03-001484BID Grading And Bush Hog Services, Inc. vs. Department Of Transportation Status: Closed Recommended Order on Thursday, July 24, 2003.

Summary: The award of a bid to a non-profit corporation is not contrary to competition.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GRADING AND BUSH HOG )

SERVICES, INC., )

)

Petitioner, )

)

vs. ) Case No. 03 - 1484BID

)

DEPARTMENT OF TRANSPORTATION, )

)

Respondent, )

)

and )

)

FLORIDA YOUTH )

CONVERSATION CORPS, )

)

Intervenor. )

)

RECOMMENDED ORDER

A formal hearing was conducted pursuant to notice before

the Division of Administrative Hearings by Stephen F. Dean,

Administrative Law Judge, on May 22, 2003, in Tallahassee,

Flori da.

APPEARANCES

For Petitioner: Brant Hargrove, Esquire

Law Office of Brant Hargrove

2984 Wellington Circle, West

Tallahassee, Florida 32308

For R espondent: John C. Bottcher, Esquire

Department of Transportation

Haydon Burns Building, Mail Station 58

605 Suwannee Street

Tallahassee, Florida 32399 - 0458

For Intervenor: Timothy Patrick Driscoll, Esquire

Timothy Patrick Driscoll, P.A.

101 First Avenue South, Suite 340

St. Petersburg, Florida 33701

STATEMENT OF THE ISSUE

Whether Respondent's proposed award of a contract to

Intervenor is contrary to statutes, rules, policies, or the bid

specifications, pursuant to Section 120.57(3)(f), Florida

Statutes.

PRELIMINARY STATEMENT

On January 14, 2 003, the Department of Transportation (DOT)

advertised an Invitation to Bid (ITB). Petitioner, Grading and

Bush Hog Services, Inc.; Intervenor, Florida Youth Conservation

Corps; and others, responded. There was no protest to the terms

of the ITB. DOT an nounced its intent to award the bid to

Intervenor, who had the low bid. Petitioner filed this protest

and Intervenor intervened.

The case was forwarded to the Division of Administrative

Hearings, where it was noticed for hearing on May 22, 2003.

At hearing, the parties stipulated to the facts.

The parties filed post - hearing submissions which have been

read and considered in the preparation of this Recommended

Order.

An extended hearing in another city for three weeks caused

a delay in the pr eparation of this order. This Order was

delayed as a result.

FINDINGS OF FACT

1. On January 14, 2003, Respondent advertised for bids by

way of an invitation to bid (ITB) for Contract Number E3C42,

Maintenance Financial Project Number 40952917201. This would be

a "Push Button" contract for the replacement of damaged

guardrails along various roadways in Okaloosa and Walton

Counties. Pursuant to this Contract, the successful bidder

would respond upon notice, and repair or replace guardrails, or

take other measures to ensure safety of the traveling public.

2. The bid solicitation and contract were issued pursuant

to Section 337.11, Florida Statutes. All bidders had to certify

compliance with Florida Statutes and other applicable law, and

all contractor s were held to strict compliance with all legal

requirements. There were no protests to the terms and

conditions of the bid solicitation. The instant challenge does

not allege non - compliance with the statutes or terms of the ITB

generally.

3. The chall enge is whether award of the bid to

Intervenor, as a non - profit corporation, is "contrary to

competition."

4. This maintenance contract does not require that the

contractor be pre - qualified pursuant to Section 334.14, Florida

Statutes, and Rule Chapte r 14 - 22, Florida Administrative Code.

5. Four bidders responded to the solicitation, with the

apparent low bidder being Intervenor, and the apparent second

low bidder being Petitioner. Respondent posted its intended

award of the contract to Intervenor , and Petitioner timely filed

a protest that initiated this proceeding.

6. Intervenor is a not - for - profit corporation created

under the provisions of Chapter 617, Florida Statutes. As such,

pursuant to Sections 617.0301 and 617.2001, Florida Statutes,

I ntervenor can engage in any lawful purpose not for pecuniary

profit. As a not - for - profit corporation, Intervenor may receive

certain tax breaks and other economic advantages not enjoyed by

a for - profit corporation.

7. Petitioner is a for - profit corpora tion.

8. No evidence exists that Intervenor is not capable and

responsible to perform the work.

9. Intervenor is qualified to contract with Respondent for

the performance of work related to the construction and

maintenance of transportation - related f acilities by youths

enrolled in youth work experience programs, pursuant to Section

334.351, Florida Statutes. Respondent spends appropriations

under this section, and Intervenor is the recipient of such

contracts. However, the instant contract will not be let under

Section 334.351, Florida Statutes, but pursuant to Section

337.11, Florida Statutes.

CONCLUSIONS OF LAW

10. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of these

proceedings pursuan t to Sections 120.569 and 120.57(3), Florida

Statutes (2002).

11. The sole legal issue to be resolved in this proceeding

is whether Respondent is limited under Section 337.11, Florida

Statutes, in awarding and entering into the subject contract

with In tervenor because of Intervenor’s not - for - profit corporate

status.

12. As found above, there were no protests to the terms

and conditions of the bid solicitation. Those terms did not

limit those corporations that could bid to for - profit

corporations only . Therefore, any challenge presented at this

juncture must be to substantive application of those terms.

13. The essence of Petitioner’s argument is that

Respondent cannot contract with Intervenor because Intervenor

enjoys a competitive advantage over Pe titioner in violation of

the standards for competitive bidding as codified in Subsection

120.57(3)(f), Florida Statutes, which provides:

[T]he burden of proof shall rest with the

party protesting the proposed agency action.

In a competitive - procurement p rotest, other

than a rejection of all bids, proposals or

replies, the administrative law judge shall

conduct a de novo proceeding to determine

whether the agency's proposed action is

contrary to the agency's governing statutes,

the agency's rules or polici es, or the

solicitation specifications. The standard

of proof for such proceedings shall be

whether the proposed agency action was

clearly erroneous, contrary to competition,

arbitrary, or capricious. . . .

14. Petitioner raises no other disputes as to Respondent’s

compliance with its governing statutes, its rules or policies,

or the bid or proposal specifications. The central issue in

this proceeding is substantively whether awarding a contract to

a not - for - profit corporation would be “contrary to comp etition.”

15. “Contrary to competition” is best understood by its

plain and obvious meaning, i.e. , against or in opposition to

competition.

16. In Harry Pepper and Associates, Inc. v. City of Cape

Coral , 352 So. 2d 1190,1192 (Fla. 2d DCA 1977), one of th e

stated purposes of the bidding process is “to afford an equal

advantage to all desiring to do business” with the government.

Petitioner's question is whether allowing a not - for - profit

corporation to bid on DOT contracts is “contrary to competition”

beca use the not - for - profit firm has an advantage in having to

make a profit.

17. The ITB solicitation for the subject contract was

silent on participation by not - for - profit corporations. Such

firms have to compete on the same terms and specifications as a

fo r - profit firm. These terms were not challenged. Bidders are

on equal footing regarding the awarding of the contract, and any

corporation may bid without restriction. To the extent that a

non - profit company may not have to show a profit for its owners

an d be able to do the work more cheaply, this inures to the

benefit of the taxpayer. The result is not contrary to

competition, i.e. , to get the work done for the best price.

There is no requirement that any bidder include within its bid a

profit. Therefo re, Respondent’s award of the contract to

Intervenor is not contrary to competition.

18. Whether Intervenor is acting outside its Articles of

Incorporation or beyond the boundaries of Chapter 617, Florida

Statutes, is outside the jurisdiction of Responden t to determine

in the context of a bid award, and the terms of the ITB were not

challenged.

19. Petitioner also asserted that Section 334.351, Florida

Statutes, might preclude the award of the contract to

Intervenor. That section provides:

334.351 Youth work experience program;

findings and intent; authority to contract;

limitation. -- The Legislature finds and

declares that young men and women of the

state should be given an opportunity to

obtain public service work and training

experience that protects a nd conserves the

valuable resources of the state and promotes

participation in other community enhancement

projects. Notwithstanding the requirements

of chapters 287 and 337, the Department of

Transportation is authorized to contract

with public agencies and nonprofit

organizations for the performance of work

related to the construction and maintenance

of transportation - related facilities by

youths enrolled in youth work experience

programs. The total amount of contracts

entered into by the department und er this

section in any fiscal year may not exceed

the amount specifically appropriated by the

Legislature for this program.

20. The parties agree that Respondent receives and spends

appropriations under Section 334.351, Florida Statutes, and that

Interv enor is the recipient of such contracts. However, the

subject contract is not issued pursuant to Section 334.351,

Florida Statutes, but is issued pursuant to Section 337.11,

Florida Statutes. Therefore, the instant contract is not

subject to the fiscal l imitations imposed on work done under

Section 334.351, Florida Statutes. The subject contract is

being let pursuant to competitive solicitation under Section

337.11, Florida Statutes.

21. Respondent’s proposed award of the subject contract to

Intervenor is not contrary to statutes, Respondent’s rules or

policies, nor the specifications of the ITB.

RECOMMENDATION

Based on the foregoing Findings of Facts and Conclusions of

Law, it is

RECOMMENDED:

That the protest filed by Petitioner be dismissed and

Respondent shall award the subject contract to Intervenor .

DONE AND ENTERED this 24th day of July, 2003, in

Tallahassee, Leon County, Florida.

S

___________________________________

STEPHEN F. DEAN

Administrative Law Judge

Division of Administrative Hearing s

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 24th day of July, 2003.

CO PIES FURNISHED :

John C. Bottcher, Esquire

Department of Transportation

Haydon Burns Building, Mail Station 58

605 Suwannee Street

Tallahassee, Florida 32399 - 0458

Brant Hargrove, Esquire

Law Office of Brant Hargrove

2984 Wellington Circle, West

Tallahassee, Florida 32308

Timothy Patrick Driscoll, Esquire

Timothy Patrick Driscoll, P.A.

101 First Avenue South, Suite 340

St. Petersburg , Florida 33701

James C. Myers, Clerk of Agency Proceedings

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 th e right to submit written exceptions within

10 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.