03-001253DDC Cpw Enterprises, Inc., D/B/A Cherokee Construction Company vs. Department Of Transportation Status: Closed Recommended Order on Thursday, September 18, 2003.

Summary: Petitioner should be declared non-responsible and ineligible to bid on Department contracts for a period of two years, based upon its unsatisfactory performance and default on landscape installation contract.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CPW ENTERPRISES, INC., d/b/a )

CHEROKEE CONSTRUCTION COMPANY, )

)

Petitioner, )

)

vs. ) Case No. 03 - 1253

)

DEPARTMENT OF TRANSPORTATION, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, a formal hearing was held in this case

on July 11, 2003, by video teleconference between sites in

Orlando and Tallahassee, Florida, before T. Kent Wetherell, II,

the designated Administrative Law Judge of t he Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Brant Hargrove, Esquire

Law Office of Brant Hargrove

2984 Wellington Circle, West

Tallahassee, Florida 32308

For Respondent: Robert M. Burdick, Esquire

Depar tment of Transportation

Haydon Burns Building, Mail Station 58

605 Suwannee Street

Tallahassee, Florida 32399 - 0458

STATEMENT OF THE ISSUES

The issues are whether the Department of Transportation may

declare Petitioner non - responsible and ineli gible to bid on

Department contracts based upon Petitioner's alleged

unsatisfactory performance and default on Department contract

number E - 5G08; and if so, for what period of time should

Petitioner be declared non - responsible.

PRELIMINARY STATEMENT

By le tter dated February 12, 2003, the Department of

Transportation (Department) notified Petitioner of its intent to

declare Petitioner non - responsible for a period of two years

based upon Petitioner's unsatisfactory performance and default

on Department contr act number E - 5G08. On March 4, 2003,

Petitioner timely requested a formal hearing on the Department's

proposed action. On April 7, 2003, the Department referred the

matter to the Division of Administrative Hearings (Division) for

the assignment of an Adm inistrative Law Judge to conduct the

hearing requested by Petitioner.

The hearing was initially scheduled for June 24, 2003, but

was subsequently continued based upon Petitioner's unopposed

motion. The hearing was rescheduled for and held on July 11,

200 3.

At the hearing, Petitioner presented the testimony of

Charles Welch and Elizabeth Gornick. Petitioner's Exhibits A

and B were received into evidence. The Department presented the

testimony of Judson Pankey, Stephen Bass, and Calvin Landers.

The Depar tment's Exhibits 1 through 3, 4A, 4B, 5 through 20,

and 22 through 24 were received into evidence. Upon the

Department's request, official recognition was taken of

Rule 14 - 22.0141, Florida Administrative Code.

Petitioner was permitted to submit the depos ition testimony

of Michael Huggins after the hearing. Mr. Huggins' deposition

was taken on July 22, 2003, and the Transcript of the deposition

was filed with the Division on August 22, 2003, and is hereby

received as Petitioner's Exhibit C .

The one - volum e Transcript of the hearing was filed with the

Division on August 13, 2003. The parties requested and were

given 20 days from the date that the hearing Transcript was

filed to file their proposed recommended orders (PROs). The

parties' PROs were timely f iled on September 2, 2003, and they

were given due consideration by the undersigned in preparing

this Recommended Order.

All statutory references in this Recommended Order are to

the 2002 codification of the Florida Statutes unless otherwise

indicated, and all references to Rules are to the current

version of the Florida Administrative Code.

FINDINGS OF FACT

Based upon the testimony and evidence received at the

hearing and the parties' stipulations, the following findings

are made:

A. Parties

1. Petiti oner is a Florida corporation whose principal

business is road and bridge maintenance. Petitioner also does

some landscape installation work.

2. Petitioner's president is Charles Welch.

3. Petitioner has received between ten and 20 contracts

from the Department since 1993. However, the contract at issue

in this proceeding is the first landscape installation project

that Petitioner has done for the Department.

4. The Department is the state agency responsible for

maintaining and regulating the use of the right - of - way along the

state highway system. That responsibility includes overseeing

the installation and maintenance of landscaping within the

right - of - way.

B. Department Contract No. E - 5G08

5. In November 2001, the Department awarded Petitioner a

contract to install landscaping around six interchanges in the

central Florida area.

6. The interchanges were identified and prioritized in the

bid specifications as follows: (1) I - 95/US 192 interchange;

(2) I - 4/Lake Mary Boulevard interchange; (3) SR 25/SR 200

interchange; (4) SR 482/SR 435 interchange; (5) I - 95/SR 518

interchange; and (6) US 441/SR 46 interchange. The SR 482/SR

435 interchange was subsequently deleted from the project, and

the I - 4/Lake Mary Boulevard interchange was subsequently

pri oritized ahead of the I - 95/US 192 interchange.

7. The Department's contract identification number for the

project was E - 5G08.

8. The contract required Petitioner to prepare and mulch

66,667 square yards of beds for the landscaping and then to

install a t otal of 63,667 plumbago shrubs and 927 sabal palm

trees. The plumbagos were required to be ten to 18 inches in

height, and the palm trees were required to be nine to 20 feet

in height.

9. Petitioner did not challenge the specifications for the

project.

1 0. Petitioner bid $745,160.90 for the contract, and the

Department accepted the bid at that amount.

11. Petitioner's bid amount was calculated by multiplying

a unit price for each plant type by the number of plants

required under the contract, plus a unit price for the

mulching/bed preparation multiplied by the total number of

square yards in the beds. No separate amount was bid by

Petitioner for "maintenance," and the bid form did not include a

separate line for that item.

12. The contract generally descr ibed the work to be

performed by Petitioner as "furnish[ing] and install[ing] palms,

plants and associated landscape materials at various locations."

13. A similar description of the project was provided on

the first page of the bid specification package.

14. The contract and the bid specification package

incorporated by reference the 2000 edition of the Department's

Standard Specifications for Road and Bridge Construction

(Standard Specifications).

15. Mr. Welch was generally familiar with the Standard

Spe cifications as a result of the prior contract work that he

and Petitioner had done for the Department. He understood that

the Standard Specifications were part of each Department

construction and maintenance contract.

16. Section 580 - 10 of the Standard S pecifications,

entitled "Contractor's Responsibility for Condition of the

Plantings," requires the contractor to:

[e]nsure that the plants are kept watered,

that the staking and guying is adjusted as

necessary, that all planting areas and beds

are kept fre e of weeds and undesirable plant

growth and that the plants are maintained so

that they are healthy, vigorous, and

undamaged at the time of acceptance.

17. Section 580 - 11 of the Standard Specifications,

entitled "Plant Establishment Period and Contractor 's Warranty,"

requires the contractor to:

[a]ssume responsibility for the proper

maintenance, survival and condition of all

landscape items for a period of one year

after the final acceptance of all work under

the Contract in accordance with [Section]

5 - 1 1. [The contractor shall also] [p]rovide

a Warranty/Maintenance Bond to the

Department in the amount of the total sums

bid for all landscape items as evidence of

warranty during this plant establishment

period. The costs of the bond will not be

paid sepa rately, but will be included in the

costs of other bid items.

* * *

[The contractor shall] [t]ake responsibility

to apply water as necessary during this

period and include the cost in the various

landscape items. No separate measurement of

payment w ill be made for water during the

plant establishment period.

18. Pursuant to Sections 5 - 10 and 5 - 11 of the Standard

Specifications, "acceptance" of a project does not occur until

the Department determines that the contractor has satisfactorily

completed a ll work on the project and informs the contractor in

writing that the project is accepted.

19. Sections 5 - 10.2 and 5 - 10.3 of the Standard

Specifications allow for acceptance of portions of the project,

called "partial acceptance." Those provisions do not, however,

require the Department to accept projects on a piecemeal basis.

20. At the pre - construction conference held on

November 19, 2001, Mr. Welch asked, "if a single location

[would] be accepted as it is completed." The Department's

project manager, S tephen Bass, replied that he would "check to

see if this is possible," and he told Mr. Welch that "[i]n the

meantime, as you complete a site, advise me in writing and I

will respond . . . ."

21. Based upon the subsequent correspondence between the

partie s, it can be inferred that the Department decided against

accepting the project on a site - by - site basis. No partial or

final acceptance was ever given for the project or any of the

individual sites.

22. The first page of the specification package provided

that the contract period was "270 days for installation," and

"365 addtl [sic] days after acceptance for establishment."

23. The 365 - day, post - acceptance establishment period

referred to in the specification package is the same as the one -

year period refe rred to in Section 580 - 11 of the Standard

Specifications.

24. Petitioner's obligations during the establishment

period were specifically discussed at the pre - construction

conference. At that time, Mr. Bass made it clear to Mr. Welch

that the contract incl uded the one - year establishment period, in

addition to the 270 - day installation period.

25. The installation period began on December 3, 2001, and

ended on September 8, 2002. The latter date takes into account

the ten "[bad] weather days" added to the ins tallation period

under the terms of the contract.

26. Mr. Welch understood the project to be an

installation - only contract. That understanding was based upon

the reference to a 270 - day installation period in the

specifications, and the fact that the bid form did not have a

separate line - item for maintenance.

27. Mr. Welch did not read the specifications word - for -

word prior to bidding on the project, nor did he take into

account Section 580 - 11 of the Standard Specifications or the

language on the first pag e of the specification package which

clearly referenced the 365 - day, post - acceptance establishment

period.

28. Mr. Welch did not understand the contract to require

Petitioner to weed or otherwise maintain the beds after the

plants were installed. He under stood the contract to only

require Petitioner to install the plants and then water them

through the end of the 270 - day installation period. In reaching

this conclusion, Mr. Welch did not take into account

Section 580 - 10 of the Standard Specifications, whi ch clearly

requires pre - acceptance weeding and which makes the contractor

the absolute insurer of the plants until acceptance by the

Department.

29. The Department did not in any way contribute to

Mr. Welch's misunderstanding of the scope of the contract. The

contract documents were clear and unambiguous on the issue and

the Department made it clear from the outset that the contract

included a one - year establishment period.

C. Petitioner's Performance Under the Contract

30. Petitioner performed its work u nder the contract in a

series of steps.

31. Petitioner first sprayed the areas at each site where

the landscaping would be installed with a herbacide to kill any

existing vegetation. Two herbacide treatments were done at each

site.

32. Petitioner then "mu lched" the planting areas at each

site by mowing the dead vegetation and marked the locations at

each site where the palm trees were to be installed.

33. Petitioner then planted the palm trees at each site.

34. Next, Petitioner installed "weed fabric" at the

I - 4/Lake Mary Boulevard interchange (hereafter "the Lake Mary

site").

35. The weed fabric has two purposes: it blocks the light

that reaches the ground thereby reducing or eliminating weeds,

and it also helps prevent erosion.

36. After install ing the weed fabric, Petitioner began

planting the plumbago shrubs at the Lake Mary site. To do so,

Petitioner cut and folded back the weed fabric where each

plumbago was to be located and then dug the hole within which

the plant was placed. After the plant was placed in the hole,

the weed fabric was then re - folded around the base of the plant.

37. After the plumbagos were planted, Petitioner completed

its work at the Lake Mary site by spreading pine straw mulch in

the landscaped beds. The contract req uired a four - inch layer of

mulch.

38. After completing its work at the Lake Mary site,

Petitioner moved to another site and installed the weed fabric,

planted the plumbagos, and spread the pine straw mulch at that

site. Petitioner continued working on a s ite - by - site basis in

this manner until all of the sites had been completed.

39. In June 2002, the Department expressed concern to

Petitioner that it had fallen behind its installation schedule.

In response, Petitioner put more people on the job and was ab le

to get back on schedule. Petitioner completed the installation

of the plants within the 270 days allotted for installation.

40. Petitioner periodically watered each of the sites as

the plants were being installed. Petitioner had two water

trucks that it used for watering. The truck used at the Lake

Mary site sprayed a stream of water out of a hose at a

relatively high flow rate.

41. Because large portions of the landscaped beds at the

Lake Mary site were on steep slopes around the interchange, the

st ream of water from the water truck caused some of the pine

straw to wash down the slope. Heavy rains also caused the pine

straw to wash down the slope and, in some areas, to wash away

completely. As a result, some of the landscaped areas were not

covered with the four inches of mulch required by the

specifications.

42. Mr. Welch acknowledged the loss of mulch in some

areas, and he attributed it to the weed fabric being too "slick"

to hold the mulch. Nevertheless, because Mr. Welch considered

the replacem ent of the mulch to be maintenance, which he did not

consider to be part of the contract, Petitioner never replaced

the pine straw.

43. Petitioner did not consider using a "drip line" or

other watering system which would have applied the water at

ground le vel or at a lower rate of flow than the stream of water

being sprayed from the water truck. Such an alternative system

may have minimized the amount of mulch that washed down the

slope from watering, but it may not have affected the mulch that

washed away due to heavy rains. Such a system may have also

gotten more water to the plants' roots.

44. Despite the watering done by Petitioner, plumbagos and

palm trees died at the Lake Mary site, as well as at the other

sites. Mr. Welch acknowledged the "loss" of a number of trees

and plants, although he testified that fewer plants had died

than he had projected at the outset of the project. The precise

number of trees and plants which died before Petitioner was

declared in default on the contract and told to sto p work on the

project is not clearly reflected in the record.

45. The loss of the plumbagos at the Lake Mary site may be

partially attributable to the weed fabric selected by Petitioner

not being permeable enough to allow the water to reach the plant

roots , but Petitioner's failure to utilize an alternative

watering system to compensate for the "problems" it encountered

with the weed fabric also contributed to the loss of the

plumbagos.

46. On August 12, 2002, the Department and Petitioner

"agreed that subs tantial completion has been achieved" on each

of the sites. That means that all or substantially all of the

plants had been installed by that date; it does not mean that

the Department had accepted the work, either partially or

conditionally.

47. By lette r dated August 13, 2002, the Department

informed Petitioner that maintenance of the completed sites was

necessary. Specifically, the letter informed Petitioner that

there were dead palm trees and plumbagos at all of the sites

which needed to be replaced, that the pine straw mulch needed to

be replaced at most of the sites, and that weeding needed to be

done.

48. Petitioner did not perform the weeding or other

maintenance directed by the Department. Indeed, the only work

that Petitioner did on the project after August 13, 2002, was on

August 20, 2002, when it watered two of the sites.

49. By letter dated August 15, 2002, Petitioner responded

to the Department's direction that maintenance be commenced at

the completed sites. In that letter, Petitioner char acterized

the maintenance as "extra work" and requested additional

compensation for the maintenance work.

50. The Department denied Petitioner's request for

additional compensation by letter dated August 15, 2002. That

letter informed Petitioner that "a D eficiency Letter would be

forthcoming if weed removal operation does not begin

immediately." Petitioner did not respond to the letter.

51. By letter dated August 21, 2002, the Department issued

a "performance deficiency" based upon Petitioner's failure to

maintain the planted areas as required by the contract and as

directed by the Department in the letters dated August 13

and 15, 2002. Petitioner did not contest the deficiency within

the ten - day period prescribed by the letter.

52. By letter dated August 22, 2002, the Department

requested that Petitioner submit the Warranty/Maintenance Bond

required by the contract since "substantial completion has been

achieved on the . . . project." The letter further advised

Petitioner that the one - year establishment period would not

commence until the bond was received by the Department.

Petitioner did not respond to the letter.

53. By letter dated August 27, 2002, the Department

provided Petitioner with a "punch list" of items that required

correction before the pro ject could be accepted. The list

included the replacement of dead palm trees and dead or under -

sized plumbago shrubs at all of the sites; missing pine straw

mulch at all of the sites; weeding and general clean - up of all

of the sites; and submittal of the Warranty/Maintenance Bond.

54. At the time of the Department's August 27, 2002,

letter, 12 days still remained in the installation period.

Petitioner did not respond to the letter and it made no effort

to complete the punch list items identified by the Department.

55. The Department never accepted the work performed by

Petitioner under the contract because of the deficiencies

identified above. As a result, the 365 - day post - acceptance

establishment period never commenced.

56. Petitioner never provided th e Department the

Warranty/Maintenance Bond required by Section 580 - 11 of the

Standard Specifications, which was incorporated by reference

into the contract.

57. The Lake Mary site is highly visible because the

adjacent roads are very heavily traveled.

58. The Department received complaints regarding the

appearance of the Lake Mary site. The complaints came from

Seminole County officials and members of the public.

D. Alternative Weed Fabric Proposed by Petitioner

59. The specifications package for the con tract provided

general requirements for the weed fabric to be used on the

project. It did not, however, specify a specific brand of

fabric which must be used.

60. The specifications package provided that "[t]he fabric

shall conform to the physical require ments on Roadway and

Traffic Design Standards, Index No. 199 according to its

application."

61. Index No. 199 refers to the weed fabric as an "erosion

mat," and requires it to have an ultra violet (UV) rating of

2,000 hours. Index No. 199 does not prescri be criteria for

water permeability for the weed fabric.

62. Petitioner provided the information in the

specifications package relating to the weed fabric to its

material supplier, who then provided Petitioner a fabric that

met the specifications. The Dep artment was not involved in

those discussions.

63. As required by the specifications package, Petitioner

provided the Department a copy of the product data sheet for the

selected fabric so that the Department could confirm that the

fabric met the require ments of Index No. 199.

64. The weed fabric which Petitioner selected was called

"gold line." It had a UV rating of 2,500 hours, which met the

requirements of Index No. 199. It had a water permeability

rating of 15 gallons per minute per square foot (gal /min/SF).

65. After encountering the problems described above at the

Lake Mary site, Petitioner began looking for an alternative weed

fabric which would be more permeable to water.

66. The alternative fabric identified by Petitioner was

"Style 125EX" from Linq Industrial Fabrics, Inc. The water

permeability rating for that fabric was 150 gal/min/SF, but its

UV rating was only 500 hours.

67. Mr. Welch provided the data sheet for the Style 125EX

fabric to Mr. Bass and requested that Petitioner be allowed to

substitute that fabric for the fabric that it had used at the

Lake Mary site. The Style 125EX fabric would have been used on

the remaining sites, because the Lake Mary site had been

completed with the original weed fabric by that time.

68. That request wa s denied by the Department because the

UV rating for the Style 125EX fabric did not meet the

requirements of Index No. 199. The lower UV rating meant that

the fabric would not hold up as long and, therefore, could

create maintenance problems in the future .

69. After the request to substitute the Style 125EX fabric

was denied, Petitioner did not attempt to locate an alternative

material which met the UV rating specified in Index No. 199, but

was more permeable to water than the gold line fabric.

E. Petitio ner's Default and Unsatisfactory

Performance Rating

70. Section 8 - 9.1 of the contract provides that:

The following acts or omissions constitute

acts of default and . . . the Department

will give notice, in writing, to the

Contractor and his surety for any delay,

neglect or default, if the Contractor:

* * *

(c) performs the work unsuitably, or

neglects or refuses to remove materials or

to perform anew such work that the Engineer

rejects as unacceptable and unsuitable;

(d) discontinues prosec ution of the work,

or fails to resume discontinued work within

a reasonable time after the Engineer

notifies the Contractor to do so;

* * *

(j) for any other cause whatsoever, fails

to carry on the work in an acceptable

manner, . . . .

For a no tice based upon reasons stated in

subparagraphs (a) through (h) and (j): if

the Contractor, within a period of ten

calendar days after receiving the notice

described above, fails to correct the

conditions of which complaint is made, the

Department will . . . have full power and

authority, without violating the Contract,

to take the prosecution of the work out of

the hands of the Contractor and to declare

the contractor in default.

71. On September 16, 2002, the Department notified

Petitioner that it inten ded to "default" Petitioner under the

contract based upon its failure to maintain the planted areas,

its failure to replace the dead plumbagos and palms, and its

failure to provide the required Maintenance/Warranty Bond. As

required by the contract, the l etter gave Petitioner 10 days to

cure the deficiencies in its performance.

72. Petitioner did not respond to the Department's default

letter, nor did it take any action to cure the deficiencies

identified by the Department. As a result, on September 30,

2 002, the Department formally declared Petitioner in default on

the contract and directed Petitioner not to perform any

additional work on the project.

73. By letter dated October 22, 2002, the Department

advised Petitioner of its "preliminary" field perfor mance rating

for the contract. Petitioner received a raw score of 53 (out of

90), which is a scaled score of 59. That is an unsatisfactory

rating.

74. Petitioner did not contest its rating within the time

allowed by the Department's October 22, 2002, let ter. As a

result, the preliminary rating became final.

75. Petitioner was not scored in the area of "maintenance

of traffic operations." The Department had not received any

complaints from the public on that issue, which is the primary

consideration upo n which that score is based.

76. Had Petitioner received a "satisfactory" grade in that

category, Petitioner's total score would have been 60. If

Petitioner received a higher grade in that category, its total

score could have been as high as 63. In eithe r event, those

scores still result in an unsatisfactory rating.

77. By letter dated February 12, 2003, the Department

advised Petitioner that it intended to declare Petitioner

non - responsible for a period of two years based upon its default

and unsatisf actory performance on Department contract number

E - 5G08. Petitioner timely requested a formal hearing, and this

proceeding followed. The Department stipulated at the hearing

that its decision to declare Petitioner non - responsible was not

based on Petit ioner's numerical performance rating (whether it

is 59, 60, or 63), but rather on the actual unsatisfactory

performance that is described above.

F. Subsequent Department Contract With Vila & Sons

78. After Petitioner's default, the Department contracted

with another entity "in order to salvage the Department's

investment in this landscaping project, i.e. , ensure that the

plantings become established, . . . ."

79. That contract, entered into in May 2003 between the

Department and Vila & Sons Landscaping C orporation, is

identified as contract number E - 5H09 (Vila & Sons Contract).

The contract amount was $112,461.36.

80. The Vila & Sons Contract was for "one - time

maintenance" of three of the sites that Petitioner was

responsible for under its contract with the Department. The

sites were the I - 4/Lake Mary Boulevard interchange, the SR 25/SR

200 interchange, and the US 441/SR 46 interchange.

81. The Vila & Sons Contract was only for a 60 - day period

and consisted of the following landscape maintenance functi ons:

1) weeding [which includes pruning of

existing live shrubs], 2) removal and

replacement of dead shrubs, 3) fertilizing

[which includes "watering in"], 4)

remulching as necessary, 5) watering for

plant establishment and/or maintenance.

(Brackets in o riginal).

82. The Vila & Sons Contract called for the installation

of 3,700 plumbago shrubs. It does not make reference to the

removal of dead palm trees, the re - erection of fallen palm

trees, or the installation of new palm trees.

83. The bid form for the Vila & Sons Contract included

separate line - items for water, mulch pine bark, plumbago shrubs,

slow - release fertilizer, and "landscape maintenance (weed

removal, manual)."

84. The record does not establish whether the Vila & Sons

Contract was satisf actorily performed or whether it was

successful in "salvaging" the installation work which had been

done by Petitioner.

85. Between the time that Petitioner was declared in

default in September 2002 and May 2003 when the Vila & Sons

Contract was entered i nto, the Central Florida area had periods

of cold weather. The cold temperatures during those periods may

have killed some of the plumbagos and palm trees installed by

Petitioner, but the record does not establish how many plants,

if any, were killed by t he cold weather as compared to the

plants that were already dead at the time of Petitioner's

default.

CONCLUSIONS OF LAW

A. Jurisdiction and Burden of Proof

86. The Division has jurisdiction over the parties to and

subject matter of this proceeding purs uant to Sections 120.569

and 120.57(1).

87. The Department has the burden of proof in this

proceeding because it is the party seeking to change the status

quo and because it is asserting the affirmative on the issue of

Petitioner's non - responsibility. Se e, e.g., Dept. of

Transportation v. J.W.C. Co., Inc. , 396 So. 2d 778, 788 (Fla.

1st DCA 1981) (burden of proof is on party asserting the

affirmative of an issue unless a statute provides otherwise);

Amico v. Division of Retirement , 352 So. 2d 556 (Fla. 1st DCA

1977) (agency had the burden of proof in case involving change

in person's retirement status); Balino v. Dept. of Health and

Rehabilitative Servs. , 348 So. 2d 349 (Fla. 1st DCA 1977)

(agency had the burden to establish that persons receiving

Medicaid benefits were no longer eligible). And cf.

Rule 14 - 22.0141(1) (creating presumption that bidders for

certain projects are responsible "unless the Department

determines that good cause exists to declare the contractor

non - responsible.")

88. The partie s disagree as to the appropriate standard of

proof. The Department contends that the preponderance of the

evidence standard applies, see Department's PRO at 9; Petitioner

contends that the clear and convincing evidence standard

applies. See Petitioner's PRO at Paragraph 35.

89. In Capeletti Brothers, Inc. v. Department of

Transportation , 362 So. 2d 346, 347 (Fla. 1st DCA 1978), the

court characterized a proceeding involving the suspension of a

contractor's certificate of qualification as "in effect [a]

li cense revocation proceeding[.]" The relief being sought by

the Department in this proceeding is substantially the same as

that in Capeletti Bothers . This proceeding is also penal in

nature because it will result in Petitioner's losing income that

it mig ht have received as the successful bidder on Department

contracts over the next two years. Accordingly, the clear and

convincing evidence standard of proof applies. See Dept. of

Banking & Finance v. Osborne, Stern & Co. , 670 So. 2d 932 (Fla.

1996) (clear and convincing evidence standard applies in

disciplinary proceedings and proceedings to impose

administrative fines); Section 120.57(1)(j) (preponderance of

the evidence standard does not apply in "penal or license

disciplinary proceedings").

B. May the Department Declare Petitioner Non - responsible?

90. Section 337.16(2) provides in pertinent part that:

[T]he department, for good cause, may

determine any contractor not having a

certificate of qualification nonresponsible

for a specified period of time or may deny,

suspend, or revoke any certificate of

qualification. Good cause includes, but is

not limited to, circumstances in which a

contractor or the contractor's official

representative:

* * *

(c) Fails to comply with contract

requirements, i n terms of payment or

performance record, or to timely furnish

contract documents as required by the

contract or by any state or federal statute

or regulation;

91. Rule 14 - 22.0141, which implements this statute,

provides in pertinent part:

(1) Contract ors who wish to bid for the

performance of construction contracts less

than or equal to $250,000, or any

maintenance contracts, are presumed to be

responsible bidders unless the Department

determines that good cause exists to declare

the contractor non - res ponsible, which shall

include the following:

(a) One of the circumstances specified in

Section 337.16(2), Florida Statutes, occurs;

(b) The contractor or its affiliate

defaulted on any contract, or the contract

surety assumed control of or financia l

responsibility for, any contract of the

contractor;

* * *

(e) The contractor failed to comply with

contract requirements, or failed to follow

Department direction in the execution of the

contract;

* * *

(i) The contractor has demonstrat ed

instances of poor or unsatisfactory

performance, deficient management resulting

in project delay, poor quality workmanship,

a history of payment of liquidated damages,

untimely completion of projects where

liquidated damages were not paid,

uncooperative attitude, contract litigation,

claims, or defaults.

(j) When the department determines that

any other circumstance constituting "good

cause" under Section 337.16(2), Florida

Statutes, exists.

92. The Department met its burden to prove that Petitioner

defaulted on contract number E - 5G08 by failing to weed and

maintain the beds during the installation period as required by

Section 580 - 10 of the Standard Specifications and as repeatedly

directed in the Department's August 2002 letters; by failing to

ensu re that the plants were "healthy, vigorous, and undamaged at

the time of acceptance" as required by Section 580 - 10 of the

Standard Specifications; and by failing to provide the

Warranty/Maintenance Bond required under the contract.

93. The Department als o met its burden to prove that

Petitioner's performance on the contract was unsatisfactory as a

result of its failure to weed and maintain the beds and its

failure to replace the plants and trees that died during the

installation period.

94. As a result, g ood cause exists to declare Petitioner

non - responsible under Section 337.16(2)(c) and Rule

14 - 22.0141(1)(a), (b), (e), (i), and/or (j).

95. Petitioner's misunderstanding of the scope of the

project is no excuse for its default and unsatisfact ory

performance since the specifications and the contract were

unambiguous. Specifically, the first page of the specification

package clearly stated that the contract included both a 270 - day

installation period and an additional 365 - day establishment

peri od, and the Standard Specifications clearly described the

contractor's obligations to keep the landscaped areas "free of

weeds and undesirable plant growth" prior to acceptance (Section

580 - 10); to maintain the plants and ensure their survival

through acce ptance ( Id. ) and for a one - year period after

acceptance (Section 580 - 11); and to provide a

Warranty/Maintenance Bond to the Department. Id.

96. Contrary to Petitioner's argument and despite the fact

that Petitioner completed the installation of the plants within

the time prescribed by the contract, the evidence fails to

establish that Petitioner substantially performed all of its

obligations under the contract. Indeed, the evidence clearly

and conclusively establishes that Petitioner refused to perform

th e pre - acceptance weeding and maintenance of the beds required

under the contract and that it failed to submit the

Maintenance/Warranty Bond required under the contract or to

otherwise accept its responsibilities during the post - acceptance

maintenance perio d.

97. Even if, as Petitioner argues, the Department's

refusal to allow the use of an alternative weed fabric can be

raised in this proceeding as a defense to its default under the

contract, the evidence does not support Petitioner's claims that

such refus al was unreasonable or that it created an

insurmountable obstacle to Petitioner's performance under the

contract. Indeed, the evidence establishes that the

Department's rejection of the single alternative weed fabric

proposed by Petitioner was based upon legitimate concerns

regarding the fabric's durability and that Petitioner did not

avail itself of other alternatives (such as watering at a lower

flow rate or using a drip line) that may have gotten more water

to the plants' roots.

C. For What Period Shou ld Petitioner

be Declared Non - responsible?

98. The determination as to the length of time that

Petitioner should be declared non - responsible is governed by

Rule 14 - 22.0141(2), which provides:

Determination of Contractor Non -

Responsibility. The Contra ctor will be

determined to be non - responsible and

ineligible to bid on Department contracts

for a period of time, based on the

seriousness of the deficiency.

(a) Examples of factors affecting the

seriousness of a deficiency are:

1. Impacts on proje ct schedule, cost, or

quality of work;

2. Unsafe conditions allowed to exist;

3. Complaints from the public;

4. Delay or interference with the bidding

process;

5. The potential for repetition;

6. Integrity of the public construction

pr ocess; and

7. The effect on the health, safety, and

welfare of the public.

99. There is no evidence that Petitioner's performance

under the contract created an unsafe condition or adversely

affected the public safety. Nor is there any evidence of a

d elay or interference with the bidding process or the project

schedule.

100. Petitioner's performance did generate complaints from

the public because of the poor appearance of the Lake Mary site,

although the record does not reflect how many complaints wer e

received or whether any complaints were received about the other

sites.

101. Petitioner's poor performance and ultimate default

significantly impacted the cost of the project since it

ultimately required the Department to contract with another

company a t a cost of more than $112,000.00, "in order to salvage

the Department's investment in this landscaping project."

102. Petitioner's apparent ignorance of or blatant

disregard for its contractual obligations, as shown by its

refusal to provide pre - acceptan ce maintenance of the landscaped

areas and its refusal to recognize its obligations during the

establishment period, undermines the competitive bidding process

through which Petitioner obtained this contract. Moreover, in

light of Mr. Welch's continued mi sinterpretation of the relevant

provisions of the Standard Specifications, Petitioner's

unsatisfactory performance on this project is capable of

repetition on future projects if not addressed here.

103. These factors, taken together, support the

Departmen t's preliminary determination that Petitioner should be

declared non - responsible for a period of two years. And cf.

Rule 14 - 22.012(1)(a)4.(contractor's certificate of qualification

should be suspended for "at least one year" when it is

determined tha t contractor defaulted on a contract).

104. The record does not establish whether Petitioner has

bid on any Department projects since it was declared in default

in September 2002, or since February 2003, when the Department

gave notice of its intent to de clare Petitioner non - responsible.

Nevertheless, based upon Capeletti Brothers , supra , the period

of Petitioner's non - responsibility should commence on the date

that the Department enters its final order in this proceeding,

not an earlier date on which Pet itioner may have voluntarily

stopped bidding on Department projects.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions

of Law, it is

RECOMMENDED that the Department of Transportation issue a

final order which declares Petitioner no n - responsible and

ineligible to bid on Department contracts for a period of two

(2) years, commencing on the date of the final order.

DONE AND ENTERED this 18th day of September, 2003, in

Tallahassee, Leon County, Florida.

S

T. KENT WETHERELL, II

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed wi th the Clerk of the

Division of Administrative Hearings

this 18th day of September, 2003.

COPIES FURNISHED :

Robert M. Burdick, Esquire

Department of Transportation

Haydon Burns Building, Mail Station 58

605 Suwannee Street

Tallahassee, Florida 32399 - 04 58

Brant Hargrove, Esquire

Law Office of Brant Hargrove

2984 Wellington Circle, West

Tallahassee, Florida 32308

James C. Myers, Clerk of Agency Proceedings

Department of Transportation

Haydon Burns Building, Mail Station 58

605 Suwannee Street

Tallahass ee, Florida 32399 - 0450

Pamela Leslie, General Counsel

Department of Transportation

Haydon Burns Building, Mail Station 58

605 Suwannee Street

Tallahassee, Florida 32399 - 0450

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit wri tten exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the final order in this case.