Findings Of Fact Pursuant to Section 287.042(2), Florida Statutes, the Department of Management Services (DMS), lets various Invitations to Bid (ITB) for the benefit of state agencies, cities, counties and other local government agencies so that these entities may purchase a variety of goods and services. On August 24, 1993, DMS issued Invitation To Bid #28-070-700-P. The bid was one of 225 Invitations to Bid issued by DMS in 1993. The bid was for the purchase of medium and heavy trucks. The bid which is the subject of this case involves truck #150. The truck #150 bid has thirteen pages with forty- seven options plus base truck bid blanks. General Condition 1 of the Invitation to Bid requires that "all corrections made by bidder to his price must be initialed." Other documents provided by the Department to interested bidders as part of the bid package reiterate the requirement that all price changes must be initialed. These documents include the "Checklist," a document entitled "Common Problems That Result in Bid Being Rejected" and the document entitled "Medium and Heavy Trucks Index." The requirement in General Condition I of the Invitation to Bid, that all price changes must be initialed, contains no printed exceptions with respect to "nonpreselected" options. The purpose of the requirements of General Condition 1 of the Invitation to Bid is to protect both the State of Florida as well as competing vendors. The reason for the requirement that all price changes or alterations be initialed by the vendor is to protect both the State of Florida against a successful bidder later inserting higher option prices and charging the state agencies those prices, and the vendor against the State later inserting lower prices and attempting to hold the vendor to those prices. General Condition 13 of the bid document states: LEGAL REQUIREMENTS: Applicable provisions of Federal, State and Local law and all ordinances, rules, and regulations shall govern development, submittal and evaluation of all bids received in response hereto and shall govern any and all claims and disputes which may arise between persons(s) submitting a bid response hereto and the State of Florida, by and through its officers, employees and authorized representatives, or any other person, natural or otherwise; and lack of knowledge by any bidder shall not constitute a cognizable defense against the legal effect thereof. . . (Emphasis added.) General Condition 13 incorporates Rule 60A-1.001(3), Florida Administrative Code, which permits the State to waive minor irregularities in the conformance of a bid proposal to the formal bid requirements. The lowest bidder is determined by two factors. The first factor is the price for the base truck. The base truck is the minimum truck which can be ordered in this contract with no options. It is basically a chassis with an engine. The second factor involves additions to the truck called preselected options or predetermined options. All of the other options for the particular vehicle are deemed nonpreselected options. Preselected options are generally the most frequently ordered additions to the base truck along with some other less frequently ordered options. The preselected options can vary from bid to bid; however, DMS always determines the preselected options before opening the bids. The price of any option cannot exceed retail price. There is, therefore, a ceiling for the prices of preselected and nonpreselected options. The preselected options are not announced until after the bid is posted to prevent dishonestly low prices on preselected options and to promote competitive prices throughout the contract document. The bidders therefore do not know which options are preselected when they are composing their bids. There is nothing to be gained by a bidder loading a particular option with a high markup, because the bidder cannot guarantee that the option will not be preselected. The bid evaluation price is the base truck price plus the price of the combined chosen preselected options. DMS received numerous bids on the ITB, including a bid from Petitioner and Intervenor. Atlantic Ford bid a combined price of $38,737.00, and was the apparent low bidder; Duval Ford bid a combined price of $39,944.00 and was the apparent second low bidder. Upon receipt of the bids from the bidders, the bids were held in a locked room until the bid opening. After the bid opening, the purchasing specialist assigned to this bid reviewed each bid for conformity to the general non-technical specifications. Only the Bureau of Procurement is responsible for the nontechnical review although other Bureaus or Divisions may review and have input into the review process. However, these other Divisions' input is not binding. In the nontechnical review the purchasing specialist reviewed each bid's signatures, whether or not the bid was signed in ink, and numerous other requirements. The purchasing specialist also reviewed the bids to determine if all base bid blanks and price blanks for preselected options were filled in and that no corrections were made to those prices without a bidder's initials acknowledging the change. The bids which failed to meet the general conditions of the bid for base bid items and preselected options were rejected as nonresponsive bids. After the initial nontechnical review, the bids were sent to the Division of Motor Vehicles and Watercraft for a technical evaluation. However, since each bid document contains bids for several trucks, there may be a mixture of responsive and nonresponsive bids for various trucks in the same document and the Division of Motor Vehicles and Watercraft may receive responsive and nonresponsive bids for technical review. John Bevins of the Division of Motor Vehicles and Watercraft reviewed the technical parts of the bid. This information included manufacturer's codes for options and base truck features as well as the manufacturer's retail price which no bidder can exceed. After John Bevins completed his review, he filled out a bid rejection recommendation form. John Bevins chose to include nontechnical items in his recommendation, although this was beyond the scope of his review. Mr. Bevins indicated on his bid evaluation form that Atlantic Ford failed to initial a typewritten correction on option 8206 of truck 150. Mr. Bevins returned the reviewed bids to the purchasing specialist along with his recommendation that Atlantic Ford's bid was not responsive since it failed to initial the typewritten correction on option 8206. The purchasing specialist discussed the failure of Atlantic Ford to initial the typewritten correction on option 8206 with H. P. Barker, Jr., the Bureau Chief of Procurement. H. P. Barker, Jr. has the final authority within the Bureau of Procurement to decide if a bid is responsive. He is the customary agency decision-maker on these matters. After careful consideration and discussion, H. P. Barker, Jr., determined that the failure of Atlantic Ford to initial the typewritten correction on a credit is a minor irregularity according to the Department's purchasing rules, since option 8206 was a nonpreselected option and did not effect the total bid price for determining the lowest bidder. Barker's decision was based on the State's interest in obtaining trucks at the lowest price, thereby obtaining the most goods per contracting dollar. Duval Ford conceded that the typewritten correction was faint and does not appear on photocopies of the bid. Barker testified that DMS accepts photocopies of bids. If Atlantic Ford had submitted a photocopy of its bid, as it could have legally done, then the typewritten correction would probably not have been noted by the Department or the other bidders. Barker also testified that bids are not rejected if nonpreselected option blanks are not filled in. Dealers can choose not to offer all nonpreselected options. Finally, in this case option 8206 was a credit. Even if a purchaser under the contract orders option 8206, it will pay six dollars ($6.00) less for the overall truck from Atlantic Ford than if the truck was ordered from Duval Ford. Duval Ford offered evidence from 1991, that DMS had rejected a bid of another dealer for failure to initial a price change on a nonpreselected option. However, Nelson Easom, Duval Ford's manager had not been able to discover any similar rejections in the subsequent two years. Barker testified that the policy regarding noninitialed nonpreselected options changed three years ago. DMS then decided to treat them as minor irregularities. The policy change was based on the public policy to award the lowest bid whenever possible and to prevent minor deviations in bids from causing the state to pay higher prices for goods and services. Moreover, the evidence did not show any abuse of the bid process which would occur should price changes not be initialed. The alleged "protection" afforded to bidders by requiring every change to be initialed is at best tenuous since any fraudulent price changes could easily be recognized by the party against whom the change was made. Given these facts, this case over initials appears to be much ado about nothing, and the failure of Atlantic Ford to initial its price change on a nonpreselected option is a minor irregularity and waiveable by DMS. DMS therefore did not act in an arbitrary and capricious manner by waiving the irregularity and awarding the bid to Atlantic Ford.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent issue a Final Order in this case dismissing Petitioner's formal protest and awarding the contract for the Project to Atlantic Ford. DONE AND ENTERED this 15th day of March, 1994, in Tallahassee, Florida. DIANE CLEAVINGER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of March, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-6790BID The facts contained in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 16, 17, 18, and 19, of Respondent's Proposed Findings of Fact are adopted in substance insofar as material. Paragraphs 15 of Respondent's Proposed Findings of Fact was legal argument. The facts contained in paragraphs 1, 2, 3, 4, 10, 13, 17, 18, 21 and 24 of the Petitioner's Proposed Findings of Fact are adopted in substance insofar as material. The facts contained in paragraphs 11 of Petitioner's Proposed Findings of Fact were immaterial. The facts contained in paragraphs 5, 6, 7, 8, 9, 12, 14, 15, 16, 19 and 20 of Petitioner's Proposed Findings of Fact are subordinate. 9. The facts contained in paragraphs 22 and 23 of Petitioner's Proposed Findings of Fact were not shown by the evidence. COPIES FURNISHED: Charles Cook Howell, III Howell, O'Neal & Johnson Suite 1100 Jacksonville, Florida 32202 Cindy Horne Office of the General Counsel Department of Management Services Knight Building, Suite 309 2737 Centerview Drive Tallahassee, Florida 32399-0950 Kerri L. Barsh Attorney at Law Greenberg Traurig et al. 1221 Brickell Avenue Miami, FL 33131 Paul A. Rowell, Esquire General Counsel Department of Management Services 312 Knight Building 2737 Centerview Drive Tallahassee, FL 32399-0950 William H. Lindner Secretary Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, FL 32399-0950
Findings Of Fact The Department of Corrections (Corrections) initially published an Invitation to Bid (ITB) 90-Region-001 for the provision of a recyclable baling machine which had an opening date and time of 1:00 p.m., August 22, 1989. Upon opening and evaluation of the bids filed in response to ITB 90- Region-001, Corrections' purchasing and technical staff determined that the specifications for this initial ITB had been drafted too narrowly for them to validly and reasonably compare the bids submitted. This was Corrections' first attempt to meet certain recycling mandates and the agency personnel were initially unfamiliar with all of the machinery available in the marketplace. Lack of technical literature from some bidders was also a problem. In comparing the five bid responses received, it became apparent to Barbara Stephens, Corrections' Purchasing Director, that the specifications she had initially drafted worked against agency interests in that they were so narrow that different models could not be compared. In Ms. Stephens' words, one could not even compare "apples and apples," let alone "apples and oranges." The line item on Page 6 defied comparison and other line items presented significant comparison problems. After a review by Corrections' General Services Specialist Bob Sandall, it was determined that it was to the agency's advantage, as well as advantageous to the competitive bidding process, to rebid on more general specifications instead of specifications solely geared to one single model of one type of baler already owned by the agency, a McDonald single phase baler. For the foregoing reasons, Corrections elected to reject all bids received in response to ITB 90-Region-001 and rebid the item so as to broaden the eligibility base through new specifications, thereby ensuring that more than a single manufacturer could compete while making line item comparisons by the agency possible. Line item comparisons were considered advantageous to all potential bidders and to the agency and essential to a fair competitive bidding process. Considering purely bottom-line cost, Petitioner Solid Waste was the low bidder on initial ITB No. 90-Region-001 if its mathematical error were ignored and its bid were recorded as $23,960.00 instead of as $35,970.00. There were apparently some other problems with Solid Waste's bid response. These were not clearly addressed by any witness' testimony, but it is apparent that the requested manufacturer's specification sheet was included with Solid Waste's response to ITB 90-Region-001. Corrections did not reach any of the potential bid defects of Solid Waste because the agency elected to discard all the bids almost immediately. Rule 13A-1.002(9) F.A.C. provides that an agency shall reserve the right to reject any and all bids and shall so indicate in its invitation to bid. Corrections followed this requirement in General Condition 10 of ITB No. 90- Region-001, which provides in pertinent part, as follows: As the best interest of the State may require, the right is reserved to reject any and all bids . . Bob Sandall and Barbara Stephens redrafted the bid specifications for the recyclable baling machine more broadly, primarily to encourage greater competition of bidders. Corrections properly published these new specifications in ITB No. 90-Region-001 on or about September 18, 1989. Bids were to be opened on October 3, 1989. On October 3, 1989, the bids submitted in response to ITB No. 90- Region-001 were opened and checked for completeness. Upon opening the bid packet submitted by Petitioner Solid Waste, Corrections personnel discovered that the manufacturer's specification sheet which had been required in both initial ITB No. 90-Region-001 and in rebid ITB No. 90- Region-001R was missing. Based on the missing specification sheet, Petitioner's bid on ITB No. 90-Region- 001R was rejected as unresponsive. General Condition 7 in ITB 90-Region-001R provided in pertinent part: Bidder shall submit with his bid, cuts, sketches, and descriptive literature and/or complete specifications. Reference to literature submitted with a pervious bid will not satisfy this provision. The State of Florida reserves the right to determine acceptance of item(s) as an approved equivalent. Bids which do not comply with these requirements are subiect to reiection. (Emphasis supplied) Special Condition VI of ITB 90-Region-001R, "Submission of Mandatory Forms/Literature," further provided that: 5. Complete Technical Data on items other than as specified shall be provided with bid by the vendor, for evaluation purposes, otherwise bid will not be considered. Nowhere in ITB 90-Region-001R is there any suggestion that responses thereto are supplemental to those filed for ITB 90-Region-001 or that "carryovers" or "reactivations" of earlier ITB 90-Region-001 responses would be considered. Corrections rejected other bidders' responses for other acts of non- responsiveness, and it was not necessary to waive any condition in order to award the bid to any of the bidders who were in full compliance with ITB 90- Region-001R. Petitioner timely filed a formal written protest to Corrections' bid tabulation of ITB 90-Region-001R on October 23, 1989. In this protest, Petitioner also included its only and untimely challenge to the agency's rejection of all bids for ITB 90-Region-001.
Recommendation Upon the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Corrections enter a Final Order dismissing Petitioner's protest and ratifying its rejection of all bids for ITB 90-Region- O01R and its tabulation of bids for ITB 90-Region-001R. DONE AND ENTERED this 7th day of February, 1990, in Tallahassee, Florida. ELLA JANE P. DAVIS 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 7th day of February, 1990. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 89-5854BID The following constitute specific rulings pursuant to Section 120.59(2) F.S. upon the parties' respective proposed findings of fact (PFOF): Petitioner's PFOF: 1. is accepted except for the ultimate conclusion of law. See Conclusions of Law. 2-3, 5-7 are rejected as mere legal argument or proposed conclusions of law. See Conclusions of Law. 4 is rejected as characterization of testimony. Respondent' s PFOF: 1-7 are accepted. COPIES FURNISHED: W. K. Lally, P.A. 6160 Arlington Expressway Jacksonville, Florida 32211 Perri M. King Assistant General Counsel Department of Corrections 1311 Winewood Boulevard Tallahassee, Florida 32399-2500 Courtesy copy to: Richard L. Dugger, Secretary Thomas W. Riggs, President Department of Corrections Municipal Sales and Leasing 1311 Winewood Boulevard Inc. Post Office Box 90306 Tallahassee, Florida 32399-2500 Lakeland, Florida, 33804 Louis A. Vargas, General Counsel Department of Corrections 1311 Winewood Boulevard Tallahassee, Florida 32399-2500
Findings Of Fact During March 1988, the Respondent issued an Invitation to Bid by which it sought to lease 17,973 net usable square feet of office space to be located within a specified geographic area in Tampa, Florida, under a nine year lease with two additional three year option periods. This Invitation to Bid is referred to as Lease Number 590:1927. Three bids were received in response to the Invitation to Bid, and they were opened on May 13, 1988. Bids were received from the Petitioner, 8900 Centre, Ltd., and the Allen Morris Management Company. All bidders were determined to be responsive to the Invitation to Bid. Despite the fact that petitioner submitted the lowest bid, Respondent notified Petitioner by letter dated June 10, 1988, of its intent to award Lease Number 590:1927 to 8900 Centre, Ltd., as the lowest and best bidder. Petitioner has timely filed its protest seeking review of that decision. It is undisputed that Petitioner submitted the lowest bid. For the first year of the lease, Petitioner bid $7.85 per square foot, while 8900 Centre bid $7.95 per square foot. Thereafter, Petitioner proposed a yearly increase of 50 cents per square foot, reaching $11.85 per square foot in the ninth year of the lease, while 8900 Centre proposed annual increases of approximately 75 cents, reaching $14.00 per square foot in the ninth year. This equates to an actual dollar difference over the nine year term of approximately 185,000. However, using a present value methodology and a present value discount rate of 8.81 percent referred to on page 17 of the bid submittal form, the present value difference in these two bids is approximately $1,000 per month, which would result in a present value difference between Petitioner and 8900 Centre of approximately $108,000 over the nine year period. Neither the Invitation to Bid, bid specifications, nor the actual bids were offered into evidence. One page of the bid submittal form, designated as page 17 of 18, was offered and received in evidence. This portion of the bid submittal form states that the "successful bid will be that one determined to be the lowest and best." It also sets forth evaluation criteria, and assigns weights to each criteria. The evaluation criteria include associated fiscal costs (35 points), location (40 points) and facility factors (25 points) . A synopsis of bids was also offered and received in evidence showing the points awarded to each bidder by the Respondent's bid evaluation committed. Out of a possible 100 points, 8900 Centre received 95.17 points, while Petitioner received 82.25 points and the Allen Morris Management Company received 70.67 points. Petitioner asserts that the members of the evaluation committee were not qualified or knowledgeable in basic construction, design and engineering principles, and therefore could not competently evaluate the bids submitted. However, Petitioner did not offer competent substantial evidence to support this contention. Only the chairperson of the committee, Susan Jennings, was called to testify, and she appeared thoroughly knowledgeable in the bid process, the needs of the agency, the bid requirements and the representations made to the committee members by each bidder, including Petitioner, when the committee made its site visit to each location. Since the actual Invitation to Bid, bid specifications, and evidence about the other committee members were not introduced, it is not possible to know what the specific duties of the committee were, how they were to carry out their duties their qualifications and training, and whether they failed to competently carry out these duties, as alleged by Petitioner. Despite Petitioner's lower bid, Respondent awarded this lease to 8900 Centre, Ltd., based upon the evaluation committee's determination assigning 8900 Centre the highest number of evaluation points. Out of a possible 35 points for fiscal costs, Petitioner received 34 and 8900 Centre received 31.5. Thus, Petitioner's status as low bidder is reflected in the points awarded by the committee. Since neither the bid invitation or specifications were introduced, no finding can be made as to whether the difference between these two bidders comports with any instructions or directions provided by the agency to potential bidders, or whether this difference of 2.5 points on this criteria reasonably reflects and accounts for the dollar difference in these two bids. Petitioner received 34.75 points out of a possible 40 points on the general evaluation criteria "location," while 8900 Centre received the full 40 points. Within this criteria, there were three subcategories, and on the first two subcategories (central area and public transportation) there was an insignificant difference of less than one-half point between Petitioner and 8900 Centre. The major difference between these two bidders which accounts for their significant difference on the location criteria, was in the subcategory of environmental factors, in which Petitioner received 15.17 points and 8900 Centre received the full 20 points. Petitioner did not present competent substantial evidence to discredit or refute the committee's evaluation in the subcategory of environmental factors. To the contrary, the only testimony from a committee member was that of Susan Jennings, and according to her, Petitioner failed to explain the availability of individual air conditioning and heating controls, or the possibility of separate program entrances, which could be made available under its bid. Although Petitioner sought to explain at hearing that these desires of the agency could be accommodated in its bid, there is no evidence that such an explanation was provided in its bid or during the bid process when the evaluation committee visited the Petitioner's site. The committee was aware, however, that 8900 Centre would provide individual heating and air conditioning controls, as well as separate outside entrances for the three programs which would occupy the leased space. Additionally, the committee was concerned, according to Jennings, that parking areas at Petitioner's facility were more remote and removed from the building entrance than at 8900 Centre, and were somewhat obscured by trees and shrubbery, thereby presenting a potential safety concern for employees working after dark. Finally, every employee would either have a window or window access at 8900 Centre, while it was not explained that Petitioner's site would offer a similar feature. Thus, Petitioner failed to establish that the evaluation committee erred in assigning a significantly greater number of points for environmental factors to 8900 Centre than to Petitioner. The evidence reflects a reasonable basis for this difference. The other significant difference between these two bidders was in the subcategory for layout and utilization under the evaluation criteria "facility." Petitioner received 13.67 points while 8900 Centre received a full 20 points. Jennings explained that the separate outside entrances leading directly into the three programs that would occupy this space was preferred to a single reception area for all three programs. Petitioner offered the single reception area in its bid and site visit presentation, while 8900 Centre made it clear that each program would have its own entrance. Since these programs do not have a receptionist position, and none wanted to give up a secretarial position to serve as receptionist for all three programs, the committee did not consider the single reception area entrance to be desirable. Additionally, Petitioner's facility was a two-story building, while 8900 Centre is a single story facility. Jennings explained that the committee considered a ground level facility to be preferable to a two story building, particularly since the Medicaid program was to occupy the major portion of this space. The Medicaid program would have to be split up at Petitioner's facility, either in two separate buildings or on two levels of the same building, while at 8900 Centre, Medicaid could be accommodated in one, single story building, with the other two programs in a second, single story building. Finally, parking at 8900 Centre was directly next to, and outside the entrance of the building, while Petitioner offered to make assigned spaces available in a general parking area which serves its entire 100,000 square foot complex. The parking offered by Petitioner is more remote than that offered by 8900 Centre, and would be less secure at night due to a greater distance from the building entrances and the parking lot. Thus, Petitioner failed to establish that the committee erred in assigning a significantly greater number of points for layout and utilization to 8900 Centre than to Petitioner. There is a reasonable basis for this difference, according to the evidence in the record.
Recommendation Based upon the foregoing, it is recommended that Respondent enter a Final Order dismissing Petitioner's protest to Lease Number 590:1927. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 9th day of December 1988. DONALD D. CONN Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1050 Filed with the Clerk of the Division of Administrative Hearings this 9th day of December 1988. APPENDIX (DOAH Case Number 88-3765 BID) Rulings on Petitioner's Proposed Findings of Fact: Adopted, in part, in Finding of Fact 1, but Rejected in Finding of Fact 10, and otherwise as not based on competent substantial evidence in the record. Adopted in Finding of Fact 5. 3-5. Adopted in Finding of Fact 4, but Rejected in 7. 6-7. Rejected in Finding of Fact 8. Rejected in Finding of Fact 10, and otherwise as not based on competent substantial evidence in the record. Rejected in Findings of Fact 9 and 10, and otherwise as not based on competent substantial evidence. Rulings on the Respondent's Proposed Findings of Fact: Adopted in part in Finding of Fact 1, but otherwise rejected as not based on competent substantial evidence. Adopted in Finding of Fact 4. 3-4. Adopted in part in Findings of Fact 5 and 6, but otherwise rejected as not based on competent substantial evidence in the record of this case. Adopted In Findings of Fact 5, 7-10. Adopted in Finding of Fact 5. Adopted in Finding of Fact 7. Adopted in Finding of Fact 8. Rejected as irrelevant and unnecessary since the point difference in this subcategory is insignificant. Adopted in Finding of Fact 9. 11-12. Adopted in Finding of fact 10. COPIES FURNISHED: Michael V. Giordano, Esquire 7821 North Dale Mabry Suite 100 Tampa, Florida 33614 Jack Farley, Esquire W. T. Edwards Facility 4000 West Buffalo Fifth Floor, Room 520 Tampa, Florida 33614 Sam Power, Clerk Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 Gregory Coler, Secretary Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700 John Miller, General Counsel Department of Health and Rehabilitative Services 1323 Winewood Boulevard Tallahassee, Florida 32399-0700
Findings Of Fact After its initial review of the bids, Respondent determined that Petitioner was the apparent low bidder, with a total bid of $344,971.53. Subsequently, however, it found an inconsistency in one of Petitioner's item prices and recomputed the subtotal which had the effect of increasing Petitioner's bid to $346,851.53. As a result of this recomputation, Intervenor became the apparent low bidder with its bid of $346,371.06. Respondent discovered that Intervenor had also made a similar error in one of its item prices which, had the subtotal been recalculated, would have increased Intervenor's bid by over $12,000. However, Respondent waived the error and allowed Intervenor's bid to stand. Respondent's bid forms specify various quantities of material required. Each quantity listed is followed by three columns which the bidder must complete. The first column is the unit bid in words (e.g. five dollars and no cents). The second column is the unit bid in numbers (e.g. $5.00). The final column, referred to as the "extension" is the total bid on the item in numbers (e.g. 30 units required times $5.00 per unit equals $150.00) Respondent's item number 10275 specified 1,890 construction signs. Petitioner entered one dollar and fifty cents in the unit bid (words) column, followed by $1.50 in the unit bid (numbers) column. Petitioner's extension column entry was $945.00. Respondent determined that 1,890 signs times one dollar and fifty cents each totalled $2,835.00, rather than $945.00, and raised Petitioner's bid accordingly. Respondent's item number 285710367 specified 7,070 square yards of material. Intervenor entered twelve dollars and no cents in the unit bid (words) column followed by $12.00 and $10.25 in the unit bid (numbers) column. A black line was drawn through the number $12.00, but was not initialed. Intervenor's extension column entry was $72,467.50. Here, Respondent determined that the $10.25 unit price should be permitted since 7,070 square yards times $10.25 did, if fact, equal the stated extension price. Using red ink, Respondent drew a second line through the number $12.00, and initialed this change. Respondent also drew lines through the words twelve (dollars) and no (cents), and wrote the words ten (dollars) and twenty-five (cents) and initialed this correction. Respondent's published policy on bid procedures is contained in its Standard Specifications Manual. Section 3-1 provides in part: In the event of any discrepancy in the three entries for the price for any item. the unit price as shown in words shall govern unless the extension and the unit price shown in figures are in agreement with each other, in which case they shall govern over the unit price shown in words. Respondent applied the above procedure to reject Petitioner's extension price on the signs since it did not agree with the unit price in figures or in words. Respondent applied the above procedure to accept Intervenor's extension price on the material since the $10.25 unit price in figures agreed with the extension. Acceptance of the $10.25 unit price figure (rather than the other entry of $12.00) was essential since no attempt had been made to change the twelve dollar unit price in words. Respondent's policy on bid procedures as set forth in its Standards Specification manual requires initialling of all changes made by the bidder. Section 2-5.1 provides in part: In case a change is made in a word or figure after it has been written in ink or typewritten, the bidder shall write his initials by the change. Intervenor failed to initial the change in its unit price figure. However, Respondent did not consider this to be a significant error and accepted the uninitialed change. Respondent's Standards Specifications Manual, Section 3-1, provides in part: Until the actual award of the contract, however, the right will be reserved to reject any or all proposals and to waive technical errors as may be deemed best for the interest of the State. This policy permits Respondent to reject either or both of these bids because of the errors discussed herein. Conversely, Respondent could consider either or both errors to be merely technical errors and waive them. Respondent's testimony and documentary evidence demonstrated that it does not enforce the policy requiring initialling of corrections. Additionally, Respondent's evidence established that it rigorously applies the procedure in Section 3-1 requiring the unit price in words to prevail where there are discrepancies except when the unit price in numbers and the extension agree. Respondent argues that the unit price figure is critical since the State may wish to order more of a given item and would not want to be bound by an erroneously high unit price. However, a stated unit price would not be binding where there is an error. Rather, the presumably correct extension price could be divided by the bid quantity to determine the correct unit price. The primary purpose of the policy which requires agreement of numbers and initialling of corrections is the prevention of conspiracy between bidders and State employees to alter bids. A further policy consideration, which is the stated basis for waiver of technical errors, is the furtherance of State interest. See Section 3-1, quoted above. In this regard, it should be noted that since Petitioner's original bid is the lowest, acceptance thereof would be in the interest of the State.
Recommendation Based on the foregoing, it is RECOMMENDED: That Respondent enter a Final Order rejecting existing bids and reissuing its bid proposal. DONE and ENTERED this 16th day of February, 1984, in Tallahassee, Florida. R. T. CARPENTER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 16th day of February, 1984. COPIES FURNISHED: Carl R. Pennington, Jr., Esquire 325 John Knox Road, Suite L-101 Tallahassee, Florida 32303 Mark A. Linsky, Esquire Department of Transportation Haydon Burns Building 605 Suwannee Street Tallahassee, Florida 32301 Ronald W. Brooks, Esquire 863 West Park Avenue Tallahassee, Florida 32301 Paul Pappas, Secretary Department of Transportation Haydon Burns Building Tallahassee, Florida 32301 =================================================================
Findings Of Fact State Project No. 46090-3511 (the project) is for construction of the West Bay Bridge on State Road 79 in Bay County, Florida. Competitive bids on the project were solicited in February, 1990. The bid letting on the project was held in March, 1990. The Petitioner, Fairchild, the Hardaway Company and ten other contractors bid on the project. The Hardaway Company submitted the lowest bid on the project in the amount of $9,487,258.17. Fairchild submitted the next lowest bid in the amount of $9,835,279.34. Divergent Unit Prices and Imbalances. The part of the Hardaway Company's bid relating to construction of the foundation for the approaches to the bridge (the "structural bid") is obviously below reasonable cost in several respects. The contract specifications require the use of sand fill, shell fill, reinforcement grid (biaxial type 2), and Class III (seal) concrete. The Hardaway Company's unit prices for these items were, respectively, one dollar per cubic yard for the sand fill, fifty cents per cubic yard for the shell fill, twenty-five cents per square yard for the reinforcement grid, and ten cents per cubic yard for the Class III seal concrete. As a result, the Hardaway Company's bid for these items is obviously significantly below reasonable cost and approximately $95,500 below what Fairchild bid for the same portion of the contract. In contrast to the sand fill, shell fill, reinforcement grid and Class III concrete, the Hardaway Company's bid on some of the other parts of the structural bid were relatively high. The reinforcing steel for the substructure (Item 415-1-5) was bid at approximately twice reasonable cost (80 a pound versus, e.g., 42 in Fairchild's bid), resulting in $609,936.80 attributable to that part of the bid versus, e.g., $320,216.82 for Fairchild. The statistical average (the DOT's so-called "average 2") for the other serious bidders under this item also was 42 a pound. The Hardaway Company also bid obviously in excess of reasonable cost for the lump sum item of mobilization for pile installation--$600,000 versus $125,000 in Fairchild's bid and less in the bids of several of the others bidders. (The statistical average for the other serious bidders under this item was $225,000.) But the Hardaway Company bid only $60,000 for the lump sum item for removal of existing structures (versus $160,000 in Fairchild's bid) and only $30,000 for the lump sum item for removal and disposal of fender system (versus $110,000 in Fairchild's bid). The portion of the Hardaway Company's bid attributable to mobilization for the roadway work is significantly less than the Fairchild bid under this item ($200,000 versus $375,000) and partially counterbalances the excess in the part of the Hardaway bid for mobilization for the pile installation. The portion of the Hardaway Company's bid attributable to clearing and grubbing also was high, at $20,000 an acre versus a statistical average of $4,200 an acre for the other serious bidders, resulting in $216,000 for the Hardaway Company bid versus, e.g., $32,400 for the Fairchild bid and the $45,360 statistical average. DOT Review Procedures. Section 2-6 of the DOT's Standard Specifications applicable to the project provides: 2-6 Rejection of Irregular Proposals. A proposal will be subject to being considered irregular and may be rejected if it shows omissions, alterations of form, additions not called for, conditioinal or unauthorized alternate bids, or irregularities of any kind; also if the unit prices are obviously unbalanced, either in excess of or below the reasonable cost analysis values. The DOT is in the process of formulating a policy on the use of the Technical Review Committee in the bidding process. A proposed procedure has been developed, which has not yet been made final and has not yet been signed by the Secretary of the DOT, under which the Technical Review Committee would review the low bid on each contract, among other things not applicable to this case, for "any significant irregularities in unit bid prices" and for "unbalanced bidding." The DOT has not yet defined "any significant irregularities in unit bid prices" or "unbalanced bidding" for purposes of defining the event that triggers review by the Technical Review Committee. The DOT Director of the Office of Construction, Robert Buser, is of the opinion that the unit prices the Hardaway Company bid for the sand fill, the shell fill, the reinforcement grid and the Class III seal concrete are "significant irregularities in unit bid prices." On the other hand, the DOT's Preliminary Estimates Engineer, Robert Griner, who, unlike Buser, is a member of both the Technical Review Committee and its Preliminary Technical Subcommittee, and is of the opinion that the Hardaway bid for the sand fill, the shell fill, the reinforcement grid and the Class III (seal) concrete are "mathematical imbalances," not "significant irregularities in unit bid prices," which he would define as bids that omit a unit price, whose numerical values do not match words used to express the values, or that are not signed. Under Griner's approach, which was followed in this case, the Preliminary Technical Subcommittee looks at "mathematical imbalances" to see if they are "material imbalances." If the Preliminary Technical Subcommittee decides that it is not a "material imbalance," it simply reports this finding at the outset of the meeting of the Technical Review Committee, which accepts the finding and does not itself consider the matter any further. Only if the Preliminary Technical Subcommittee reports a "material imbalance" does the Technical Review Committee further consider the question. Front-end Bidding. Under the DOT contract for the project, like other items in the specifications, mobilization and land clearing and grubbing are paid in installments as the work proceeds. But, unlike the other items, all of the portion of the contract attributable to mobilization and land clearing and grubbing is paid by the time the entire project is half completed. Similarly, a contractor is paid for reinforcement steel (substructure) when it is delivered to the site. As a result, by shifting dollars in a bid to these "front-end," lump sum items, a contractor can manipulate the bid process and contract to reasonably insure himself of early payment of these inflated items regardless what may happen to the project later. In analyzing these front-end, lump sum items, Griner treated them (along with the unreasonably low bids on the sand fill, shell fill, reinforcement grids and C III seal concrete) as "mathematical imbalances." Following the guidance of a Federal Highway Administration (FHWA) memorandum, dated May 16, 1988, on the subject of "Bid Analysis and Unbalanced Bids," Griner analyzed the Hardaway bid to be sure it would not be susceptible to cost overruns (it was not) and to be sure the quantities were correctly estimated (they were). He also analyzed the additional cost to the DOT of paying the Hardaway Company early (by the half way point of the project) for the inflated front-end items to determine whether the "mathematical" imbalance was "material," i.e., whether "the mathematically imbalanced bid will result in the lowest ultimate cost to the Government." Based on a twelve percent interest rate, Griner calculated that the inflated front-end items would cost the DOT approximately an additional $98,000, 1/ still much less than the difference between the low Hardaway bid and any other bid. Based on this calculation, Griner concluded that the "mathematical imbalance" in the Hardaway bid was not a "material imbalance" and did not require the award of the bid to Fairchild or one of the other bidders. Griner overlooked and did not apply another portion of the method of analysis in the FHWA memorandum on "Bid Analysis and Unbalanced Bids" that states: There are numerous reasons why a bidder may want to unbalance his/her bid on a contract. One reason is to get more money at the beginning of the project. The bidder does this by overpricing the work done early in the project. This is called "front loading" the contract. The leading case in the "front loading" area is Matter of: Riverport Industries, 64 Comp. Gen. 441 (1985). Here the Comptroller General held that if the bid is front loaded, regardless if it is the lowest bid, it "should be viewed as materially unbalanced since acceptance of the bid would result in the same evils as an advance payment. An advance payment is prohibited by law." The "front loading" may also be materially unbalanced due to the cost of money that must be paid out early versus over the normal construction fo the project. Under the Hardaway Company bid, the pile mobilization, the land clearing and grubbing, and the reinforcement steel (substructure) parts of the bid are "front-ended." 2/ Under the method of analysis suggested by the FHWA memorandum, the Hardaway Company would be paid approximately $428,000 in "advance payments" under these two items if it is awarded the contract. Approximately $375,000 in pile mobilization, $183,600 in land clearing and grubbing, and $289,700 in the reinforcement steel were shifted to these front- end items from the unbalanced sand fill, shell fill, reinforcement grid, and Class III (seal) concrete items. These dollars The shifted dollars are estimated by taking the difference between the statistical average for these items and the Hardaway bid on them. Since roiughly half of the shifted dollars would be paid earlier than they would be paid if they were bid under the sand fill, shell fill, reinforcement grid and Class III (seal) concrete items, the amount of "advance payment," under the FHWA analysis would be approximately $428,000. Griner did not explain why he only followed part, but not all, of the method of analysis suggested by the FHWA memorandum, other than to say he overlooked it. But he also testified that it is common practice for contractors to submit mathematically unbalanced bids, and the DOT always analyzes them the way he did in this case. Indeed, in the March, 1990, bid letting, Griner found "mathematical imbalances" in 21 of the 29 low bids but no "material imbalances." The Fairchild bid also contains "mathematical imbalances." It also "front-ends" several items. The total dollar value of the "front-ending" in the Fairchild bid (including roadway mobilization) closely approximates that found in the Hardaway bid and, under the FHWA analysis, would result in approximately the same amount of advance payment. Under Section 101-2.2 of the DOT's Standard Specifications for this project, contractors are limited to a maximum of ten percent of the total contract for mobilization. The Hardaway Company's total mobilization bid is within the maximum under the specifications. Notwithstanding the imbalances in the Hardaway bid, and the so-called "advance payments" that would result from the "front-ending" in the Hardaway bid, the Hardaway bid remains the lowest and best bid on the project, and it is the best interest of the DOT and the public to award the contract to the Hardaway Company. Even if the Hardaway Company had bid the sand fill, shell fill, reinforcement grid, and Class III (seal) concrete items exactly as Fairchild did, Hardaway still would be low bidder. "Value Engineering" and Alleged Alternative or Contingent Bidding. Inferences reasonably could be drawn from the evidence that the Hardaway Company may intend to propose to the DOT that the approach to the bridge be re-engineered so as to eliminate the need for the sand fill, the shell fill, the reinforcement grid and the C III (seal) concrete. If the DOT accepts such a proposal, the contract between the DOT and the Hardaway Company would have to be modified. If the re-engineered project were to allow the Hardaway Company to do the job for less than its bid price, half (or, if the proposal is innovative or unique, up to 80%) of the savings would be paid to the Hardaway Company under what the DOT calls "value engineering." Under DOT procedures, "value engineering" proposals are not made or evaluated until after the original contract is signed with the successful bidder. It is not an alternative bid or a contingent bid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Respondent, the Department of Transportation, enter a final order dismissing the bid protest filed by W. R. Fairchild Construction Company, Ltd., and awarding State Project No. 46090-3511 to the Hardaway Company. RECOMMENDED this 30th day of July, 1990, 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 30th day of July, 1990.
The Issue Whether the Department’s action to reject all bids submitted in response to DOT-RFP-20-5003-DAA, relating to asbestos abatement, demolition, and removal services, is illegal, arbitrary, dishonest, or fraudulent.
Findings Of Fact Stipulated Facts (verbatim) The Department is an agency of the State of Florida tasked with procuring the services for Districtwide Asbestos Abatement and Demolition and Removal Services for Right of Way property under the Department’s supervision by law. The Department published a bid solicitation for DOT-RFP-20-5003- DAA, seeking bids to provide District Five Asbestos Abatement and Demolition and Removal Services for FDOT. The RFP included specifications, qualification requirements, instructions on what would be required of responders, a bid price proposal sheet, and the award criteria. Cross Construction and Cross Environmental submitted bids in response to the RFP. Cross Construction’s and Cross Environmental’s bids were evaluated by the Department. There is no debate, challenge, or disagreement raised in the Petitions with regard to the Technical Scores submitted by the responding firms to the RFP, only disagreement on three pay items. On June 15, 2020, the Department’s Selection Committee reviewed and discussed the information presented as to the Technical and Pricing scores of the Responding firms, asked for an additional bid item analysis, and indicated that it would reconvene at a future date for a decision. On June 22, 2020, the Selection Committee reviewed, discussed, and confirmed the recommendation presented by the results of the Technical Review Committee scorings and the Project Manager’s Bid Price analysis and selected Cross Construction and Cross Environmental as Intended Awardees. The Selection committee also found that Johnson’s Excavation and Services Inc., [Johnson] and Simpson Environmental LLC [Simpson] were deemed non-responsive due to irregular, and unbalanced pay items prices. On August 24, 2020, the Department’s Selection Committee decided to cancel the Procurement with the intent to readvertise with adjustments to the Scope and Pricing Structure and decided to reject all proposals. Additional Findings of Fact The “three pay items” referenced in paragraph six of the stipulated facts are the items that ultimately caused the Department to reject all bids in the instant dispute. The three pay items are collectively referred to as mobilization pay items. The RFP directs that bids are to contain two parts. Part I is the technical proposal, and Part II is the price proposal. Section 30.3 of the RFP provides that proposers “shall complete the Bid Price Proposal Form No. 2 and submit [the form] as part of the Price Proposal Package … [and that] [t]he Procurement Office and/or the Project Manager/TRC will review and evaluate the price proposals and prepare a summary of its price evaluation.” Five bidders submitted proposals in response to the RFP. One bidder did not advance beyond the initial review phase because its technical proposal did not meet minimum bid standards. The remaining bidders were CCS, CES, Simpson, and Johnson. Price proposals submitted by each of the remaining bidders were evaluated by the Department. Section 3 of the RFP provides a general outline of the process associated with awarding the contract. The steps are: “Pre-Proposal Conference; Public Opening (Technical Proposals); Price Proposal Opening & Intended Award Meeting; and, Selection Committee Meeting Summarizing Evaluations and Determining Anticipated Award.” The agenda for the “Price Proposal Opening & Intended Award Meeting,” as established by the RFP, provides as follows: Opening remarks of approx. 2 minutes by Department Procurement Office personnel. Public input period – To allow a reasonable amount of time for public input related to the RFP solicitation. At conclusion of public period, the Technical evaluation scores will be summarized. Announce the firms that did not achieve the minimum technical score. Announce the firms that achieved the minimum technical score and their price(s) as price proposals are opened. Calculate price scores and add to technical scores to arrive at total scores. Announce Proposer with highest Total Score as Intended Award. Announce time and date the decision will be posted on the Vendor Bid System (VBS). Adjourn. Section 30.4 b. of the RFP provides that a proposer can be awarded a maximum of 30 points for its price proposal. This section also provides that “[p]rice evaluation is the process of examining a prospective price without evaluation of the separate cost elements and proposed profit of the potential provider.” On June 15, 2020, the selection review committee met publicly for the purpose of opening price proposals and announcing an intended award. Price proposals were opened, and the eligible bidders received the following price scores: CCS - 11.09; CES - 13.22; Johnson - 19.76; and Simpson - 30. In terms of total score, which combined both the technical and price scores, Simpson received a score of 113.00, which was the highest score, followed by CES (107.55), CCS (103.76), and Johnson (101.76). After opening and considering the price proposals of the respective bidders, the selection committee did not announce an intended award at the meeting on June 15, 2020, but instead requested that the project manager “do further analysis on the pay items for any potential imbalance.” The project manager, through a staff member, performed the additional analysis and determined that Johnson and Simpson submitted “irregular, unbalanced pay items” which resulted in their respective bids being deemed non- responsive and thus not eligible for award. The “irregular, unbalanced pay items” are the three mobilization pay items at issue in the instant matter, and are identified on the bid price proposal sheet as items AB200, AB201, and AB202. Simpson bid $400 for item AB200, $100 for item AB201, and $50 for item AB202. Johnson bid $250 for item AB200, $250 for item AB201, and $100 for item AB202. CCS bid $1 for item AB200, $1 for item AB201, and $1 for item AB202. CES bid $1 for item AB200, 75 cents for item AB201, and 50 cents for item AB202. The Department, in evaluating the bidders’ mobilization pay items, considered costs associated with abatement two structures, a 1,500 and 2,250 square feet structure respectively. For the 1,500-square-foot structure, CCS’ AB200 mobilization costs totaled $1,500. For the 2,250-square-foot structure, CCS’ AB201 mobilization costs totaled $2,250. For the 1,500-square-foot structure, CES’ AB200 mobilization costs totaled $1,500. For the 2,250-square-foot structure, CES’ AB201 mobilization costs totaled $1,687.50. For the 1,500-square-foot structure, Johnson’s AB200 mobilization costs totaled $375,000. For the 2,250-square-foot structure, Johnson’s AB201 mobilization costs totaled $562,500. For the 1,500-square-foot structure, Simpson’s AB200 mobilization costs totaled $600,000. For the 2,250-square-foot structure, Simpson’s AB201 mobilization costs totaled $225,000. On June 22, 2020, the selection committee reconvened and announced CCS and CES as intended awardees of the contract. The Department also announced at this meeting that Johnson and Simpson were “deemed non- responsive due to irregular, unbalanced pay item prices.” On June 24, 2020, Simpson filed a Notice of Protest wherein the company informed the Department of its intent to formally protest the intended award of contracts to CCS and CES. On or about July 6, 2020, Simpson filed with the Department its “formal written petition of protest.” Although Simpson’s formal protest is dated July 6, 2020, CCS and CES contend that Simpson’s protest was actually filed on July 7, 2020, thereby making the protest untimely by a day. The Department did not refer Simpson’s formal protest to DOAH for final hearing, but instead considered the issues presented by Simpson in its protest and then attempted to negotiate a resolution with Simpson, CCS, and CES. Those efforts were unsuccessful. The question of the timeliness of the formal bid protest filed by Simpson is not before the undersigned. Nevertheless, the undisputed facts as to Simpson’s protest, as demonstrated by the record herein, are as follows. On June 24, 2020, Simpson filed notice of its intent to protest the RFP. On June 29, 2020, CCS received notice that a bid protest was filed with respect to the RFP. On July 1, 2020, CES filed a public records request “for public records related to the bid protest made to the” RFP. On or about July 6, 2020, Simpson filed its formal written protest with respect to the RFP, and although the evidence is not clear as to the date, it is undisputed that the Department received affidavits from Simpson explaining the factual circumstances surrounding the filing of the company’s formal written protest. On July 15, 2020, the Department notified CCS and CES that “in response to the Formal Written Protest filed by Simpson Environmental Services, the Department will hold a settlement conference” on Friday, July 17, 2020. On July 21, 2020, Simpson, CES, and CCS notified the Department that they “reached an agreed upon settlement proposal.” On August 11, 2020, the Department, after considering the settlement proposal for several weeks, notified Simpson, CES, and CCS that the Department would discuss the RFP at a public meeting to be held on August 24, 2020. As previously noted, it was during the meeting on August 24, 2020, when the Department announced that all proposals received in response to RFP were rejected. CES, on or about July 1, 2020, submitted to the Department a public records request wherein the company sought a copy of documents related to Simpson’s protest. In response to the request, the Department provided CES a copy of the formal written protest filed by Simpson. It is undisputed that the initial copy provided to CES by the Department did not show either the date or time of receipt of the document filed by Simpson. At some point after the settlement conference, the Department provided to CES a date and time stamped copy of Simpson’s formal written protest. There was no evidence presented explaining the circumstances or the process which resulted in the Department providing different copies of Simpson’s formal written protest to CES, and the remaining evidence does not provide a sufficient foundation to reasonably infer that the Department acted with nefarious motives when providing different versions of the documents to CES. Simpson’s formal protest contains the following statement with respect to the price proposal that the company submitted in response to the RFP: Petitioner’s individual bid price items were based in fact, were reasonable and were in conformity with standard industry rates for similar asbestos abatement and demolition and removal projects. Petitioner’s bid price items were also patently similar to bid price items that Petitioner has previously submitted in response to past FDOT proposal requests that ultimately resulted in the corresponding contracts having been awarded to Petitioner. Indeed, Petitioner has a longstanding relationship with the FDOT as Petitioner has previously contracted with FDOT as a vendor performing asbestos abatement services on numerous projects over the course of the past eight years. Petitioner’s price items for bid proposals have remained consistent for each of its past projects with FDOT. Petitioner’s price items for the instant bid proposal did not differ or vary in any material aspect from those proposed by Petitioner for previous projects that FDOT has deemed reasonable. Michelle Sloan works for the Department as a district procurement manager, and was assigned to manage the instant RFP. Ms. Sloan testified that because Simpson protested the Department’s intended decision to award the contracts to CCS and CES, and specifically referenced in its protest “that their bid for mobilization was in conformance with industry standards, as well as previous bids submitted to the agency that were deemed responsive,” she conducted additional review of the Simpson and Johnson bids. Ms. Sloan testified that after reviewing the RFP, the price sheets related thereto, Simpson’s protest, and the additional analysis of the pay items conducted following the June 15, 2020, selection committee meeting, she concluded that material ambiguities existed in the RFP’s mobilization pay items and recommended to the district secretary that the Department “reject all [bids] and re-advertise with a revised pricing sheet and instructions.” On August 24, 2020, the selection committee, following public notice, accepted Ms. Sloan’s recommendation, rejected all proposals, and canceled the procurement with the “intent to re-advertise with adjustments to the Scope and Pricing structure.” A review of the credible evidence demonstrates a rational basis for the conclusions reached by Ms. Sloan and members of the selection committee. Exhibit C of the RFP is titled “Price Proposal/Detailed and Contractual Price Sheet.” The first page of this document provides a general description of the asbestos removal and abatement pay items. The general pay items are as follows: AB100 Fees [as] determined from the Department of Environmental Protection based upon regulated material. AB200 One-time fee necessary to mobilize for full isolation, per parcel, when abatement with isolation is required. AB300 Fees to be charged by square feet for preparation [of] structure before abatement can commence. AB400 Fees to be charged by square feet, to abate asbestos from various surfacing material such as ceiling, walls, beams, plaster, sheetrock and fireproofing using conventional containment methods. AB500 Fees to be charged either by square foot, linear foot or fittings to abate asbestos from various mechanical systems such as boilers, stacks ducts, fittings, pipes, flutes and flanges. AB600 Fees to be charged either by square foot, linear foot or fittings to abate asbestos from various mechanical systems such as boilers, stacks, ducts, pipe, fittings and jackets which involve the use of a Glove bag. AB700 Fees to be charged by square foot, to abate asbestos from various roofing materials such as cement roof shingles, flashing, rolled roof, felts, wood shingles and mobile home coating. AB800 Fees to be charged by square foot or piece to abate asbestos from various materials such as floor tile, mastic adhesive, sheet vinyl, carpet, wood sub- floor, concrete sub-floor, vibrator dampers, wallboard, metal ductwork and sinks with insulation and heat shields (light fixture). AB900 Fees to be charge[d] by landfill for asbestos disposal. The bid price proposal sheet, which is form number 2 of the RFP, provides a listing of specific pay items related to the general “AB ---” items listed in Exhibit C to the RFP. Below is an example of some of the specific pay items listed on the bid price proposal sheet: [See table on next page] Item Number Description (A) Estimat ed Quantit y Unit (B) Unit Pric e Total Bid Amount (A x B) ASBESTOS REMOVAL ABATEMENT AB200 Mobilization for structures less than 2,000 Sq. FT. 1 SQ. FT. AB201 Mobilization for structures [from] 2001 – 5000 Sq. FT. 1 SQ. FT. AB202 Mobilization for structures over 5001 Sq. FT. 1 SQ. FT. AB300 Mask and Seal 1 SQ. FT. AB401 Remove ACM plaster/lathe including all surface materials 1 SQ. FT. AB501 Remove insulation from fittings 1 LF. AB603 Remove insulation from boilers, stacks or ducts piping 1 LF. AB703 Remove roofing cement 1 SQ. FT. AB810 Remove carpet and mastic adhesive 1 SQ. FT. AB820 Remove sinks with insulation 1 SQ. FT. AB901 Non-Friable 1 SQ. FT. General pay item category AB200, as described on Exhibit C, does not reference a “unit of measurement,” but instead notes that items within this category are to be determined on a “one-time – per parcel” basis. When the AB200 general pay item category is compared to the specific pay items for this category enumerated on the bid price proposal sheet (i.e., AB200, AB201, and AB202), it is evident that the unit of measurement “square feet” is listed as the basis for calculating the bid amount for this item when no such unit of measurement is stated for this item on Exhibit C. Comparatively, general pay item categories AB300 through AB800 each expressly references a specific unit of measurement (i.e., square foot, linear foot, or by the “piece”), and these units of measurement carry over to and are consistently reflected on the bid price proposal sheet for the specific pay items enumerated therein. By inserting a unit of measurement (i.e., square feet) in the mobilization pay items listed on the bid price proposal sheet, when the general description on Exhibit C instructs that they are “one-time, per parcel” pay items, the Department created a material ambiguity in the bidding process.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is hereby Recommended that the Department of Transportation issue a final order in Case Nos. 20-4214 and 20-4216 finding that the rejection of all proposals in response to Request for Proposal RFP-DOT-20-5003-DAA was not illegal, arbitrary, dishonest, or fraudulent, and dismissing the two petitions. DONE AND ENTERED this 14th day of December, 2020, in Tallahassee, Leon County, Florida. S LINZIE F. BOGAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 14th day of December, 2020. COPIES FURNISHED: Douglas Dell Dolan, Esquire Florida Department of Transportation 605 Suwannee Street, MS 58 Tallahassee, Florida 32399-0458 (eServed) Richard E. Shine, Esquire Florida Department of Transportation 605 Suwannee Street, MS 58 Tallahassee, Florida 32399 (eServed) Brian A. Leung, Esquire Holcomb & Leung, P.A. 3203 West Cypress Street Tampa, Florida 33607 (eServed) Diane E. H. Watson, Esquire Cross Environmental Services, Inc. Post Office Box 1299 Crystal Springs, Florida 33524-1299 (eServed) Kevin J. Tibault, P.E., Secretary Department of Transportation Haydon Burns Building 605 Suwannee Street, MS 57 Tallahassee, Florida 32399-0450 (eServed) Sean Gellis, General Counsel Department of Transportation Haydon Burns Building 605 Suwannee Street, MS 58 Tallahassee, Florida 32399-0450 Andrea Shulthiess, Clerk of Agency Proceedings Department of Transportation Haydon Burns Building 605 Suwannee Street, MS 58 Tallahassee, Florida 32399-0450 (eServed)
Findings Of Fact On March 1, 1984, Respondent gave notice to qualified contractors that it would receive sealed bids for State Project No. 72000-3541, referred to as Federal-Aid Project No. M 9041(10). This project involves the installation of a computerized traffic control system for the City of Jacksonville. In response to the opportunity to bid, the Department of Transportation received four bids. Petitioner, Winko-Matic Signal Company, was among the bidders. The other bidders were Georgia Electric Company, Traffic Control Devices, Inc., and Sperry Systems Management. The bids of Traffic Control Devices and Sperry Systems were rejected based upon an error in bid tabulations on the part of Traffic Control, a mistake on the quantities page, with the Sperry rejection being based upon a bid bond problem. Traffic Control had been the apparent low bidder with a bid of $1,964,115. Winko-Matic was the second apparent low bidder with a bid of $2,279,604.70. The Department of Transportation had estimated that the total cost of the Jacksonville project would be $ 2,024,680.61. Having discarded the bid of Traffic Control Devices, the Department of Transportation telegrammed Winko-Matic on April 4, 1984, advising Winko-Matic that it was the apparent low bidder for the Jacksonville project. Subsequently, the awards committee of the Department of Transportation met on April 18, 1984, and determined to reject all bids and re-advertise the job. In the course of this meeting the awards committee was told that there were erratic bids received on contract items, pointing to some perceived confusion among the contractors as to requirements of the contract. Discussion was also held on the possibility of establishing a pre-bid conference if the project was re advertised. The awards committee then voted to reject the bids on the basis that the apparent low bidder, Winko-Matic, had submitted a bid which-was 12.6 percent over the Department's estimate, instead of being within 7 percent of the Department of Transportation's pre-bid estimate, a point above which the Department of Transportation in its non-rule policy would call to question to the acceptability of the apparent low bid. In addition to deciding to reject all bids and re-advertise, it was determined that a pre-bid conference should be scheduled at least 30 days prior to the bid-letting date. Winko-Matic was advised that the Department of Transportation's decision to reject all bids by correspondence of May 4, 1984, in which it was indicated that all bids had been rejected based upon the fact that they were too high. In response to this notice of rejection, Winko-Matic, effective May 17, 1984, filed a written notice of protest. The case was subsequently referred to the Division of Administrative Hearings on June 20, 1984, and a final hearing date was established by Notice of Hearing of July 5, 1984. The hearing date in this cause was September 12, 1984. The Jacksonville project in question requires the utilization of what has been referred to "UTCS Enhanced" software. This software package is unique and has only been used in a limited number of locations within the country. Those locations are Los Angeles, California; San Diego, California; Broward County, Florida; and Birmingham, Alabama. Another unique feature within the project design is the use of an associated coaxial computer sys gem. Given the unique nature of this project and the fact that the Department of Transportation had never advertised for bids related to UTCS software, Department of Transportation obtained assistance from a consulting firm, Harland, Bartholomew & Associates. In fulfilling its function Harland gave estimates to include an estimate related to the projected cost of the software, Item 681-102. The Harland estimate for the overall project was $2,143,130 including a $100,000 estimate for the software system. That estimate relating to the software was subsequently adjusted by the Department of Transportation to depict a cost of $13,780. The Department of Transportation estimate was based upon information within its computer related to a system unlike the enhanced software contemplated by the plans and specifications. In other words, the stored information in the Department of Transportation computer was not the same as contemplated by the plans and specifications in the Jacksonville project. Moreover, the initial estimate of Harland was based upon the idea of an extended software system, as opposed to an enhanced software system. Winko-Matic had bid $389,500 for the software in Item 681-102. That estimate was premised upon figures obtained from JHK and Associates, the group which Winko-Matic intended to use as its subcontractor for the enhanced software portion of the project. JHK developed the software and was responsible for systems integration of the Los Angeles, California, project, one of the locations in which UTCS enhanced software has been utilized. JHK premised its estimate for the software hare upon experience in Los Angeles and an evaluation of the tasks to be performed related to the enhanced software. This included general software development activities, hardware innovation, installation costs during the period of acceptance and testing, and the preparation of data base. The JHK bid price was $339,500. Another $50,000 was added to that price related to what the Petitioner describes as its management costs for that item. By June 20, 1984, when a further meeting was held by the awards committee on the subject of the Jacksonville project, it was concluded that the estimate made by the Department of Transportation of $13,780 was not correct, on the topic of the enhanced software. A more reasonable estimate, according to the information imparted in this session, would be $200,000 for enhanced software as called for in this project, with a $100,000 amount being a reasonable estimate had they chosen to use extended software. Adjusting the initial price related to the UTCS enhanced software to reflect a corrected estimate of the Department of Transportation in its original advertised bid, that estimate becomes $2,210,900.61 and its consultant Harland's estimate becomes $2,243,130. With this adjustment, the differential in the estimate made by the Department of Transportation and the Petitioner approaches 3 percent and not the 12.6 percent originally found. The 3 percent is below the threshold of 7 percent used as the policy for determining whether a bid might be rejected as being far beyond the acceptable limits set forth in the Department of Transportation's estimate. In the aforementioned June 20, 1984, awards committee meeting, the Department of Transportation continued to hold the opinion that all bids in the Jacksonville project should be rejected and the matter re-advertised. Although the problem pertaining to the estimate of the cost of the enhanced software package had been addressed, the committee continued to feel that the prices received in the bid letting were erratic Reference was also made to revisions or modifications to the project plan which would be offered if the matter were re- advertised. It was also pointed out that the Federal Highway Administration would concur in the Department's decision to reject all bids and would accept modifications. The awards committee again voted to reject the bids. The matter was again considered by the awards committee on August 31, 1984. On that occasion, it was pointed out that the revisions contemplated by the Department of Transportation, should the matter be re-advertised, would not affect in a substantial way the cost estimate for the project with the exception of Item 680-101, the system control equipment (CPU), which would promote a lower price for the project. The committee determined in the August, 1984, meeting to reject all bids and re-advertise. While the initial notice of rejection of May 4, 1984, had suggested the basis for rejection as being the fact that Petitioner's bid far exceeded the 7 percent allowance for price above the Department of Transportation's estimate of costs, the meetings of the awards committee and the suggestion of the Respondent in the course of the final hearing in this case indicated that there were other reasons for the decision to reject. Those Were: (a) an apparent lack of clarity among bidders regarding specifications for the Jacksonville job, (b) the desire of the Respondent to revise specifications on the Jacksonville project; and (c) a lack of sufficient competition in the bids. In connection with the first of the additional reasons Respondent suggests that variations within the bid responses related to particular line items within the specifications point out a lack of clarity in the project's specifications or confusion by bidders related to those specifications. Respondent did not bring forth any of the bidders who might speak to the matter of possible confusion or misunderstanding concerning some of the bid items. By contrast, the Petitioner's president; the president of JHK & Associates and James Robinson, Harland's project manager for the Jacksonville job, did not find the specifications in the original documents to be confusing. In addition, the testimony of those individuals established the fact that bid variations related to particular line items are not extraordinary and do not establish any apparent confusion by the bidders as to the requirements of those line items. In effect, what the differentials demonstrate are variations related to the manufacture or in-house capabilities of the bidders and an effort to allocate discretionary costs in various places as to line items. Moreover, they might indicate last- minute adjustments in the bid quote prior to the opening and a possible effort by a contractor to enter into a new job market. Finally, they demonstrate offsetting which is the allocation of item prices by a contractor to maximize profits. To do this, a contractor submits high bids on items representing quantities which the contractor feels will increase after the contract is awarded and submits low bids on items representing quantities which are not likely to change. In summary, while the Department of Transportation in its presentation expressed some concern about the variations in the pricing in the bid quotations offered by the respective bidders in this project, its suspicions on the question of the possible clarity of its specifications were not confirmed and are not convincing. On the topic of revisions which the Department of Transportation would offer if the matter were re-advertised, with one exception those matters appear to be items that could be attended through change orders or supplemental agreements. They are not matters which necessarily must be addressed through a rejection of all bids and a re-advertising of the project. The lone exception to this is the possibility that the Department of Transportation may not be able to protect its proprietary rights in the enhanced software which is being developed for the project, under the terms of the present bid documents. Given that uncertainty, the Respondent would wish to re-advertise the project and make certain that its proprietary interests are protected. Finally, Respondent has alluded to the fact that the Jacksonville project should be re-advertised in view of the lack of competition in the initial letting. Only four bidders expressed an interest in this project at the time of the first letting. Of those, two bidders were found to be responsive. While this is a low number of bidders, there does not appear to be any agency practice on the part of' the Department of Transportation to the effect that this number of bidders would not be accepted. Moreover, no indication has been given that should the matter be re-advertised a greater number of bidders would express an interest than was the case in the first letting. Consequently, this reason for bid rejection is not acceptable. If Respondent did not reject the bids and re-advertise the project, Winko-Matic would be the successful bidder in the Jacksonville project.
The Issue The issue for determination is whether Respondent acted fraudulently, arbitrarily, illegally, or dishonestly in selecting Intervenor as the lowest bidder for a contract to supply the state with lamps valued at $3,692,499.
Findings Of Fact The Parties Respondent is the state agency responsible for soliciting bids to establish a contract for the purchase of large lamps by state agencies and other eligible users. Petitioner is a Florida corporation and the incumbent vendor under similar contracts for the preceding 10 years. Petitioner does not manufacture lamps. Petitioner sells lamps manufactured by Osram-Sylvania ("Sylvania"). Intervenor is an Ohio corporation doing business in Florida. Intervenor manufactures the lamps it sells. The ITB On March 15, 1996, Respondent issued Invitation To Bid Number 39-285- 400-H, Lamps, Large, Photo and STTV (the "ITB"). The purpose of the ITB is to establish a 24 month contract for the purchase of Large Lamps (fluorescent, incandescent, etc.), Photo Lamps (audio visual, projection, flash), and Studio, Theatre, Television, and Video Lamps ("STTV") by state agencies and other eligible users. The contract runs from July 10, 1996, through July 9, 1998. The ITB estimates the contract price at $3,692,499. The ITB contains General and Special Conditions. General Conditions are set forth in 30 numbered paragraphs and elsewhere in DMS Form PUR 7027. Special Conditions are set forth in various unnumbered paragraphs in the ITB. General Conditions Paragraphs 5, 11, and 24 of the General Conditions are at issue in this proceeding. The terms of each paragraph are: 5. ADDITIONAL TERMS AND CONDITIONS: No additional terms and conditions included with the bid response shall be evaluated or considered and any and all such additional terms and conditions shall have no force and effect and are inapplicable to this bid. If submitted either purposely through intent or design or inadvertently appearing separately in transmittal letters, specifications, literature, price lists, or warranties, it is understood and agreed the general and special conditions in this bid solicitation are the only conditions applicable to this bid and the bidder's authorized signature affixed to the bidder's acknowledgment form attests to this. 11. QUALITY ASSURANCE: The contractor, during the contract term, upon mutual agree- ment with the Division of Purchasing, will provide reasonable travel and lodging accommodations for one (1) to three (3) government employees to perform an on-site inspection of the manufacturing process(es) and review of the manufacturer's product quality control(s) and total quality manage- ment program(s). The contractor will reim- burse the State for actual transportation cost, per diem and incidental expenses as provided in Section 112.061, F.S. It is the State's desire that the contractor provide demonstration of quality control for improvement rather than post production detection. 24. FACILITIES: The State reserves the right to inspect the bidder's facilities at any reasonable time with prior notice. Included Items Special Conditions in the ITB require bidders to submit prices for "Item 1" and "Item 2" lamps ("included items"). 1/ Item 1 lamps consist of Group 1 and 2 lamps. Group 1 lamps are Large Lamps such as fluorescent, incandescent, quartz, mercury vapor, metal halide, and high-pressure sodium lamps. Group 2 lamps are Photo Lamps such as audio visual, projection, flash, and STTV lamps. The total price for each group is multiplied by a weighted usage factor. The product calculated for Group 1 is added to the product calculated for Group 2 to determine the total price for Item 1 lamps. Item 2 consists of a category of lamps described as "T- 10 Lamps." The total price for Item 2 lamps is determined without application of the weighted usage factor used for Item 1 lamps. The total price for Item 2 lamps is a de minimis portion of the contract price. Special Conditions in the ITB require Respondent to award a single contract for included items to a single bidder. Special Conditions state that, "During the term of the contract established by this bid, all purchases of items will be made from the successful bidder." 2/ Excluded Items Special Conditions require that, "The bidder shall offer a fixed discount from retail prices on all excluded items." Excluded items include high technology lamps. The requirement for a fixed discount on excluded items is not considered in evaluating bid prices for included items. Rather, the requirement is intended to reduce the state's cost for both included and excluded items by assuring a meaningful discount on excluded items. Formatting Requirements Special Conditions prescribe the format in which bids must be submitted. Price lists and authorized dealers' lists are required to be submitted in hard copy and on computer diskette. The format prescribed for computer diskette includes requirements for font and graphics. The Special Conditions state that, "Failure to comply with this requirement will result in disqualification of your bid." The Bids The ITB prohibits the alteration of bids after they are opened. Respondent opened bids on April 10, 1996. Seven vendors submitted bids in response to the ITB. Included Items Four vendors, including Petitioner, submitted a bid for both Item 1 and Item 2 lamps. Intervenor and two other bidders did not submit a bid for Item 2 lamps. General Conditions Intervenor deleted paragraphs 11 and 24 of the General Conditions from its bid. At the direction of Intervenor's legal department in Cleveland, Ohio, Intervenor's regional sales manager struck through paragraphs 11 and 24 and initialed the deletions. The deletions are consistent with Intervenor's corporate policy. Intervenor routinely objects to contract provisions requiring inspection of Intervenor's facilities. Excluded Items Petitioner's bid includes a fixed discount of 44 percent on excluded items. Intervenor's bid includes a fixed discount of 0 percent. Formatting Requirements Intervenor included the information required by the ITB on the diskette it submitted with its bid. However, Intervenor supplied the information in Courier 12 characters per inch ("cpi") font, not the Courier 10 cpi font prescribed in the ITB. Proposed Agency Action Respondent determined that Intervenor's bid was responsive. The purchasing specialist for Respondent who reviewed each bid to determine if it was responsive failed to observe the deleted paragraphs in Intervenor's bid. The purchasing specialist forwarded those bids determined to be responsive to the purchasing analyst assigned by Respondent to: determine if the lamps offered in each bid met the specifications prescribed in the ITB; and evaluate bid prices. The purchasing analyst noted that paragraphs 11 and 24 were deleted from Intervenor's bid. The purchasing analyst and purchasing specialist conferred. They determined that paragraph 5 of the General Conditions cured Intervenor's deletions without further action. The purchasing analyst correctly determined: that lamps offered by Petitioner and Intervenor met ITB specifications; that Intervenor's bid is the lowest bid for Item 1 lamps; that Petitioner's bid is the second lowest such bid; and that Petitioner's bid is the lowest bid for Item 2 lamps. Petitioner's bid for Item 1 lamps is approximately five percent greater than Intervenor's bid. Respondent proposes to award one contract for Item 1 lamps to Intervenor. Respondent proposes to award a second contract for Item 2 lamps to Petitioner. At 4:00 p.m. on May 20, 1996, Respondent posted its intent to award the contract for Item 1 lamps to Intervenor. Petitioner timely filed its formal protest on June 3, 1996. Respondent did not award a contract for excluded items. Respondent's failure to award a contract for excluded items is not at issue in this proceeding. Arbitrary Respondent's proposed award of a contract to Intervenor for substantially all of the items included in the ITB is a decisive decision that Respondent made for reasons, and pursuant to procedures, not governed by any fixed rule or standard prescribed either in the ITB or outside the ITB. Respondent's proposed agency action is arbitrary. Excluded Items The requirement for bidders to offer a fixed discount on excluded items operates synergistically with the requirement for Respondent to award a single contract on included items to a single bidder. The combined action of the two requirements operating together has greater total effect than the effect that would be achieved by each requirement operating independently. The requirement for a fixed discount on excluded items, operating alone, may not induce a bidder who could receive a contract solely for Item 2 lamps to offer a discount that is as meaningful as the discount the bidder might offer if the bidder were assured of receiving a contract for Item 1 and 2 lamps upon selection as the lowest bidder. 3/ By assuring bidders that a single contract for Item 1 and 2 lamps will be awarded to a single bidder, the ITB creates an economic incentive for bidders to provide a meaningful discount on excluded items. Respondent frustrated the synergy intended by the ITB by applying the requirements for a fixed discount and for a single contract independently. Respondent penalized the bidder conforming to the requirement for a fixed discount on excluded items by awarding only a de minimis portion of the contract to the bidder. Respondent rewarded the bidder not conforming to the requirement for a fixed discount on excluded items by awarding substantially all of the contract to that bidder. If Respondent elects to purchase all excluded items from Petitioner, Respondent will have used the contract for Item 1 lamps to induce a meaningful discount from Petitioner without awarding Petitioner with the concomitant economic incentive intended by the ITB. Such a result frustrates the ITB's intent. Paragraph 5 Respondent's interpretation of paragraph 5 fails to explicate its proposed agency action. Respondent's interpretation of paragraph 5: leads to an absurd result; is inconsistent with the plain and ordinary meaning of the terms of the ITB; and is inconsistent with Respondent's actions. Respondent's interpretation imbues paragraph 5 with limitless curative powers. Respondent's interpretation empowers paragraph 5 to cure the deletion of all General Conditions in the ITB whether stricken by pen or excised with scissors. Respondent's interpretation of paragraph 5 would transform a bid containing no General Conditions into a responsive bid. Respondent's interpretation of paragraph 5 is inconsistent with the plain and ordinary meaning of its terms. Paragraph 5 operates to cure "additional" terms. It does not operate to restore deleted terms. Respondent's interpretation of paragraph 5 is inconsistent with Respondent's actions. Respondent did not rely on paragraph 5 to cure Intervenor's deletions without further action. Respondent took further action to cure the deletions. Further Action On the morning of May 20, 1996, the purchasing analyst for Respondent telephoned Intervenor's regional sales manager. The purchasing analyst demanded that Intervenor accept the conditions Intervenor had deleted from its bid by submitting a letter of acceptance before the bid tabulations were posted at 4:00 p.m. on the same day. The regional sales manager contacted Intervenor's corporate headquarters in Cleveland, Ohio. Intervenor authorized the regional sales manager to accept the deleted paragraphs. By letter faxed to Respondent at approximately 3:20 p.m. on May 20, 1996, Intervenor accepted the paragraphs it had previously deleted. The letter stated that, "GE Lighting [will accept] the Contract Conditions noted in Paragraphs 11 and 24 of the Lamp Quotation." [emphasis not supplied] At 4:00 p.m. on May 20, 1996, Respondent posted the bid tabulation form. The bid tabulation form stated that the "award is contingent upon General Electric's acceptance of all the terms in conditions (sic)" in the ITB. Respondent argues that the purchasing analyst who contacted Intervenor on the morning of May 20, 1996, exceeded her authority. Respondent characterizes the word "contingent" in the bid tabulation form as "poorly written" and a "bad word." Agency Construction Of ITB Terms Respondent construes terms in the ITB in a manner that is inconsistent with their plain and ordinary meaning. The ITB requires that, "The bidder [shall] offer a fixed discount from retail price list on all excluded items." [emphasis supplied] Respondent interprets the quoted provision as meaning the bidder may offer such a fixed discount if the bidder elects to do so. The purpose of the ITB is to establish "[a] 24 month contract" to supply large lamps to the state. [emphasis supplied] Respondent interprets the quoted provision as meaning that the purpose of the ITB is to establish two contracts. The ITB states that, "During the term of the contract established by this bid, all purchases of items [will] be made from [the] successful bidder." [emphasis supplied] Respondent interprets the quoted provision as meaning that purchases of some items will be made from one successful bidder and that purchases of other items will be made from a second successful bidder. The ITB states that the contract "[shall] be made statewide on an all or none basis" to the responsive bidder who satisfies the conjunctive requirements for: "[the] lowest "Award Figure Item (1; [and] lowest Award figure for Item (2." [emphasis supplied] Respondent interprets the quoted provision as meaning that separate contracts may be made statewide on less than an all or none basis to separate responsive bidders who satisfy the disjunctive requirements for either the lowest bid for Item 1 lamps or the lowest bid for Item 2 lamps, or both. The ITB requires offers to be submitted for all items listed within a group for a bid to qualify for evaluation. Respondent interprets the requirement as meaning that a bidder who does not qualify for evaluation for all of the groups in the contract nevertheless qualifies for evaluation for the contract. Finally, the ITB states that failure to comply with the formatting requirements for the diskette "[will] result in disqualification of your bid." [emphasis supplied] Respondent interprets the quoted language to mean that failure to comply with prescribed formatting requirements may result in disqualification of a bid. The interpretations of the quoted terms proposed by Respondent, individually and collectively, frustrate the purpose of the ITB. They also ignore material requirements of the ITB. Material Deviation Respondent deviated from the rule or standard fixed in the ITB in several respects. First, Respondent altered the bid evaluation procedure prescribed in the ITB. Second, Respondent ignored the requirement to award a single contract to a single bidder. Third, Respondent ignored the requirement that bidders provide a fixed discount on excluded items. Fourth, Respondent ignored the requirement to comply with the formatting requirements prescribed in the ITB. Each deviation from the rule or standard fixed in the ITB is a material deviation. Each deviation gives Intervenor a benefit not enjoyed by other bidders. Each deviation affects the contract price and adversely impacts the interests of Respondent. 4/ 5.5(a) Benefit Not Enjoyed By Others Intervenor enjoyed a benefit not enjoyed by other bidders. Intervenor obtained a competitive advantage and a palpable economic benefit. Respondent altered the bid evaluation procedure prescribed in the ITB. On the morning of May 20, 1996, Respondent disclosed the bid tabulations to Intervenor alone, 5/ gave Intervenor an opportunity that lasted most of the business day to determine whether it would elect to escape responsibility for its original bid, allowed Intervenor to cure the defects in its bid, accepted Intervenor's altered bid, and conditioned the bid tabulations on Intervenor's altered bid. Respondent used a bid evaluation procedure that is not prescribed in the ITB and did not allow other bidders to participate in such a procedure. 6/ In effect, Respondent rejected Intervenor's initial bid, with paragraphs 11 and 24 deleted, and made a counter offer to Intervenor to accept a bid with paragraphs 11 and 24 restored. Intervenor accepted Respondent's counter offer. Respondent excluded other bidders from that process. Respondent gave Intervenor an opportunity to determine whether it would elect: to escape responsibility for its original bid by declining Respondent's counter offer; or to perform in accordance with an altered bid by restoring paragraphs 11 and 24. A bidder able to elect not to perform in accordance with its bid has a substantial competitive advantage over other bidders unable to escape responsibility for their bids. 7/ Respondent awarded substantially all of the contract to Intervenor even though Intervenor failed to provide a meaningful discount on excluded items. Respondent provided Intervenor with a palpable economic benefit. 5.5(b) Bid Price And Adverse Impact On The State Respondent did not award a contract for excluded items. Respondent's proposed agency action allows Respondent to purchase excluded items from either Intervenor or Petitioner. If Respondent were to purchase all of the excluded items it needs from Intervenor, Respondent could pay substantially more for excluded items than Respondent would save from the five percent price advantage in Intervenor's bid for Item 1 lamps. In such a case, Respondent's proposed agency action would effectively increase costs to the state that are inherent, but not stated, in the ITB. 8/ Conversion of incorrectly formatted data to the required font shifts prices to incorrect columns and causes other problems in accessing information in the diskette. Such problems can not be rectified easily but require substantial time and effort. Responsive Bidder Respondent did not award the contract intended by the ITB to the lowest responsive bid. Although Intervenor's bid is the lowest bid for Item 1 lamps, it is not the lowest responsive bid for Item 1 and 2 lamps. Petitioner's bid is the lowest responsive bid for Item 1 and 2 lamps. 9/ Respondent is statutorily required to award the contract to the lowest responsive bidder. 10/ Illegal Intervenor's bid is not responsive within the meaning of Sections 287.012(17), Florida Statutes (1995). 11/ It does not conform in all material respects to the ITB. Intervenor's unaltered bid deletes paragraphs 11 and 24. It does not include a fixed discount on excluded items, does not include a bid for Item 2 lamps, and does not conform to the formatting requirements in the ITB. Section 287.057 requires Respondent to award the contract to the bidder who submits the lowest responsive bid. Respondent has no authority either: to consider bids that are not responsive; or to award the contract to a bidder other than the lowest responsive bidder. Respondent's attempt to engage in either activity is ultra vires and illegal. Minor Irregularities The ITB encourages, but does require, bidders to include quantity discounts for Item 1 and 2 lamps. Petitioner's bid does not include quantity discounts. Petitioner's bid does not fail to conform to material requirements in the ITB. Petitioner does not manufacture Item 1 and 2 lamps. Sylvania manufactures the lamps Petitioner sells. Petitioner has no legal right to require Sylvania to allow inspection of its facilities pursuant to paragraph 11 of the General Conditions. Petitioner's ability to provide the requisite inspections requires the cooperation of Sylvania. Petitioner's bid requires payment by the state within 30 days of an invoice. Section 215.422 and the ITB provide that Respondent has 40 days to issue warrants in payment of contract debts and that interest does not accrue until after 40 days. The defects in Petitioner's bid are minor irregularities within the meaning of Florida Administrative Code Rule 60A-1.001(16). 12/ They neither affect the bid price, give Petitioner a competitive advantage, nor adversely impact Respondent's interests. Petitioner has the practical ability to arrange inspection's of Sylvania's facilities. Petitioner is legally responsible for failing to do so. Respondent's employees have never visited Sylvania's facilities during the 10 years in which Petitioner has been the contract vendor to the state. The requirement for payment within 30 days does not obviate the provisions of Section 215.422. Private contracts can not alter mutually exclusive statutory provisions.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Respondent enter a Final Order granting Petitioner's protest of Respondent's proposed agency action. RECOMMENDED this 26th day of September, 1996, in Tallahassee, Florida. DANIEL S. MANRY, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of September, 1996.
The Issue Whether Respondent should sustain Petitioner's challenge to the preliminary determination to reject Petitioner's bid as not responsive to Respondent's Invitation to Bid No. SB 91C-284V and to award the contract to another bidder that submitted a higher bid?
Findings Of Fact Based on the record evidence, the following Findings of Fact are made: On March 12, 1991, Respondent issued Invitation to Bid No. SB 91C-284V (hereinafter referred to as the "ITB") through which Respondent solicited the submission of bids to supply Respondent with prestressed concrete poles for a one year period beginning May 16, 1991. The ITB was a multi-page document with various component parts. Bidders were instructed on the first page of the ITB to complete and "RETURN ONE COPY OF ALL BID SHEETS AND THIS [BIDDER ACKNOWLEDGMENT] FORM." They were advised elsewhere on the first page of the ITB that "[o]ne copy of all bid documents that ha[d] page numbers, and this executed Invitation to Bid [Bidder Acknowledgment] [F]orm [had to] be returned for the Bid to be considered." The advisement concerning the requirement that all numbered pages had to be returned for a bid to be considered was repeated at the bottom of each numbered page of the ITB. Directly beneath the Bidder Acknowledgment Form on the first page of the ITB was the following provision: This Invitation to Bid, General Conditions, Instructions to Bidders, Special Conditions, Specifications, Addenda and/or any other pertinent document form a part of this proposal and by reference are made a part thereof. The ITB further provided, among other things, that "[i]n the best interest of [Respondent], [Respondent] reserve[d] the right to reject any and all bids and to waive any irregularity in bids received." Petitioner and South Eastern Prestressed Concrete, Inc. (South Eastern) submitted the only bids in response to the ITB. In accordance with the ITB'S instructions, Petitioner completed and returned to Respondent the Bid Summary Sheet, on which it indicated its price offer. It also completed and executed the Bidder Acknowledgment Form and returned it, along with the entire first page of the ITB, to Respondent. Petitioner, however, failed to return, as part of its bid submittal, all of the numbered pages of the ITB. Omitted from Petitioner's submittal were numbered pages 3 and 4. These missing pages contained paragraphs A. through N. of the ITB's Special Conditions, which covered the following subjects: A. Scope; B. Delivery; C. Award; D. Term of Contract; E. Brand Name; F. Catalog Cuts; G. Estimated Quantities; H. Bid Exempt; I. Bidders Responsibility; J. Corrections; K. Joint Bidding, Cooperative Purchasing Agreement; L. Withdrawal; 1/ M. Minority Certification Application; and N. Public Entity Crimes. There was nothing on numbered pages 3 and 4 of the ITB that the bidder needed to fill out or sign. While paragraphs M. and N. of the ITB's Special Conditions did make reference to certain forms that the bidder had to complete and submit to Respondent, these forms did not appear on either numbered page 3 or numbered page 4. They were separate documents. Petitioner completed these forms and submitted them to Respondent pursuant to the requirements of the Special Conditions. Petitioner did not propose in its bid submittal any contract terms or conditions that were at variance with those set forth in paragraphs A. through N. of the ITB's Special Conditions. Petitioner did not intend to signify, by failing to return numbered pages 3 and 4, any unwillingness on its part to adhere to contract terms and conditions set forth on those pages. Of the two bids submitted in response to the ITB, Petitioner's was the lowest. A preliminary determination, though, was made to reject Petitioner's bid because Petitioner had not returned numbered pages 3 and 4 of the ITB and to award the contract to South Eastern as the lowest responsive bidder. It is this preliminary determination that is the subject of the instant bid protest filed by Petitioner.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that the Palm Beach County School Board enter a final order sustaining the instant bid protest and awarding to Petitioner the contract advertised in Invitation to Bid No. SB 91C-284V. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 24th day of June, 1991. STUART M. LERNER Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 24th day of June, 1991.
The Issue The issues to be resolved in this proceeding concern whether the Petitioner, Close Construction, Inc. (Petitioner), (Close) was the lowest responsive and responsible bidder in the Request For Bid (RFB) Number 6000000262, whether the subject contract should be awarded to the Petitioner, and, concomitantly, whether the Respondent agency's decision to award the contract to the Intervener, Worth Contracting, Inc. (Worth) was clearly erroneous, contrary to competition, arbitrary or capricious.
Findings Of Fact The South Florida Water Management District is a public corporation authorized under Chapter 373, Florida Statutes. It issued a request for bids for the refurbishment and automation of certain facilities in Broward County, Florida. Close is a construction company duly authorized to do business in the state of Florida. It was one of the bidders on the procurement represented by the subject request for bids and is the Petitioner in this case. This dispute had its beginnings on June 5, 2009, when the Respondent issued RFB number 6000000262. The RFB solicited construction services for the refurbishment and automation of two facilities in Broward County. The procurement would involve the installation of new direct-drive electric pumps at the Respondent's G-123 Pump Station in Broward County, along with the construction of an equipment shelter and the replacement of a retaining wall with a poured concrete retaining wall, as well as refurbishment of "pump flap gates." The RFB also requested construction services for the replacement of gates at the Respondent's S-34 water-control structure in Broward County. Both facilities would thus be automated so that they can be remotely operated from the Respondent's headquarters in West Palm Beach. After issuance of the RFB, two addenda were supplied to vendors and were posted. The first addendum was posted on or about June 19, 2009, concerning a change in specifications for flap gates and is not the subject of this dispute. Addendum No. Two was electronically posted on or about June 30, 2009. It amended the technical specifications of the RFB by deleting Section 11212 regarding measurement of payment of electric motors/belt-driven axial flow pumps. That addendum also added a new measure and payment to Subpart 1.01 of the technical specifications to provide for an owner-directed allowance of $40,000.00 to provide for the potential need for certain electrical utility work to be done by FPL in order to complete the project. Addendum No. Two added an additional term to the RFB in providing that the $40,000.00 allowance price "Shall be added to the other costs to complete the bid." The second Addendum also stated, "The allowance price shall be used at the discretion of the District and, if not used, will be deducted from the final Contract Price." That addendum also directed bidders to replace the original Bid Form 00320-2, which had been enclosed with the RFB, with a new Bid Form, 00320R1-2. The new Bid Form is identical to the original form except that the schedule of bid prices contained in paragraph four, on page 003201-2, was altered to itemize the $40,000.00 discretionary cost allowance. The original form had contained a single line for the bidder's lump sum bid price, whereas the revised form provided for a lump sum bid amount to be itemized and a base bid amount, which required the bidder to enter on the form the amount of its bid, then add the discretionary cost amount and write the sum of those two numbers on a third line. In paragraph four of the new bid form there is re- printed language concerning the use of the discretionary allowance which appeared on the face of Addendum No. Two. Other than the change to paragraph four and the alteration of the page numbers to include an "R" in the page number, the revised bid form is identical to the original bid form. The other bid documents were not altered in any manner by Addendum No. Two. The deadline for bid submissions was Thursday, July 9, 2009, at 2:30 p.m. The Petitioner timely submitted its bid to the District. In submitting its bid however, the Petitioner used the original bid form which had been enclosed with the RFB. The bid form submitted was an exact copy of the bid form furnished by the District which Close had printed from the electronic copy of the RFB received from the District. The Petitioner did not substitute the revised bid form, attached to Addendum No. Two, for the original form in submitting its bid. The Petitioner's bid was deemed non-responsive by the District and was rejected on the basis that Close had failed to submit the bid on the revised form required by Addendum No. Two. Thereafter, the District, at its August 13, 2009, meeting, approved award of the bid to Worth. The intent to award was posted electronically on or about August 14, 2009. The persuasive evidence establishes that Close received both addenda to the bid documents. It was aware of the Addendum No. Two, and it accounted for all of the changes to the technical specifications made in both addenda in the preparation of its bid. The evidence shows that Close was aware of the $40,000.00, owner-directed cost allowance and that it incorporated it in the formulation of its total bid price. Thus, Close's final bid amount was $3,751,795.00. That number included the $40,000.00 cost allowance at issue, added to the bid documents by Addendum No. Two. The internal bid work sheets, prepared by personnel of Close, identified and itemized the $40,000.00 discretionary cost allowance as a component of the final bid price. The persuasive evidence thus establishes that Close's final bid amount did include the $40,000.00 cost allowance. Moreover, the written notes of witness Christopher Rossi, the estimator for Close, show the $40,000.00 amount as an "FPL Allowance." Both Mr. Rossi and Mr. Boromei, the Vice President for Close, who prepared the bid, explained that the $40,000.00 was understood by Close to be a cost allowance, that it would only be charged to the District to the extent that it was actually used, at the District's discretion. If it were not used, it was to be deducted from the overall contract price. Addendum Two specifically provides that the discretionary cost allowance was to be used only at the discretion of the District and that the unused portion would be deducted from the contract amount. When Close submitted its bid it mistakenly submitted it on the original bid form and failed to exchange the bid forms as directed in Item Two of Addendum No. 2. In paragraph one of both bid forms, however, the bidder is required to specifically fill out, acknowledge and identify all addenda. By doing so the bidder expressly agrees to build the project in conformance with all contract documents, including all addenda, for the price quoted in the bid. Close completed this paragraph, specifically identified both Addendum One and Addendum Two, and specifically agreed to strictly conform, in performance of the work to the plans, specifications and other contract documents, including Addendum Nos. One and Two. Paragraph one was not changed by the addition of Addendum No. Two and it is identical in both the original and the revised forms at issue. Paragraph one of the original and the revised bid forms constitutes an agreement by the bidder to perform and construct a project "in strict conformity with the plans, specifications and other Contract Documents. . . ." The addenda are part of the contract documents and are expressly referenced as such in this agreement. Both bid forms, the original and the revised, include paragraph eight, which clearly states that the bidder will post a bid bond to secure and guaranty that it will enter into a contract with the District, if its bid is selected. Paragraph eight was unchanged by Addendum No. Two and its terms are identical in both Bid forms at issue, including the form that Close signed and submitted as its bid. The persuasive evidence shows that in submitting its bid, whether on either form, Close committed itself to the identical terms as set forth in the identical contract documents agreed to by Worth and the other bidders. The evidence established that Close intended to bind itself to the terms of the RFB, and all terms of Addendum No. Two, including the discretionary cost allowance term. Close considered itself bound to enter into a contract for the price of its bid if selected by the District. It likewise considered that the price of its bid, would only include the cost allowance if the discretionary allowance was implemented by the District. Upon the opening of the bids, the firm of Cone and Graham, Inc., was identified as the lowest bidder. Cone and Graham's bid was in the amount of $2,690,000.00. Close was the second lowest bidder, with a bid of $3,751,795.00. The third lowest bidder was Worth Contracting, Inc., with a bid of $3,898,410.00. Cone and Graham was allowed to provide additional information and to even meet with some District staff following the opening of its bid. The additional information it was allowed to provide concerned technical specifications of the pumps proposed in its bid. Through this verification process conducted with the Agency, Cone and Graham ultimately convinced the District to permit them to withdraw its bid without forfeiting their bid bond. This left the Petitioner, Close, the lowest bidder, at $146,615.00 less than the bid submitted by Worth, the initially-awarded bidder. Close's bid, upon review, was rejected as non- responsive due to its failure to exchange the original Bid form with the revised Bid form, as indicated above, in spite of the fact that Close had also agreed to adhere to the entirety of Addendum No. Two on the face of the Bid form. Thus the recommended award to Worth for the above-referenced additional amount of bid price was adopted by the District, engendering this protest. James Reynolds, the Contracts Specialist for the District, conceded that it was apparent on the face of Close's bid that a mistake had been made in the use of the original form, rather than the revised form. He conceded there was an inconsistency between Close's clear acknowledgement of and agreement to the terms of the contract documents, which expressly included Addendum No. Two and Close's apparent mistaken use of the original Bid form. Under the express terms of Article 19.03 of the RFB, "The Bid shall be construed as though the addendum(a) have been received and acknowledged by the bidder." Mr. Reynolds admitted, however, that he did not apply the terms of Article 19.03 of the RFB in his review of Close's bid and did not construe the bid in the manner provided in the RFB to resolve the apparent inconsistency. He reasoned that Close had used the wrong bid form and looked no further. The District's Procurement Manual provides a procedure whereby a bidder may correct inadvertent mistakes in its bid. Under the terms of Chapter 5-5 of that manual, where the District knows or has reason to conclude, after unsealing of bids, that a mistake may have been made by a bidder, the District "shall request written verification of the bid." In such a circumstance the bidder "shall be permitted the opportunity to furnish information in support of the bid verification as long as it does not affect responsiveness, i.e., the bid substantially conforms to the requirements of the RFB as it relates to pricing, surety, insurance, specifications and any other matter unequivocally stated in the RFB as determinant of responsiveness." See Joint Exhibit 7,6 pages 61 and 62, in evidence. Mr. Reynolds admitted in his testimony that he did not follow the procedure set forth in the manual for verifying a bid because, in his view, that would be allowing an impermissible supplementation of Close's bid. Ms. Lavery, in her testimony, in essence agreed. The Procurement Manual expressly required the District, upon recognizing the mistake and an inconsistency apparent on the face of Close's bid, to verify that bid and to provide Close with the opportunity to furnish information in support of bid verification. Thus, by the express terms of the manual, a bidder must be given an opportunity to clarify mistakes. The Procurement Manual expressly permits a bidder under these circumstances to correct any "inadvertent, non- judgmental mistake" in its bid. Chapter 5 of the Manual provides that "a non-judgmental mistake" is a mistake not attributable to an error in judgment, such as mistakes in personal judgment or wrongful assumptions of contract obligations. Inadvertent technical errors, such as errors of form rather than substance, are considered non-judgmental errors." See Joint Exhibit 7, page 62, in evidence. It is patently apparent that Close's use of the original bid form, inadvertently, while also unequivocally acknowledging and agreeing to the entirety of Addendum No. Two, represented a non-judgmental mistake. Both of the District witnesses, however, testified that the policy regarding mistakes was not followed and Close was not given an opportunity under the District's policy to provide additional information to support verification of the bid. Although Close failed to substitute the revised Bid form for the original Bid form, as called for by Addendum No. Two, its bid was substantively responsive to the technical specifications and requirements of the RFB, and the irregularity is technical in nature. The parties stipulated that the use of the original form, rather than the revised bid form, was the sole basis for Close being determined to be non-responsive by the Agency. In accordance with Florida Administrative Code Rule 40E-7.301, in Chapter 5 of the District's Procurement Manual, the District reserves the right to waive minor irregularities in a bid. A material irregularity is defined by the District's policy as one which is not minor in that it: (a) affects the price, quality, time or manner of performance of the service such that it would deprive the District of an assurance that the contract will be entered into, performed and guaranteed according to the specified requirements; (b) provides an advantage or benefit to a bidder which is not enjoyed by other bidders; or (c) undermines the necessary common standards of competition. See Joint Exhibit 7, page 58, in evidence. The preponderant, persuasive evidence shows that the irregularity in Close's bid did not affect the price of the bid or truly deprive the District of assurance that the contract would be entered into and performed according to all the terms of the RFB, including addenda. The evidence established that Close actually included the $40,000.00 discretionary cost allowance in its final bid price. It merely did not show it as a separate itemization, because it did not use the revised form providing that itemization line. The fact that the discretionary allowance was itemized in the revised bid form, as part of the bid amount, does not equate to an effect on the contract price as a result of Close's using the original Bid form. Close's error, by mistakenly submitting its bid on the original bid form, did not alter the price of its bid. The evidence clearly established that the bid price for Close's bid would be the same regardless of which form it used. Moreover, the preponderant, persuasive evidence establishes that the use of the original Bid form by Close did not deprive the District of assurance that the contract would be performed in accordance with the all bid documents. Close's bid, secured by its bid bond, clearly acknowledged and agreed to the express terms of Addendum No. Two in their entirety, which included the terms under which the discretionary cost allowance could be applied. Close considered itself bound to the terms of the RFB and assured the Agency that it was so bound by the written acknowledgement and agreement it submitted to the Agency as part of its bid, concerning the elements of Addendum No. Two. The evidence demonstrated that Close understood that the $40,000.00 amount was a discretionary cost allowance and that Close would not be entitled to it unless the District decided to use it. Despite the opinion of Agency witnesses to the contrary, the error in Close's bid was a technical one and non- material because it did not confer a competitive advantage upon Close. Close's use of the wrong form did not alter the price of its bid. Its mistake in the use of the original bid form could only change the relative, competitive positions of Close and Worth if the amount of the discretionary cost allowance was greater or equal to the difference between those two bids, i.e., the $146,650.00 amount by which Worth's bid exceeded the bid of Close. 1/ The bid of Worth exceeds Close's bid by an amount far greater than the amount at issue in the discretionary cost allowance identified in Addendum No. Two and expressly itemized in the revised Bid form, i.e. $40,000.00. The District contends that Close gained some competitive economic advantage over other bidders by having the means by which it could optionally withdraw its bid, based upon alleged non-responsiveness, in not substituting the revised Bid form which would contain the itemization of the $40,000.00 cost allowance. It is difficult to see how it could gain a competitive advantage versus other bidders through some perceived ability to deem itself non-responsive, at its option, and withdraw its bid, thus denying itself the contract. The competitive bidding laws are designed to prevent a firm from gaining a competitive advantage in obtaining a contract versus the efforts of other bidders, not in depriving itself of the opportunity to get the work. Moreover, concerning the argument by the District that this may confer the advantage to Close of allowing it to withdraw its bid at its option and still obtain a refund of its bid bond; even if that occurred, it would not confer a competitive advantage vis-à-vis other bidders. It would merely involve a potential pecuniary advantage to Close's interest, versus that of the Agency itself, which obviously is not a bidder. Moreover, it should again be pointed out that Cone and Graham was allowed to provide additional information concerning its bid elements, and even to meet with the District staff, following the opening of the bids. It was then allowed to withdraw its bid without forfeiting its bid bond. If the District had inquired, by way of verification of Close's bid, as to whether the discretionary cost amount was included in it's bid, that inquiry does not equate to allowing Close to unlawfully supplement its bid. Indeed, if in response to such an inquiry, Close announced that the discretionary allowance was not included in its bid, its bid at that point would be materially non-responsive to the specifications. If Close was then allowed to supplement its bid by changing its price to add the allowance, such would indeed be an unfair competitive advantage and a violation of law on the part of Close and the Agency. The evidence does not show that such happened or was proposed by any party. If a verification inquiry had been made and Close announced that, indeed, its bid price did include the subject discretionary cost allowance, without further response to the specifications being added, then no competitive advantage would be afforded Close and no legal violation would occur. In fact, however, as pointed out above, the verification request, pursuant to the District's policy manual, was never made. This was despite the fact that the District's witness, Mr. Reynolds, acknowledged that the use of the original bid form was an apparent mistake on the face of the bid, when considered in conjunction with Close's express agreement to construct the project in strict conformance with all contract documents, and particularly with regard to Addenda Numbers One and Two. The non-judgmental mistake, involving use of the original bid form in lieu of the revised bid form, could have been easily clarified by a verification inquiry. That policy was not followed, based solely on the fact that the wrong bid form was used, even though the preponderant, persuasive evidence shows that in all material and substantive respects the bid was a conforming, responsive bid and included in its price the discretionary cost allowance. The preponderance of the evidence shows that the mistaken use of the original Bid form was a non- material irregularity under the District's policies and the terms of the RFB. The District's actions in failing to uniformly apply its own bid verification policy when, in fact, it had allowed verification to one of the other bidders, and when, according to its own witness, it perceived an apparent mistake, was clearly erroneous. It is true that Close may not supplement its bid by changing material terms, but it is permitted to verify whether, in light of the mistaken use of the original Bid form, its bid price, as submitted, included the $40,000.00 discretionary allowance or not. Providing such "yes or no" type of additional information in order to clarify, and only clarify, information already submitted in the bid, in response to an inquiry by the District does not constitute "supplementation" of the bid for purposes of Section 120.57(3)(f), Florida Statutes (2008). NCS Pearson, Inc. v. Dept of Education, 2005 WL 31776, at page 18 (DOAH, Feb. 8, 2005). Even without verification of the bid, the bid on its face agrees to compliance with all terms and specifications, including Addendum No. Two. It is thus determined that there is no material irregularity. The bid submitted by Close does not afford it any competitive advantage vis-à-vis the other bidders and it is responsive.
Recommendation Having considered the foregoing Findings of Fact, conclusions of law, the evidence of record, the candor and demeanor of the witnesses, and the pleadings and arguments of the parties, it is, therefore, RECOMMENDED that a Final Order be entered by the South Florida Water Management District, awarding the subject contract for RFB 6000000262 to the Petitioner herein, Close Construction, Inc. DONE AND ENTERED this 5th day of January, 2010, in Tallahassee, Leon County, Florida. S P. MICHAEL RUFF Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 5th day of January, 2010.
