mr. Holifield's letter of February 6th was a memorandum addressed "[t]o whom it may concern" dated February 5, 1991, from Robert Goodwin, Jr., the Director of Facilities & Planning for Florida A&M. The memo stated that the "budget estimate" for the Project was $367,351.00. Mr. Holifield's letter noted that Feimster-Peterson's bid "exceeded the budget estimate by $106,969.00." (emphasis added). He further noted that FAMU had chosen to re-bid the repainting project rather than accept the bid of the Petitioner. Mr. Holifield also addressed the pending bid protest by Feimster-Peterson as follows: Florida A&M University feels that it is the best interest of the citizens and taxpayers of the State of Florida to re-bid this Project rather than to award the job to your client. In view of the discrepancy between the bidder and the client and the estimated budget it would seem that now that you have been provided with the budget estimate, that you and your client would be willing to forego the bid protest which you are attempting to pursue. Rather, it would appear to be far more appropriate for you to simply join in the rebidding process. (emphasis added). Again, the basis for the decreasing budget figure was the legislatively appropriated funds available for the project less amounts which were supposedly attributable to the repainting and fire code projects, i.e. the account balance. However, what the evidence clearly showed was that, like the budget figures underlying Mr. Martinez's assertions in his letter of January 14, 1991, the latest budget figure of $367,351.00 was calculated by Florida A&M subtracting sums for expenditures which were made for projects unrelated to the fire code or repainting projects. In fact, several of the expenditures were for improvements to the public address system at Bragg Stadium. Similarly, some of the amounts claimed to have been expended for the repainting and fire code projects were expended for architectural fees on other projects. 14/ FAMU's officials were aware that such accounting was inappropriate. From this evidence, it appears that FAMU is attempting to spend or has spent money specifically appropriated for two certain purposes on projects unrelated to the appropriation and not approved for such use by either the legislature or the Board of Regents. Since these expenditures are all part of other projects separate and distinct from the fire code and repainting projects, they should not have been subtracted from the amount of money available to FAMU for the repainting project. 15/ There is no doubt that this "budget estimate" and the budget underlying the assertions made by Mr. Martinez in his letter of January 14, 1991, were false and were red herrings, developed after the fact, in an attempt by Respondent to throw Petitioner off the track of an otherwise valid bid protest. Moreover, beyond utilizing improper accounting, one of the most significant facts in this proceeding was that FAMU created no less than eight separate figures which it claimed to be the budgets for this project. Which figure FAMU used depended on who FAMU was dealing with at the time and the result FAMU desired to achieve. Such tactics by an agency are totally unacceptable and the use of such false figures to justify rejection of a bidder's bid is nothing short of bad faith on the part of an agency akin to fraud. Since Petitioner submitted the lowest and best responsive bid, Petitioner, at this point in time, was entitled to the award of Bid 5998. Another point not directly raised by FAMU in this proceeding, but suggested by the underlying facts and necessary to the resolution of this bid protest, is the question of whether bids may be rejected by an agency if the funds necessary to complete the project are no longer available, i.e. the agency has run out of money. On the surface, given the constraints of Florida's finance system, an honest lack of funds would appear to be an appropriate basis for an agency to reject all the bids. See Section 235.42, Florida Statutes. However, in this case, the evidence does not support a finding that the University no longer has the necessary funds to pay for the repainting project since the actual money from the trust fund has not been disbursed to FAMU and since FAMU's representations in regards to the status of the repainting project's account balance appear to be based on unlawful accounting and are less than credible. Since the evidence did not establish that FAMU no longer has the funds necessary to complete the project, Petitioner was entitled to the award of Bid 5998. However, because of FAMU's actions regarding Petitioner's bid protest which actions were highly prejudicial to Petitioner, time had moved on and, on February 25, 1991, FAMU discovered that there was lead in some portion of the paint on Bragg Stadium, in the amount of 1.9% by weight. The test was conducted by Professional Services Industries, Inc. on some paint chips from the stadium. The test utilized by Professional Services is known as the TCLP test. This discovery began a review by Florida A&M, in conjunction with Barnett, Fronczak Architects, of what changes, if any, needed to be made to the Specifications and what options were available for carrying out the repainting of the stadium. 16/ On March 19, 1991, the Project was "cancelled" by Addendum number 4 until the fall of 1991. Presently, it appears uncontradicted that the paint which is on Bragg Stadium contains lead. It is probable that the lead is contained in the primer coat, which is the first coat on the steel. In fact, the current specifications for the repainting project call for a red lead and oil primer coat to be placed on the steel structure of the stadium. Of the options which have been proposed by the architect, two of them assume that the lead paint will not be removed from the structure, but will essentially be sealed in by the new coatings. These options will avoid the creation and need for disposal of any hazardous waste containing lead and should result in either the same cost to perform the work or in a reduction in cost to perform the work. The third option is to completely remove all the paint and possibly create material which may be hazardous waste. This option is essentially the same type of sandblasting called for in Bid 5998, but may require more money to perform. Any possible increase in the cost of Bid 5998 would be due to the greater expense of disposing of any hazardous waste, if any such waste is created by the blasting operation, and whether the presence of the lead is an unforeseen condition as defined in the proposed contract which would entitle Petitioner to an increase of the bid price caused by the potential cost of disposal to it. In this case, the evidence did not demonstrate that the presence of the lead was an unforeseen condition. Article 3.15 of the proposed contract when compared to Article 10.1 appears to comtemplate the discovery of potentially hazardous materials. Additionally, as indicated earlier, the current specifications of Bid 5998 call for a lead primer coat. Under all the facts of this case, the presence of lead or lack of lead in the paint on Bragg Stadium would appear to be a circumstance the risk of which is assumed by the bidder in bidding the project; and therefore, would not be a changed or unforeseen condition which would justify rejecting all the bids. Importantly, the scope of the work, i.e. sandblasting and structural repair, would not change. Sandblasting is the same whether the surface being removed contains lead or does not contain lead. The structural repair required by Bid 5998 is not effected by the presence of lead in the paint on Bragg Stadium. The only differences would occur in the type of equipment used and the type of respirators worn by the workers. The equipment for lead removal has vacuums incorporated in its operation and uses a steel grit instead of sand. The steel grit actually reduces the amount of any potential hazardous waste by compacting it into a smaller volume. The respirators differ in the type of filters. Neither of these differences affect the cost of the work required in Bid 5998. Similarly, disposing of the end product of the blast operation would still be required under Bid 5998 whether the debris contains lead or does not contain lead. The only difference would be the ultimate disposal site of the barrels of debris, i.e whether at a regular landfill or at a disposal site for hazardous waste. All of these differences are already required under EPA, OSHA and DER rules regulating lead abatement, toxic chemicals and hazardous waste and are utilized by Petitioner when it encounters lead in its paint removal operations. Moreover, the bid documents contemplate that the bidder is familiar with all federal, state and local laws and regulations which affect the project in any manner. See Section B-3 "Instructions to Bidders." While it is uncontroverted that the paint contains lead, it is also not clear whether the end product created by a blasting operation would be hazardous waste requiring expensive disposal in a hazardous waste landfill and what amount, if any, would need to be placed in a hazardous waste landfill. The TCLP tests performed by Professional Service Industries were run on paint chips and not the abrasive debris that remains after a blasting operation. Therefore, the TCLP test results have no relevance as to what amount of hazardous waste, if any, would need to be removed from the site. In fact, it is impossible to determine whether the debris left over from the blast operation will be hazardous waste until the blast operation has begun and produced debris sufficiently representative of what may be expected during the course of the work and which is capable of being tested. The issue of lead arose long after the rejection of the bids on the basis of Feimster-Peterson's bid being over the budget and would not have become a potential basis had FAMU acted in a responsible manner in the award of this bid. It is understood that the University and its architects are still trying to determine what, if any, action needs to be taken regarding the presence of lead in the paint. The evidence established that at a minimum the architect would have suspended the project to give them time to study the lead and determine what course of action should be taken. At the most, the architect would have cancelled the project. Added to such an analysis is the fact that the Bid specifications appear to require a red lead and oil primer paint to be placed on the structural steel of the stadium and that under the facts of this case, the presence of lead in the paint on the stadium would not be an unforeseen condition. In either event, the discovery of the lead did not undermine the scope of the repainting project as it is comtemplated in the bid documents and may have only resulted in change orders under the terms of the proposed contract. 17/ The General Conditions of the contract provide in Article 3, Administration of the Contract, paragraph 4.3, Claims and Disputes, subparagraph 4.3.6, Claims for Concealed or Unknown Conditions, as follows: If conditions are encountered at the site which are (1) subsurface or otherwise concealed physical conditions which differ materially from those indicated in the contract documents or (2) unknown physical conditions of an unusual nature, which differ materially from those ordinarily found to exist and generally recognized as inherent in construction activities of the character provided for in the Contract Documents, then notice by the observing party shall be given to the other party promptly before conditions are disturbed and in no event later than twenty-one days after the first observance of the conditions. The Architect/Engineer will promptly investigate such conditions and, if they differ materially and cause an increase or decrease in the contractor's cost of, or time required for, performance of any part of the work, will recommend an equitable adjustment in the Contract Sum or Contract Time, or both . . . . Article 7, Changes in the Work, also provides a mechanism by which the Architect/Engineer and the Owner may order changes in the work after execution of the contract. Paragraph 7.3, Construction Change Directives, provides the mechanism by which the amount of a construction change directive is determined. A change order is simply a revision of the scope of the contract, requiring that something be done differently, that more be done, or that less be done, than what is within the original scope of work of the contract. Article 14, Termination or Suspension of the Contract, paragraph 14.3, Suspension by the Owner for Convenience, provides in relevant part: The owner may, without cause, order the contractor in writing to suspend, delay or interrupt the work in whole or in part for such period of time as the owner may determine. An adjustment shall be made for increases in the cost of performance of the contract including profit on the increased cost performance, caused by suspension, delay or interruption . . . . (Emphasis added). It is clear that conditions, such as the lead in this case, are contemplated by both the bid and the contract which is part of that bid. In this case, but for FAMU's actions, Petitioner would have been awarded the contract prior to the discovery of the lead. Had Florida A&M entered into a contract with Feimster-Peterson to perform the repainting project when it should have, it would have been guided by Article 14.3 of the specifications, "Suspension by the Owner for Convenience." The evidence did not demonstrate that the discovery of the lead would sufficiently change the scope of the repainting project to the extent that a new bid would have to be developed and that the contract terms of Bid 5998 were inadequate to handle any changes in the scope of the work for the repainting project. Such a result is especially desirable where, as in this case, the University has acted in such a way so as to undermine the fairness of the competitive bidding process and is attempting to spend appropriated money in a manner not authorized by statute. In essence, FAMU has undermined the competitive bidding process to the extent that it would be unfair to re-bid the project since it is impossible to remove FAMU's past conduct from any rebid on any re-vamped specifications. The only remedy, in this case is to award Bid 5998 to Petitioner as the lowest and best responsible bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that Florida A&M University enter, on behalf of the Board of Regents, a Final Order awarding Bid 5998 to Petitioner as the lowest, responsible bidder on the repainting project. RECOMMENDED this 18th day of September, 1991 in Tallahassee, Leon County, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 18th day of September, 1991.
The Issue The issue in this case is whether the Respondent, the Department of Labor and Employment Security, acted fraudulently, arbitrarily, illegally, or dishonestly in rejecting the bid of the Petitioners to lease office space to the Respondent on the ground that the proposed space was not "dry and measurable" at the time of the bid.
Findings Of Fact The bid specifications in the solicitation by the Respondent, the Department of Labor and Employment Security (DLES) for its Lease No. 540:0977 (office space in Orange County) required that proposed space be in an existing building "dry and capable of being physically measured to determine net rentable square footage at the time of bid submittal." The requirement that proposed office space in response to Lease No. 540:0977 be "dry and measurable," as described in the preceding finding, is a long-standing, standard requirement found in the bid specification form developed by the Department of Management Services (DMS) (formerly the Department of General Services (DGS)) for use by all agencies of the State of Florida. DMS' (and, formerly, DGS') long-standing interpretation of the "dry and measurable" requirement in the standard bid specification form is that the building must have a roof and walls, with windows either in place or covered over so that the building interior stays dry in adverse weather conditions. In response to the DLES solicitation for bids for its Lease No. 540:0977, the Petitioners submitted a bid for space in a former Publix strip shopping mall, formerly known as the Northgate Shopping Center, located at 5023 Edgewater Drive, in Winter Park, Florida. At the time of the bid, the mall was unoccupied and in the process of being renovated and was a designated construction site. The building had been gutted, and the glass in the front of the building had been removed. The glass could be referred to as "windows" but actually would make up the top two-thirds of the front wall of the building. As a result, without the glass, the front "wall" consisted of a three to four foot rise of concrete blocks, and the front of the building was otherwise open. There was a 12-foot, eight-inch overhang over the front "wall," but wind-blown rain could enter the building, and apparently did. (There was standing water on the floor of the gutted building. There also were missing or unsecure doors along the back wall of the building.) When Susan Early, the DLES employee in charge of the bid solicitation, received the Petitioners' bid and saw the photographs of the building required by the bid solicitation, she questioned whether the building was "dry and measurable." To help answer her question, she asked another DLES employee, who was located in the Orlando area, to go to the site, take pictures, and send a report of her findings, together with the photographs. The report and photographs indicated to Early that the building was not "dry and measurable." But, instead of relying on the information she had, she sent another, Tallahassee-based DLES employee to the site and received confirmation of her understanding as to the condition of the building. She then contacted Mary Goodman, the person at DMS who had the most experience in the area of soliciting and evaluating bids of leased office space, and who ultimately would be responsible for approving the DLES lease. Goodman advised Early that the DLES should reject the Petitioners' bid as non-responsive because it was not "dry and measurable." The DLES also rejected, as being non-responsive, the only other bid received in response to the bid solicitation. In the Final Order, The Koger Company v. Div. of Admin. Hearings, DOAH Case No. 88-3357BID, entered September 21, 1988, the Division of Administrative Hearings rejected a bid as not offering "dry and measurable" space because the building "had a roof, a slab, and walls, which comprised 50 percent of the vertical plane from the slab to the roof." The bidder's argument that the building "had a four foot overhang" and that "the overhang prevented rain from entering the building" was rejected as not being credible "given the large amount of window space which was not enclosed." The winning bid, which was upheld as being a "dry and measurable" was an abandoned bowling alley that "had walls, a slab, and portions of the exterior walls were boarded over, possibly in the location of existing windows or window openings. The roof did have a hole, which was approximately three feet in length and allowed water to leak into the building." (Citations to the record omitted.) The facts derived from the Final Order, The Koger Company v. Div. of Admin. Hearings, supra, do not in themselves prove that the DLES acted fraudulently, arbitrarily, illegally, or dishonestly in rejecting the Petitioners' bid. Although the Petitioners' bid in this case was for a building that once had a certificate of occupancy, the Petitioners' bid in this case is more similar in other respects to the rejected bid than the successful bid in the Koger Company case. For example, like the rejected bid in the Koger Company case, the Petitioners' bid had partial exterior walls. The Petitioners proved that they also submitted a bid for the lease of office space in the Northgate Shopping Center in response to a bid solicitation by the Florida Department of Corrections (Parole and Probation Commission). The bid was evaluated, along with others, and the lease was awarded to another bidder. It can be inferred from this that the Department of Corrections made a determination that the Petitioners' bid was "dry and measurable." However, those facts alone do not prove the DLES, in this case, acted fraudulently, arbitrarily, illegally, or dishonestly. They only would prove that the two agencies interpreted the phrase "dry and measurable" differently. There also was evidence that the Department of Health and Rehabilitative Services (HRS) interprets the phrase "dry and measurable" differently than DLES does. But it was not proven whether HRS would have accepted a bid for space having the characteristics of the Petitioners' bid. The Petitioners argued persuasively from the evidence presented that the requirement that bid space be "dry," as interpreted by the DMS and the DLES, can be impractical when applied to the real world of building renovations and may exclude possible good lease opportunities. Sometimes, space in a building under construction or substantial renovation can be leased at lower rates. Presumably for that reason, the Department of Corrections (Parole and Probation Commission) and HRS interpret the requirement differently. But, given the requirement that bid space be "dry," it cannot be said that the DLES acted fraudulently, arbitrarily, illegally, or dishonestly in rejecting the Petitioners' bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent, the Department of Labor and Employment Security, enter a final order rejecting the bid of the Petitioners to lease office space to the Department in Winter Park, Florida, Lease Number 540:0977. RECOMMENDED this 9th day of September, 1993, in Tallahassee, Florida. J. LAWRENCE JOHNSTON Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of September, 1993. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3922BID To comply with the requirements of Section 120.59(2), Fla. Stat. (1991), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1.-3. Accepted and incorporated to the extent not subordinate or unnecessary. It should be noted, however, that the missing "windows" in front made up approximately two-thirds of the front wall of the building. Rejected as not proven, according to the DLES interpretation of the "dry and measurable" requirement, that the bid space was "existing." Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. It should again be noted that the missing "windows" in front made up approximately two-thirds of the front wall of the building. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Rejected in part as not proven, in part as argument, and in part as irrelevant. It also should again be noted that the missing "windows" in front made up approximately two-thirds of the front wall of the building. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Accepted and incorporated to the extent not subordinate or unnecessary. In part, rejected as irrelevant and not proven. (Evidence as to the HRS manual and related facts was excluded as being irrelevant.) The rest is accepted but largely subordinate and unnecessary. Irrelevant and unnecessary. (It was established at the hearing that the Petitioners' bid was rejected only because the bid space was not "dry"; DLES does not contend that it was not "measurable.") Accepted but subordinate and unnecessary. In part, irrelevant, subordinate and unnecessary (what Mr. Taylor's definition is.) In part, cumulative. In part, rejected as argument. In part, accepted and incorporated (that the requirement that bid space be "dry," as interpreted by the DMS and the DLES, can be impractical when applied to the real world of building renovations and may exclude possible good lease opportunities.) Rejected as irrelevant and unnecessary. (Assuming it acts consistently from case to case, an agency's choice not to waive technicalities cannot be called "acting fraudulently, arbitrarily, illegally, or dishonestly.") Rejected as being argument and as not proven. Respondent's Proposed Findings of Fact. 1. Except for the number of square feet, which is in error, accepted and incorporated. 2.-5. Accepted and incorporated. 6. Rejected as contrary to the findings of fact and the greater weight of the evidence that there were no walls in front. (They extended only about a third of the way up to the ceiling.) 7.-8. Accepted and incorporated. 9. Accepted but subordinate and unnecessary. COPIES FURNISHED: Alan Taylor 170 East Lake Elbert Winter Haven, Florida 33881 Edward A. Dion, Esquire Assistant General Counsel Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle South East Tallahassee, Florida 32399-2189 Shirley Gooding, Secretary Department of Labor and Employment Security 303 Hartman Building 2012 Capital Circle South East Tallahassee, Florida 32399-2152 Cecilia Renn, Esquire Chief Legal Counsel Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle South East Tallahassee, Florida 32399-2152
Findings Of Fact On June 17, 1983, Respondent, Department of State, Bureau of Systems Management, issued Invitation to Bid No. DOS 80-82/83 to prospective bidders to provide 22,059 square feet of office space for use as offices for the Division of Licensing and Division of Corporations in Leon County, Florida. According to the general specifications and requirements, the space was to be located within one mile of the Capitol Building and available by August 1983, or within 30 days after execution of a valid lease. Sealed bids were to be received no later than 2:15 p.m. on July 27, 1983. At that time, all bids would be publicly opened. Petitioner, George E. Winchester, a partner in George and Lewis Winchester Construction Company, is the current lessor to Respondent of space used by the two divisions that will utilize the space requested in the bid. The monthly rental amount is $12,639.50. Although the lease expired on August 11, 1983, Respondent continues to lease the office space from Petitioner while this controversy remains pending. As is pertinent here, paragraph eleven of page seven of the Invitation to Bid contained the following miscellaneous requirements: Pest control. Soundproofing in specified areas (see floor plan Attachment H). Office must be prewired for telephone service (DMS-100 telephone system) 50-pair cable to support 20-button sets. Special climate control for selected areas where a concentration of heat-producing machines are located. All such equipment must be maintained at a maximum of 78 degrees. Capability for coaxial cable to be installed in all areas at lessor's expense. Capability for lessee to install additional coaxial cable at a later date. Office space must be able to receive dedicated electrical outlet for EDP and other specialized equipment. Offices to be prewired to provide for public announcement system in specified areas (Space 8,060 square feet). Offices to be located on one floor in reasonably close proximity (desired for Space 8,060 square feet). Window coverings to be provided on all windows. If office space has structural pillars or protrusions, lessee reserves the right to require decorative treatment of those struc- tures. Attached to the Invitation to Bid was a one-page document entitled "Attachment H" which provided a suggested configuration of offices and rooms. The "specific electrical, telephone and soundproofing requirements" within the office area were also reflected in Attachment H. Paragraph five of the General Conditions of the Invitation to Bid provides as follows: INTERPRETATIONS Any questions concerning conditions and specifica- tions shall be directed in writing to this office for receipt no later than ten (10) days prior to the bid opening. Inquiries must reference the date of bid opening. No inter- pretation shall be considered binding unless provided in writing by the State of Florida in response to requests in full compliance with this provision. Petitioner was in possession of The Invitation to Bid for several weeks prior to The bid deadline of July 27, 1983. However, because he considered the matter to he only a "small lease," and one which would not take a great deal of time to prepare, he waited until five or six days before July 27 to begin preparations for submitting a bid. In reviewing paragraph eleven on page seven of the general specifications and requirements, he concluded that items 2, 3, 4, 5, 7, 8, 9 and 10 were too "vague" to prepare a bid. In an effort to clarify the alleged ambiguities, he sought assistance from Department personnel on Thursday, July He was advised to contact a Mr. Cushing, chief of the Department's Bureau of Management Systems. He did so by telephone on July 22 but did not receive satisfactory information. Finally, on the afternoon of July 26, he met with five or six employees of the Department of State to discuss the items in question. After the meeting, Winchester did not indicate he was still confused. Based upon Winchester's questions, the Department decided to issue a revised page seven. The revisions were not substantive in nature but were merely intended to provide further clarification and assistance to the bidders. As revised, paragraph eleven of page seven provided as follows: Pest control (once monthly--professional exterminator.) Soundproofing in specified area (see floor plan Attachment H). (Maximum soundproofing acoustical tile to be used in two rooms-- llx7 and 18x10--which will house computer equipment; other rooms specified for sound- proofing should have material to prevent voices from being heard through the walls.) Office must be prewired for telephone service (DMS-100 telephone system) 50-pair cable to support 20-button sets. Special climate control for selected areas where a concentration of heat-producing machines are located. All such equipment must be maintained at a maximum of 78 degrees. Capability for coaxial cable to be installed in all areas at lessor's expense. Capability for lessee to install additional coaxial cable at a later date. Breaker box or fuse box must be able to receive three 220 lines for EDP and other specialized equipment. Offices to be prewired to provide for public announcement system in specified areas (Space A 8,060 square feet only). (Muzak-type sys- tem with PA capability is acceptable.) Offices to be located on one floor in reasonably close proximity (desired for Space A 8,060 square feet). Window coverings to be provided on all windows (flame-retardant drapes or mini-blinds) If office space has structural pillars or protrusions, lessee reserves the right to require decorative treatment of those struc- tures. (The structural protrusions shall be made compatible with the wall areas in the rooms in which they are located.) All three prospective bidders were either advised by telephone or in person that afternoon that a revision was being issued. The Petitioner received his copy shortly after his meeting with the Department's representatives. After receiving the revision, Winchester called several subcontractors the next morning to obtain price quotations for the various items. Although he still maintained the bid was a guess" and he did not know if he could make any profit, he was nonetheless sufficiently informed to prepare specific prices for each item he had questioned. The bid package was filed prior to the deadline. Winchester did not use other professionals to interpret the specifications or to assist him in the preparation of his bid. He also did not avail himself of the provisions in paragraph five of the General Conditions which permitted him to make written inquiry to the Department concerning any alleged ambiguities. On the afternoon of July 27, 1983, the bids, numbering three, were opened by Respondent. 1/ Thereafter, on August 1, 1983, the Director of the Department's Division of Administration wrote Intervenor/Respondent, Hobco, Inc., a letter which reads in pertinent part as follows: In response to your bid to provide 22,089 square feet of office space to the Department of State, you are hereby notified that you are awarded the bid. The award prompted the instant proceeding. Although item 9 stated that offices were "to be located on one floor in reasonably close proximity," this was not a mandatory requirement. Rather, it was a preference on the part of the Department. This was confirmed by a letter from the Department to Crown Properties, another bidder, which had made a written inquiry to the Department on June 23, 1983, concerning that provision. Further, the specifications indicate that one floor was "desired," and that in the weighting process, the providing of one floor was not a dispositive attribute in determining the award. The evidence is conflicting as to whether certain items within the miscellaneous requirements in question are vague and ambiguous. However, it is found that the evidence is more persuasive that the specifications were sufficiently clear to allow a bidder to formulate a competitive bid to lease office space. A reading of the specifications themselves, including Attachment H, a visual inspection of the presently leased premises, and the use of other professionals for assistance would provide sufficient information relative to soundproofing, communications and electrical requirements to prepare a bid that would conform with specifications. Moreover, the General Conditions of the Invitation to Bid provided all prospective bidders with the opportunity to make written or oral inquiry concerning any "conditions and specifications" that they questioned.
Recommendation Based on The foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent award Invitation to Bid No. DOS 80-82/83 to Hobco, Inc. DONE and ENTERED this 9th day of November, 1983, in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 9th day of November, 1983.
