03-002220BID Royal Concrete Concepts, Inc. vs. Broward County School Board Status: Closed Recommended Order on Thursday, November 20, 2003.

Summary: Respondent`s decision to reject all bids was not contrived or arbitrary, but based upon sound reasons discovered and fully exposed by an initial bid protest.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

ROYAL CONCRETE CONCEPTS, )

INC., )

)

Petitioner, )

) Case No. 03 - 2220BID

vs. )

)

BROWARD COUNTY SCHOOL BOARD, )

)

Respondent, )

)

and )

)

JAMES B. PIRTLE CONS TRUCTION )

COMPANY, INC., )

)

I ntervenor. )

)

PAD ULA & WADSWORTH )

CONSTRUCTION COMPANY , )

)

P etitioner, )

) Case No. 03 - 2221BID

vs . )

)

BROWARD COUNTY SCHOO L BOARD, )

)

R espondent , )

)

and )

)

J AMES B. PIRTLE CONST RUCTION )

COMPANY, INC., )

)

Intervenor. )

____________________ _________

RECOMMENDED ORDER

Pursuant to notice a formal hearing was held in these

cases on August 20 - 21, 2003, in Fort Lauderdale, Florida,

before J. D. Parrish, a designated Administrative Law Judge of

the Division of Administrative Hearings.

APPEARANCES

For Petitioner, Royal Concrete Concepts, Inc.:

Steven L. Schwartberg, Esquire

Schwarzberg & Associates

Esperante, Suite 210

222 Lakeview Avenue

West Palm Beach, Florida 33401

For Petitioner, Padula & Wadsworth Construction Inc.:

Thomas Shahady, Esquire

Adorno & Yoss, P.A.

350 East Las Olas Boulevard

Suite 1700

Fort Lauderdale, Florida 33301

For Respondent, School Board of Broward County, Florida:

Robert Paul Vignola, Esquire

Broward County School Board

Kathleen C. Wright Administrative Building

600 Southeast Third Avenue, 11th Floor

Fort Lauderdale, Florida 33301

For Intervenor, James B. Pirtle Construction Company,

Inc.:

Usher L. Brown, Esquire

Brown, Salzman, Weiss & Garganese, P.A.

Two Landmark Center, Suite 660

225 East Robinson Street

Orlando, Florida 32801

STATEMENT OF THE ISSUE

Whether the Respondent, School Board of Broward County,

Florida (Respondent or Board), may reject all bids as proposed

for Bid No. 2002 - 02 - FC, Group A1, or whether such action is

illegal, arbitrary, dishonest, or fraudulent.

PRELIMINARY STATEMENT

These ca ses came to the Division of Administrative

Hearings by way of an underlying matter (also a bid challenge)

during which case the Respondent determined it would reject

all bids submitted for the bid. The Petitioners, Royal

Concrete Concepts, Inc. (Royal), and Padula & Wadsworth

Construction, Inc. (Padula), timely filed protests to the

second decision; thereafter, the cases were scheduled for

hearing. The findings of fact that follow more completely

track the procedural course of this cause. The instant cas es

dealt solely with the Board's decision to reject all bids.

At the hearing the parties offered joint exhibits and

individual exhibits, all of which the transcript more fully

identifies. Similarly, all parties presented testimony of

witnesses. Those individuals are also identified and noted in

the transcript of this proceeding. At the conclusion of the

hearing, the parties stipulated that they would file proposed

recommended orders within 30 days of the filing of the

transcript. All parties substantial ly complied with that

stipulation and the P roposed R ecommended O rders have been

fully considered in the preparation of this R ecommended O rder.

FINDINGS OF FACT

1. The Respondent is the entity charged with the

responsibility of governing the public schools within the

Broward County School District. As such, the acquisition of

school properties and attendant improvements fall within the

Board's legal authority. These cases involve the procurement

of relocatable buildings suitable for classroom purposes.

2. Pursuant to its authority, on or about December 27,

2002, the Respondent issued a bid that is the subject matter

of the instant challenge. The bid, identified in this record

as Bid 2002 - 02 - FC, sought proposals for the procurement of

district - wide

relocatable buildings. In a prior time these buildings were

known as "portable classrooms" or "portables."

3. In the post - Hurricane Andrew world, these structures

are now pre - engineered and constructed of concrete or steel

(or a hybrid of both) and must be, b y design, capable of being

relocated to various sites. The Petitioners, Royal and Padula

jointly, and the Intervenor, James B. Pirtle Construction

Company, Inc. (Pirtle or Intervenor), design, construct, and

install such structures.

4. In these cases the bid sought several distinct

proposals. First, the project sought vendors who would

provide and deliver concrete relocatable buildings (Group A1).

Group A2 (not at issue in this proceeding) sought steel

relocatable buildings. Group B (also not at issue in the

instant case) sought site adaptation prices for landscaping,

lighted covered walkways, steps, ramps, and other engineering

incidental to the installation of the buildings.

5. The advertisement for the bid carried the same

generic information as to all groups. The bid documents also

contained many terms that were applicable to all groups.

6. Pertinent to the issues of these cases are the

following excerpts from the bid document (Joint Exhibit 2).

The order of

the excerpts should not suggest any significance. The

excerpts are listed in this manner solely for convenience

sake:

BASIS OF AWARD

In order to meet the needs of the school

system . . . each Award will be . . . up to

three responsive and responsible bidders

meeting specifications, terms and

conditions. Individual projects will be

issued . . . based upon lowest cost among

one or more bidders per project as

determined by the project manager.

Therefore, it is necessary to bid on every

item in the group, and all items in the

group must m eet specifications in order to

have the bid considered for award. Unit

prices must be stated in the space provided

on Document 00410 Bid Form. SBBC [the

Respondent] reserves the right to procure

goods from the second and third lowest

bidders if: a) the lowest bidder cannot

comply with delivery requirements or

specifications; b) the lowest bidder is not

in compliance with delivery requirements or

specifications on current or previous

orders; c) in cases of emergency; d) work

may be issued to multiple contr actors if in

the opinion of The School Board of Broward

County, Florida or its staff the work

cannot be completed by a single contractor

in the specified time such as a Summer,

Winter or Spring Break or if it is in the

best interest of SBBC to do so regardless

of reason.

ARTICLE 4 BIDDING PROCEDURES

4.01 FORM AND STYLE OF BIDS

A. Bids shall be submitted on forms

identical to Document 00410, Bid Form, and

other standard forms included with the

Bidding Documents. The following documents

are required to be submitted with the Bid:

* * *

6. SIGNED SEALED ARCHITECTURAL AND

ENGINEERING DESIGN DRAWINGS OF THE

STRUCTURES TO BE PROVIDED (FOR RELOCATABLE

BUILDINGS BID ONLY)

5.03 REJECTION OF BIDS AND IRREGULAR

PROPOSALS

* * *

C. The Owner shall have the right to

reject any or all Bids, reject a Bid not

accompanied by a required bid security,

good faith deposit, or by other data

required by the Bid Documents, or reject a

Bid which is in any way incomplete,

irregular or otherwise not Responsive. Th e

Owner may waive any formality in the bid

requirements and award or not award the

contract in the best interests of The

School Board of Broward County, Florida.

(Emphasis in original not shown)

7. In addition to the foregoing, the bid documents

contained detailed and specific design criteria that set forth

information such as the slope of roofs, the roof spans, the

mechanical systems, ventilation, plumbing, windows, and

stoops. These design criteria covered hundreds of topics and

encompassed virtually e very facet of the structures. To

review each bid proposal as to whether each design

specification was met would require countless man - hours.

8. The issue of how to review the bid proposals was not

adequately anticipated by the Respondent. From the outset the

bid document evolved from unusual circumstances. Whether the

bid document was intended to be a request for proposals (RFP)

or an invitation to bid (ITB) was a primary confusion among

the Board's staff. If the proposals were to be deemed

responsive or not and then ranked solely on price (thus making

the bid process more like an ITB) how could staff effectively

determine the threshold question of responsiveness? If the

proposals were to be ranked based upon a point or qualitative

approach (more like an RFP) where were the criteria by which

to score the proposals? In fact, there were no objective

criteria disclosed in the bid document by which a proposal

could be evaluated.

9. More curious is that no bidder brought this lack of

evaluation criteria to the Board's attention during the

mandatory bidder's conference. Moreover, no one challenged

the bid specifications. Presumably, the bidders believed it

was an "all or nothing" award. That is, if they were the

lowest responsive bidder, they would receive the award. The

question of who would be responsive and how that decision

would be resolved did not come to light until after the bids

had been opened.

10. At the mandatory bidders' conference conducted on

January 14, 2003, the bidders posed questions i n the form of

requests for information. In response, the Respondent issued

six addenda intended to cover the questions posed. None of

the responses addressed how the bid proposals would be

evaluated.

11. If anything, Addendum No. 3 added to confusion

related to what documents must be submitted with the bid

proposal. More specifically, Addendum No. 3 provided, in

pertinent part:

[Addendum 3, question and response to

inquiry]

9. Can schematics be submitted with the

bid instead of the signed and sealed

architectural and engineering design

drawings of the structures that are

requested in Document Article 4.01.A.6?

Response: Signed and Sealed

Architectural/Structural Drawings are

required to be submitted with the Bid. The

Requirement for Mechanical and Electrical

signed and sealed drawing is waived,

however all engineering associated with the

Relocatable Buildings will require engineer

of record signed and sealed drawings and

calculations prior to issuance of building

permit DRC review.

12. Nevertheles s, when the bid proposals were opened on

March 4, 2003, the Petitioners and the Intervenor were found

to be the three lowest bidders. If responsive, the Intervenor

would be considered the lowest bidder with the Petitioners

being considered alternate vendors for the procurement.

13. Unsatisfied with the preliminary determination that

the Intervenor was the lowest bidder, the Petitioners timely

challenged the bid award. The Petitioners maintained that the

Intervenor had not timely provided sealed design dr awings as

required by the bid document. Petitioners argued that the

Intervenor had attempted to impermissibly amend their proposal

by late - filing a set of structural drawings for the bid.

14. Thus the initial bid protest sought to determine

what design drawings were required by the bid and whether the

Intervenor had timely supplied such drawings. The Petitioners

contended that the Intervenor's submittal should be rejected

as non - responsive to the bid. Whether they had complied with

the full dictates o f the bid requirements was potentially at

issue as well.

15. While the initial bid protest was referred to the

Division of Administrative Hearings and scheduled for formal

hearing, the parties continued to attempt to resolve the

issues. It was apparent that the bidders had not submitted

identical proposals. How the proposed products had been

compared and evaluated was difficult to determine.

16. From the Respondent's committee members came the

disclosure that the decision of determining whether the

bid ders had complied with the bid ultimately came from three

fashioned questions. If the structure proposed was pre -

engineered, relocatable to various sites, and suitable for

educational purposes, the entry was deemed responsive. Based

upon this assessment the Petitioners and the Intervenor were

deemed responsive and their bids ranked based upon price.

17. This approach did nothing to discern if the designs

were comparable in quality, if they met the bid design

criteria, or if the drawings were even suffi cient to comply

with the dictates of the bid.

18. The first posting of the bid award for Group A1 was

entered March 18, 2003.

19. On March 21, 2003, the Petitioners timely filed

their notices of intent to protest the award of Group A1 to

the Intervenor. Thereafter they timely filed the petitions to

protest the award and the initial protest was forwarded to the

Division of Administrative Hearings. The protests did not

encompass Group A2 or Group B.

20. No bidder protested the proposed awards for Gro up A2

or Group B. In fact, the Respondent went forward on those

procurements and awarded contracts for those groups on April

1, 2003. The Respondent did not award the contract award for

the Group at issue in this proceeding.

21. It must be noted that the instant procurement is not

the Board's first experience with the procurement of concrete

relocatable classrooms. In fact, the Board has purchased

similar structures through a procurement contract that the

Palm Beach County School Board holds with its v endors. One of

the Respondent's concerns when the instant bids were reviewed

was why the cost per unit for the bids in this case was higher

than the Palm Beach County amount. As it turned out, the

installation economy of multiple units at one site directly

impacts the cost of the relocatable structures. Royal

confirmed this information after the bids had been opened.

22. When the Respondent's staff met with its counsel in

preparation for the initial bid dispute (before the Board

elected to reject all bi ds) the cost of the bid, the lack of

full evaluation of the bidders' proposals, and the issues of

the first protest were openly discussed. By that time any

irregularities with the bid documents could not be repaired as

to the contracts

already awarded, but as to the instant matter the Respondent

could revisit the circumstances and determine its best course.

23. As a result of that reassessment, the Respondent

elected to reject all bids regarding this group and attempt to

re - bid the procurement with more certain terms. To that end

on May 9, 2003, the Respondent issued a revised bid decision

that provided in pertinent part:

The Facilities and Construction Management

Division intends to recommend that The

School Board of Broward County, Florida, at

the School Board meeting on June 3, 2003,

reject all bids received for Group A1 and

authorize revising the bidding documents

and re - bidding. The rejection of all bids

received for Group A1 is made due to

serious flaws and ambiguities contained in

Document 00200 4.01.A - 6 as modified by

Addendum No. 3. The Division intends to

revise the bidding documents to delete the

requirements that bidders submit plans with

the bids; include ranges of unit quantities

within the bid form; include one or more

additional types of construction of the

classroom buildings including a composite

concrete/steel structure; and incorporate

within the new Invitation to Bid all

revised terms and conditions that were

released through addenda in this

procurement.

24. The Petitioners timely filed protests regarding this

new decision by the Board and the instant action ensued.

25. By issuing the revised decision to reject all bids

the Respondent intended to resolve all issues and to cure the

perceived problem with the lack of consistent evaluation of

the bidders' proposals. More specifically, the Respondent

would be able to assure that the project design could comport

with the specifications sought; specify whether architectural

or engineering drawings were required and when (it was hoped

th at the confusion over "architect" vs. "engineer" could be

eliminated); and obtain a substantial discount based upon

economies from multi - unit purchases for a single site. None

of the objectives sought were pre - textual or contrived.

Additionally, by avoiding any process that would require a

detailed reviewed of the bidders' proposals, countless man -

hours could be saved.

CONCLUSIONS OF LAW

26. The Division of Administrative Hearings has

jurisdiction over the parties to and the subject matter of

these proc eedings. § § 120.569 and 120.57(3), Fla. Stat.

(2003).

27. All parties have standing in this matter. The

Petitioners and the Intervenor have demonstrated their

interests will be materially affected by the decision of the

Board in connection with this bid. This conclusion is reached

based upon the determination that the Intervenor was

designated the primary vendor on the initial bid tabulation

and the Petitioners were each considered to be responsive

vendors that could conceivably receive orders under th e award.

28. The standard of review in this matter is set forth

by statute. Section 120.57(3)(f), Florida Statutes, provides

in pertinent part:

. . . Unless otherwise provided by statute,

the burden of proof shall rest with the

party protesting the proposed agency

action. . . . In any bid - protest

proceeding contesting an intended agency

action to reject all bids, proposals, or

replies, the standard of review by an

administrative law judge shall be

whether the agency's intended action is

illegal, arbitra ry, dishonest, or

fraudulent.

29. The Petitioners must therefore establish that the

Board action to reject all bids is illegal, arbitrary,

dishonest, or fraudulent. In contrast, if the decision is

supported by rational, legal, honest, and unambiguous

reasoning such decision should stand. This conclusion is

based upon the premise that the Board has wide discretion in

this matter that should not be overturned even if reasonable

persons might disagree. See Scientific Games, Inc. v. Dittler

Brothers, Inc. , 586 So. 2d 1128 (Fla. 1st DCA 1991).

30. Essentially, these cases turn on the issue of

whether or not the Board's decision to reject all bids is

arbitrary. The Petitioners argue that the Board's decision to

reject all bids was contrived after it realized the initial

bid protest was meritorious as to the Intervenor's failure to

submit required documen ts. If the Board's decision wa s

contrived to meet the factual circumstances of these cases,

the decision may not stand.

31. If the bid process was seriou sly flawed as claimed

by the Board, despite the Petitioners' protest to the

contrary, the rejection of all bids should be upheld. In

Caber Systems, Inc. v. Department of General Services , 530 So.

2d. 325 (Fla. 1st DCA 1988) the court was faced with a similar

dilemma. The Caber decision proves instructive in this

matter.

32. In Caber the court found that when the agency in its

process to review a bid protest discovered valid grounds for

rejecting all bids (for reasons that were neither arbitrary or

cap ricious) it was authorized to do so. Similarly, when

preparing for the hearing in the underlying or initial protest

in these cases, the Respondent discovered all of the

underlying facts that gave rise to its decision to reject all

bids. Those underlying facts were neither contrived nor

arbitrarily determined.

33. In fact, as the history and circumstances of this

bid process became more studied, the basis for determining who

should prevail and how the Board's employees should fairly

review the proposals became more mired in the uncertainty of

the tainted process. If price were to be the sole determining

factor, the remainder of the specifications would prove

meaningless and, more significantly to the Board's concerns,

perhaps unenforceable. If the engineering and qualitative

specifications were to bear weight, how were the proposals to

be fairly reviewed? There were no performance standards by

which a committee might assign points or ratings.

34. The three criteria by which all applicants were

initi ally reviewed did not address specific items listed among

the design requirements. Moreover, none of the bidders knew

or could have known that the design criteria would be waived

in whole or part. Clearly a proposal that did not include the

waived item could receive a financial advantage over a

competitor who included the item. Arguably, the price of any

proposal that included the waived item would be higher. For

example, if the bid design called for a covered doorway into

the unit and a bidder failed t o include that item, the cost

basis for the uncovered entry would arguably be less than the

unit that offered the covered doorway.

35. But in truth, the Board did nothing to attempt to

resolve the issues of whether the designs submitted by the

parties fairly or fully met the design items requested by the

bid. Instead, faced with hours of evaluation, the committee

members "contrived" three questions to determine if the

proposal could be deemed responsive. The initial protest

exposed the inadequacy of th is approach. When called on the

matter and when forced to evaluate the proposals from the

dictates limited by the four corners of the bid document, it

was apparent that the only fair resolution was to reject all

bids. That is exactly what the Board attempted to do.

36. In order to cure the problems discovered through the

review of this bid process the Board elected to take the

matter back to the drawing board and to begin the process

anew. This decision will hopefully result in clear

specifications an d review criteria. If the Board wants a

"concrete reinforced structure" it can define specifically

what that term means. If the Board is willing to accept a

steel structure with an applied concrete coating, it can do

so. If hybrid buildings are acceptable all parties will know

what is acceptable. More important, the Board will be able to

determine and disclose if price alone will drive the award of

the bid. If the Board wants the flexibility to award design

points for choosing a higher standard (and th ereby assume a

higher cost) all parties will be aware of the potential to

build that flexibility to their proposal. Currently, there is

no way to determine if the parties were submitting the same

quality product. No assessment was or could be made to yield

that determination. Accordingly, the Board's decision to

reject all proposals must be upheld.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions

of Law, it is RECOMMENDED that the School Board of Broward

County enter a Final Order a ffirming the decision to reject

all bids in this matter.

DONE AND ENTERED this 20th day of November 2003 in

Tallahassee, Leon County, Florida.

S

___________________________________

J. D. PARRISH

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675 SUNCOM 278 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 20th day of November 2003.

COPIES FURNISHED:

Dr. Franklin L. Till, Jr.

Superintendent

Broward County School Board

600 S outheast Third Avenue

Fort Lauderdale, Florida 33301 - 3125

Daniel J. Woodring, General Counsel

Department of Education

325 West Gaines Street

1244 Turlington Building

Tallahassee, Florida 32399 - 0400

Usher Larry Brown, Esquire

Brown, Salzman, Weiss & Garganese, P.A.

225 East Robinson Street, Suite 660

Orlando, Florida 32801

Steven L. Schwarzberg, Esquire

Schwarzberg & Associates

Esperante, Suite 210

222 Lakeview Avenue

West Palm Beach, Florida 33401

Thomas R. Shahady, Esquire

Adorno & Yoss, P.A.

350 East Las Olas Boulevard, Suite 1700

Fort Lauderdale, Florida 33301

Robert Paul Vignola, Esquire

Broward County School Board

K. C. Wright Administrative Building

600 Southeast Third Avenue, 11th Floor

Fort Lauderdale, Florida 33301

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the 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.