93-003971BID Butler Construction Company vs. Department Of Corrections Status: Closed Recommended Order on Thursday, September 2, 1993.

Summary: Lowest Bidder's submission of more than one r.o. qualif. form not a devia- tion from bid specs and thus DOC acted properly in not rejecting bid.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

BUTLER CONSTRUCTION COMPANY, )

)

Petitioner, )

)

vs. ) CASE NO. 93-3971BID

)

DEPARTMENT OF CORRECTIONS, )

)

Respondent. )

________________________________)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was conducted in this case on August

6, 1993, in Tallahassee, Florida, before Stuart M. Lerner, a duly designated

Hearing Officer of the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Jeffrey L. Gibson, Vice President

Butler Construction Company

210 Hardee Lane

Post Office Box 560398

Rockledge, Florida 32956-0398

For Respondent: R. Beth Atchison, Esquire

Steven S. Ferst, Esquire

Office of the General Counsel

Department of Corrections

2601 Blair Stone Road

Tallahassee, Florida 32399-2500

STATEMENT OF THE ISSUE

Whether the Department of Corrections (hereinafter referred to as the

"Department") should sustain Petitioner's challenge to the preliminary

determination to award the contract for Department Project No. NV-30A to McMahan

Construction Company, Inc.?

PRELIMINARY STATEMENT

By letter dated July 9, 1993, Petitioner protested the preliminary

determination to award the contract for Department Project No. NV-30A to McMahan

Construction Company, Inc. (hereinafter referred to as "McMahan"). In its

letter, Petitioner claimed that McMahan's bid should have been declared

"unresponsive" because McMahan "submitted Reverse Osmosis ("R.O.")

Qualifications Forms for more tha[n] one vendor." According to Petitioner,

"[t]his [was] not in conformance with the Bid Documents and gave [McMahan] an

unfair advantage." On July 22, 1993, the matter was referred to the Division of

Administrative Hearings for the assignment of a hearing officer to conduct a

formal hearing.

At the final hearing held in this case on August 6, 1993, a total of three

witnesses testified: Jeffrey L. Gibson, Petitioner's Vice President; Charles

Payne, an engineer employed by the Department; and John Justus, Jr., an employee

of McMahan. In addition to the testimony of these eight witnesses, a total of

14 exhibits (Joint Exhibits 1 through 11 and Petitioner's Exhibits 1 through 3)

were offered and received into evidence.

At the close of the evidentiary portion of the hearing, the Hearing Officer

announced on the record that post-hearing submittals had to be filed no later

than ten days following the Hearing Officer's receipt of the transcript of the

hearing. The Hearing Officer received the hearing transcript on August 16,

1993. Petitioner and the Department timely filed separate post-hearing

submittals on August 26, 1993. These post-hearing submittals have been

carefully considered by the Hearing Officer. The Department's post-hearing

submittal, unlike Petitioner's, contains what are labelled as proposed "findings

of fact." These proposed "findings of fact" are specifically addressed in the

Appendix to this Recommended Order.

FINDINGS OF FACT

Based upon the evidence adduced at hearing, and the record as a whole, the

following Findings of Fact are made:

1. In March of 1993, the Department issued an Advertisement for Bids

(hereinafter referred to as the "Advertisement") through which it solicited the

submission of bids on a construction project (Department Project No. NV-30A,

which is hereinafter referred to as the "Project") involving the expansion of

the water treatment facility at the Martin Correctional Institution.

2. The Advertisement, along with the other bid documents issued in

conjunction with the Advertisement, including, but not limited to, the

Instructions to Bidders (hereinafter referred to as the "Instructions") and the

Proposal Form, were compiled in a two-volume Specifications Manual (hereinafter

referred to as the "Manual") that was made available for public inspection.

3. Section B of the Manual's first volume contained the Instructions.

4. Section B-2 2.A.(11) thereof provided that "Section 01420 as contained

in the Technical Specifications must be submitted and the qualifications listed

therein must be satisfactory to the Owner and the Engineer. "

5. "Section 01420 as contained in the Technical Specifications" was a

"Bidder's Qualification Form, Reverse Osmosis Treatment System Component"

(hereinafter referred to as the "R.O. Form"), on which the bidder was to provide

"R.O. [Reverse Osmosis] System Supplier" information.

6. The R.O. Form repeated the directive that the bidder was to "[r]eturn

[the] [c]ompleted [R.O.] Form [w]ith [its] proposal."

7. Section B-14 of the Instructions addressed the subject of "preparation

and submission of bids" and provided, in pertinent part, as follows:

Each Bidder shall copy the proposal form on

his own letterhead, indicate his bid prices

thereon in proper spaces, for the Base Bid

and for alternates on which he bids. . . .

Proposals containing . . . . items not called

for or irregularities of any kind may be

rejected by the Owner.

8. Section B-16 of the Instructions addressed the subject of

"disqualification of bidders" and provided, in pertinent part, as follows:

More than one bid from an individual, firm,

partnership, corporation or association under

the same or different names will not be

considered. Reasonable grounds for believing

that a Bidder is interested in more than one

proposal for the same work will cause the

rejection of all proposals in which such

Bidders are believed to be interested.

9. The subject of "contract award" was addressed in Section B-21 of the

Instructions, which provided, in pertinent part, as follows:

. . . The recommendation for contract award

will be for the bidder qualified in

accordance with Section B-2 and submitting

the lowest bid provided his bid is

responsible and it is in the best interest of

the Owner to accept it. The qualified bidder

submitting the lowest bid will be that bidder

who has submitted the lowest price for the

base bid, or the base bid plus additive

alternates or less deductive alternates, taken

in the numerical order listed in the bid

documents in an amount to be determined by

the Owner. The Order of the alternates may

be accepted by the Owner in any sequence so

long as such acceptance does not alter the

designation of the low bidder.

The Owner reserves the right to waive any

informality in bids received when such waiver

is in the interest of the Owner.

10. Section C of Volume I of the Manual contained the Proposal Form that

all bidders were required to use to indicate their bid prices.

11. The following statement appeared at the bottom of the second page of

the Proposal Form:

There is enclosed:

a. A certified check, cashier's check,

treasurer's check, bank draft or Bid Bond

in the amount of not less than five (5)

percent of the Base Bid payable to the

Department of Corrections, as a guarantee.

b. An executed Trench Excavation Safety

Certification, Section F-13.

c. An executed Experience Questionnaire and

Contractor's Financial Statement and Public

Entity Criminal Conviction Form, Section L.

d. An executed Bidder's Qualifications Form

(Reverse Osmosis), Technical Specification

Section 01420.

12. While one completed R.O. Form had to accompany each bid, there was no

provision in any of the bid documents issued by the Department requiring a

bidder to submit only one such completed form and no more.

13. Petitioner, McMahan and R.J. Sullivan Corporation (hereinafter

referred to as "Sullivan") were among the contractors that timely submitted bids

in response to the Advertisement.

14. McMahan's and Sullivan's bids were each accompanied by more than one

completed R.O. Form.

15. Petitioner, on the other hand, provided the Department with only one

completed R.O. Form along with its bid.

16. Of the bids submitted, McMahan's was the lowest, Sullivan's was the

second lowest and Petitioner's was the third lowest.

17. McMahan's base bid price was $857,000.00. Petitioner's was

$905,000.00.

18. McMahan's total price, including the nine additive alternates accepted

by the Department, was $948,000.00. Petitioner's was $1,032,600.00, $84,600.00

more than McMahan's.

19. By letter dated July 1, 1993, the Department advised McMahan of its

intent "to award the contract [for Department Project No. NV-30A] to [McMahan]

as the lowest responsive bidder."

20. On July 9, 1993, Petitioner filed a formal written protest of the

preliminary determination to award the contract to McMahan alleging that McMahan

was not a responsive bidder inasmuch as McMahan "submitted Reverse Osmosis

("R.O.") Qualifications Forms for more tha[n] one vendor." According to

Petitioner, "[t]his [was] not in conformance with the Bid Documents and gave

[McMahan] an unfair advantage."

CONCLUSIONS OF LAW

21. With certain exceptions not applicable to the instant case, state

agencies may award contracts for construction projects only through the process

of competitive bidding. Chapter 255, Fla. Stat.; Rule Chapter 60D-5, Fla.

Admin. Code.

22. It has been said on more than one occasion that competitive bidding

requirements, such as those imposed upon state agencies, have as their purpose

and object the following:

[T]o protect the public against collusive

contracts; to secure fair competition upon

equal terms to all bidders; to remove not

only collusion but temptation for collusion

and opportunity for gain at public expense;

to close all avenues to favoritism and fraud

in various forms; to secure the best values

for the [public] at the lowest possible

expense; and to afford an equal advantage

to all desiring to do business with the

[government], by affording an opportunity for

an exact comparison of bids.

Wester v. Belote, 103 Fla. 976, 138 So. 721, 723-24 (Fla. 1931); Harry Pepper &

Associates, Inc. v. City of Cape Coral, 352 So.2d 1190, 1192 (Fla. 2d DCA 1977).

23. In soliciting and accepting competitive bids, a state agency has wide

discretion. See D.O.T. v. Groves-Watkins Constructors, 530 So.2d 912, 913 (Fla.

1988); Liberty County v. Baxter's Asphalt & Concrete, Inc., 421 So.2d 505, 507

(Fla. 1982).

24. An agency's discretion with respect to these matters, while broad, is

not unbridled. Such discretion may not be exercised in a manner that is

illegal, dishonest, fraudulent, arbitrary, unreasonable, capricious or in any

other way that would subvert or undermine the purpose and object of competitive

bidding. See D.O.T. v. Groves-Watkins Constructors, 530 So.2d 912, 913-14 (Fla.

1988); Caber Systems v. Department of General Services, 530 So.2d 325, 336

(Fla. 1st DCA 1988); Couch Construction Company, Inc. v. Department of

Transportation, 361 So.2d 172, 175 (Fla. 1st DCA 1978); Wood-Hopkins

Contracting Company v. Roger J. Au & Son, Inc., 354 So.2d 446, 450 (Fla. 1st DCA

1978).

25. In exercising its discretion, a state agency may not accept a bid that

is materially at variance with the bid specifications. Rule 60D-5.0071(8), Fla.

Admin. Code(agency may reject bid when it "determines that the bid is not valid

according to the bid specifications"). "However, although a bid containing a

material variance is unacceptable, not every deviation from the [bid

specifications] is material. It is only material if it gives the bidder a

substantial advantage over the other bidders and thereby restricts or stifles

competition." Tropabest Foods, Inc. v. Department of General Services, 493

So.2d 50, 52 (Fla. 1st DCA 1986). If it does not provide the bidder with such a

palpable competitive advantage, it constitutes a minor irregularity that should

be waived by the agency. See Robinson Electrical Co., Inc. v. Dade County, 417

So.2d 1032, 1034 (Fla. 3d DCA 1982); Rule 60D-5.0072, Fla. Admin. Code("[t]he

[a]gency shall reserve the right to waive any non-material bid deviation in bids

received").

26. In the instant case, Petitioner argues that the bids of the two lowest

bidders, McMahan and Sullivan, should have been rejected by the Department

because, contrary to the bid specifications, they each were accompanied by more

than one completed R.O. Form. Petitioner claims that "this is a major

irregularity that the Department should not be allowed to waive."

27. A careful examination of the bid specifications, however, including

those upon which Petitioner specifically relies, reveals that they contained no

requirement that a bidder submit only one (as opposed to at least one) completed

R.O. Form.

28. Accordingly, in submitting more than one completed R.O. Form, McMahan

and Sullivan did not deviate in any way, much less a material one, from the bid

specifications.

29. Their submission of more than one completed R.O. Form thus did not

render their bids non-responsive and thereby disqualify them from being awarded

the contract for the Project.

30. Given that McMahan submitted the lowest bid of all bidders and

Petitioner has failed to substantiate the allegation made in its bid protest

regarding the non-responsiveness of McMahan's bid, the Department should act in

accordance with its announced intention to award the contract for the Project to

McMahan. Rule 60D-5.007, Fla. Admin. Code.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is

hereby

RECOMMENDED that the Department of Corrections enter a final order finding

Petitioner's bid protest to be without merit and awarding McMahan, as the lowest

responsive and qualified bidder, the contract for Department Project No. NV-30A.

DONE AND ENTERED in Tallahassee, Leon County, Florida, this 2nd day of

September, 1993.

_________________________________

STUART M. LERNER

Hearing Officer

Division of Administrative Hearings

The Oakland Building

2009 Apalachee Parkway

Tallahassee, Florida 32399-1550

[phone]

Filed with the Clerk of the

Division of Administrative Hearings

this 2nd day of September, 1993.

ENDNOTES

1/ The Technical Specifications were found in the second volume of the Manual.

2/ The terms "Owner" and "Engineer," as used in the Instructions, were defined

in Section B-1 thereof as follows:

OWNER: Department of Corrections of the State

of Florida.

ARCHITECT-ENGINEER (OR ARCHITECT OR

ENGINEER): The Design Professional

commissioned by the Owner and identified in

the Advertisement for Bids acting directly or

through a duly authorized representative.

3/ Bids had to be filed with the Department by 12:00 p.m. on May 28, 1993.

4/ A "valid bid," as that term is used in Rule Chapter 60D-5, Florida

Administrative Code, "means a bid that is responsive to the bidding documents

and is submitted by a qualified responsible bidder. The validity of the bid is

determined by the [a]gency." Rule 60D-5.002(11), Fla. Admin. Code.

5/ A "non-material bid deviation," as that term is used in Rule Chapter 60D-5,

Florida Administrative Code, "means a variation from the invitation to bid terms

and conditions which does not affect the price of the bid, or give the bidder an

advantage or benefit not enjoyed by other bidders, or does not adversely impact

the interest of the agency."

6/ In coming to this conclusion, the Hearing Officer has given the words used

in these documents "their natural and most commonly understood meaning." See

Tropabest Foods, Inc. v. Department of General Services, 493 So.2d 50, 51-52

(Fla. 1st DCA 1986).

APPENDIX TO RECOMMENDED ORDER, CASE NO. 93-3971BID

The following are the Hearing Officer's specific rulings on the "findings

of facts" proposed by the Department in its post-hearing submittal:

1-8. Accepted and incorporated in substance, although not necessarily

repeated verbatim, in this Recommended Order.

9. To the extent that this proposed finding asserts that McMahan's bid was

"$99,000.00 cheaper [than Petitioner's] with all the alternates," it has been

rejected because it is not supported by competent substantial evidence.

Otherwise, it has been accepted and incorporated in substance.

10-13. Accepted and incorporated in substance.

14. To the extent that this proposed finding states that the bid documents

contain language "specifically permitt[ing] vendors to submit more than one

Bidder Qualification Form," it has been rejected because it is contrary to the

greater weight of the evidence. To the extent that it suggests that there was

no language in these documents directing that bidders limit the number of such

forms they submitted to one, it has been accepted and incorporated in substance.

15-16. Accepted and incorporated in substance.

17. Rejected because it is contrary to the greater weight of the evidence.

18-19. Accepted and incorporated in substance.

20. First sentence: Accepted and incorporated in substance; Second

sentence: To the extent that this proposed finding suggests that the submission

of more than one R.O. Form was an irregularity, it has been rejected because it

is contrary to the greater weight of the evidence. To the extent that it states

that the submission of more than one R.O. Form "was at most a minor

irregularity," if an irregularity at all, it has not been incorporated in this

Recommended Order because it is unnecessary to make any findings regarding the

matter given the Hearing Officer's finding that the submission of more than one

R.O. Form was not in derogation of the bid specifications and did not constitute

an irregularity of any type.

21-25. Not incorporated in this Recommended Order because it is

unnecessary to resolve the factual issues addressed in these proposed findings.

26. Rejected because it is more in the nature of a summary of testimony

than a finding of fact based upon such testimony.

27-28. Not incorporated in this Recommended Order because it is

unnecessary to resolve the factual issues addressed in these proposed findings.

COPIES FURNISHED:

Jeffrey L. Gibson, Vice President

Butler Construction Company

210 Hardee Lane

Post Office Box 560398

Rockledge, Florida 32956-0398

R. Beth Atchison, Esquire

Steven S. Ferst, Esquire

Office of the General Counsel

Department of Corrections

2601 Blair Stone Road

Tallahassee, Florida 32399-2500

Louis A. Vargas, Esquire

General Counsel

Department of Corrections

2601 Blair Stone Road

Tallahassee, Florida 32399-2500

Harry K. Singletary, Jr., Secretary

Department of Corrections

2601 Blair Stone Road

Tallahassee, Florida 32399-2500

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this recommended

order. All agencies allow each party at least 10 days in which to submit

written exceptions. Some agencies allow a larger period of time within which to

submit written exceptions. You should contact the agency that will issue the

final order in this case concerning agency rules on the deadline for filing

exceptions to this recommended order. Any exceptions to this recommended order

should be filed with the agency that will issue the final order in this case.