03-002374BID Granite Construction Company Of California vs. Department Of Transportation Status: Closed Recommended Order on Monday, August 25, 2003.

Summary: Pet. failed to prove proposed award of road const. contract was contrary to statute, agency policy, or bid specifications, although Agency knew prior to the award that est. quantity for 1 pay item was wrong. Deny protest; award to intervenor.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

GRANITE CONSTRUCTION COMPANY OF )

CALIFORNIA, )

)

Petitioner, )

)

vs. ) Case No. 03 - 2374BID

)

DEPARTMENT OF TRANSPORTATION, )

)

Respondent, )

)

and )

)

GILBERT SOUTHERN CORPORATION, )

)

Intervenor. )

)

RECOMMENDED ORDER

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

on July 28, 2003, in Tallahassee, Florida, before T. Kent

Wetherell, II, the designated Administrative Law Judge o f the

Division of Administrative Hearings.

APPEARANCES

For Petitioner: William E. Williams, Esquire

J. Andrew Bertron, Jr., Esquire

Huey, Guilday, Tucker, Schwartz,

and Williams, P.A.

1983 Centre Point Boulevard, Suite 200

Post Office Bo x 12500

Tallahassee, Florida 32317 - 2500

For Respondent: Robert C. Downie, II, Esquire

Department of Transportation

Haydon Burns Building, Mail Station 58

605 Suwannee Street

Tallahassee, Florida 32399 - 0458

For Intervenor: Christopher T. Mc Rae, Esquire

McRae & Metcalf, P.A.

1677 Mahan Center Boulevard

Tallahassee, Florida 32312

STATEMENT OF THE ISSUE

The issue is whether the Department of Transportation’s

proposed award of the contract for FIN Project Nos. 25840115201,

25840115602, and 25841005603 to Intervenor is contrary to the

Department’s governing statutes, rules, policies, or the bid

solicitation specifications.

PRELIMINARY STATEMENT

On May 22, 2003, the Department of Transportation

(Department) posted notice of its intent to award the contract

for a construction project known as Interstate 4 Reconstruction,

14th Street to 50th Street, Hillsborough County, Florida, FIN

Project Nos. 25840115201, 25840115602, and 25841005603 (the

Project) to Intervenor. Thereafter, Petitioner ti mely filed a

notice of protest and a formal written protest (Protest) with

the Department challenging the proposed award. The Protest

requested that the Department refer the matter to the Division

of Administrative Hearings (Division) for the assignment o f an

Administrative Law Judge to conduct a formal hearing. The

Department referred the Protest to the Division on June 25,

2003.

Intervenor filed a motion to intervene with the Department,

and that motion was referred to the Division along with the

Prot est. The motion was granted by Order dated June 30, 2003.

In accordance with the expedited time frame established by

Section 120.57(3)(e), Florida Statutes, the final hearing was

initially set for July 22 and 23, 2003. The hearing was

subsequently resch eduled for July 28 and 29, 2003, at the

request of the parties.

On June 25, 2003, before the matter was referred to the

Division, Intervenor filed a motion to dismiss the Protest on

the theory that it is actually an untimely challenge to the bid

specifica tions rather than a timely challenge to the proposed

award of the contract. The Department joined Intervenor's

motion through a filing dated June 30, 2003. The motion to

dismiss was denied through a detailed Order dated July 11, 2003,

and the case procee ded to final hearing on July 28, 2003.

At the hearing, Petitioner presented the testimony of

Jeffrey Wittmann, J.C. Miseroy, Robert Szatynski, Teresa

Driskell, and Juanita Moore. Petitioner's Exhibits P1 - A, P1 - B,

P1 - C, P3, P4, P7, and P8 were received in to evidence. Neither

the Department nor Intervenor presented the testimony of any

witnesses at the hearing. Exhibits R1, R2, and R5 through R11,

which were jointly introduced by the Department and Intervenor,

were received into evidence. The parties' Joint Exhibits J1

through J27 were also received into evidence.

The two - volume Transcript of the hearing was filed with the

Division on August 4, 2003. The parties were given ten days

from the date that the Transcript was filed to file their

proposed rec ommended orders (PROs). The parties' PROs were

timely filed and were given due consideration by the undersigned

in preparing this Recommended Order.

All statutory references are to the 2002 codification of

the Florida Statutes, unless otherwise indicated.

FINDINGS OF FACT

Based upon the testimony and evidence received at the

hearing and the stipulations set forth in the parties'

Pre - Hearing Stipulation, the following findings are made:

A. Parties

1. The Department is the state agency responsible for

construction and maintenance of the State highway system, which

includes Interstate 4. The Department is the contracting agency

for the Project at issue in this proceeding.

2. Petitioner and Intervenor are corporations engaged in

the business of roa d and bridge construction, and they both

submitted bids for the Project.

3. Intervenor was determined by the Department to be the

lowest responsible bidder for the Project, and Petitioner was

determined to be the next lowest responsible bidder.

4. Peti tioner and Intervenor both have the requisite

standing in this proceeding.

B. Overview of the Project

5. The Project involves the widening and "reconstruction"

of approximately three miles of Interstate 4 in Hillsborough

County between 14th Street and 5 0th Street.

6. The Project is located in the Department's District

Seven.

7. The Department's initial cost estimate for the Project

was $148.5 million, making this the most expensive project ever

in District Seven.

8. The Project is being funded pr imarily by federal funds

from the U.S. Department of Transportation, Federal Highway

Administration (FHWA).

9. The high per - mile cost of the Project is a result of

the complexity of the Project due to its location in an urban

environment and the numerou s bridges included in the Project.

C. Bid Documents

10. The Department issued a Bid Solicitation Notice

(Notice) for the Project on February 28, 2003.

11. The Notice provided a general description of the

Project and informed prospective bidders how the y could obtain

the plans and specifications for the Project.

12. The Notice also included a list of the pay items for

the Project. That list included "approx[imate]" quantities for

each item, and was "not for bidding purposes."

13. The plans and specifi cations for the Project included

a Summary of Pay Items, sheets 2 through 16D (Summary), which

listed the pay items for the Project, as well as the estimated

quantity for each item.

14. More than 400 pay items were listed in the Summary,

including Item No. 2534 - 72 - 12, Barrier Wall Noise (the "noise

wall").

15. The noise wall is an aesthetic feature. Its purpose

is to reduce the amount of roadway noise that can be heard on

adjacent property. The noise wall is free - standing and is not

structurally connected to the roadway or other aspects of the

Project.

16. It is possible that the noise wall may be deleted from

the Project during construction. However, bidders were required

to bid on the noise wall since it is shown in the plans and is

listed as a pay item in the Summary and on the proposal form.

17. The estimated quantity for the noise wall provided in

the Summary is 1,453 meters squared (m 2 ), which is the same as

the "approx[imate]" quantity that was shown in the Notice.

18. That same figure -- 1,453 m 2 -- is provided for the noise

wall on the proposal form. The proposal form is commonly

referred to as the "bid blank."

19. The bid blank was provided to the prospective bidders

in electronic format. It lists each pay item for the Project,

and for each ite m, it specifies the item number, item

description, and estimated quantity.

20. The bidders were required to insert their bid or unit

price for each pay item directly into the electronic bid blank

form. The bidders could not change the estimated quantitie s

shown on the bid blank. If a bidder attempted to do so, its bid

would have been rejected as nonresponsive.

21. Once the bid/unit prices are inserted into the

electronic bid blank form, the bid amount is automatically

calculated for each pay item by mul tiplying the estimated

quantity shown on the form by the bidder's bid/unit price. The

bidder's total bid is then automatically calculated by adding up

the bid amounts for each pay item.

22. The bid documents 1 incorporated by reference the 2000

edition of the Department's Standard Specifications for Road and

Bridge Construction (Standard Specifications).

23. Section 2 - 3 of the Standard Specifications, entitled

"Interpretation of Estimated Quantities," explains the purpose

and significance of the estimate d quantities set forth in the

bid documents. That provision states:

For those items constructed within

authorized plan limits or dimensions, use

the quantities shown in the plans and in the

proposal form as the basis of the bid. The

Department will als o use these quantities

for final payment as limited by the

provisions for the individual items. For

those items having variable final pay

quantities that are dependent upon actual

field conditions, use and measurement, the

quantities shown in the plans an d in the

proposal form are approximate and provide

only a basis for calculating the bid upon

which the Department will award the

Contract. . . .

The Department may increase, decrease, or

omit the estimated quantities of work to be

done or to be furnishe d.

24. The estimated quantities shown in the bid documents

are not necessarily the actual quantities that will be built on

the Project. It is important, however, that the estimated

quantities be as accurate as possible so that the Department can

develop a reasonably accurate cost estimate for budgeting

purposes and so that contractors can have a good idea of the

resources that they will need to devote to construction when

they are formulating their bids.

25. Section 3 - 1 of the Standard Specifications, en titled

"Consideration of Bids," informed bidders how the Department

would determine the lowest bid for the Project. That provision

states that:

[F]or purposes of award, after opening and

reading the proposals, the Department will

consider as the bid the c orrect summation of

each unit bid price multiplied by the

estimated quantities shown in the proposal

form.

26. The "proposal form" referenced in Section 3 - 1 of the

Standard Specifications is the official form on which the

Department requires formal bids to be prepared and submitted.

It is the same as the "bid blank" described above.

D. Pre - bid Phase

27. Petitioner ordered the plans and specifications for

the Project on March 3, 2003. The Department sent the plans and

specifications to Petitioner on Mar ch 4, 2003.

28. Petitioner received the plans and specifications

approximately two weeks prior to the mandatory bidders'

meeting/"pre - bid conference" held on March 31, 2003.

29. The pre - bid conference was attended by two of

Petitioner's employees. Neither of those employees asked

questions regarding the estimated quantity for the noise wall,

although they each asked questions regarding other elements of

the Project.

30. The Transcript of the pre - bid conference reflects that

no other bidder asked about the estimated quantity for the noise

wall either, even though the noise wall was mentioned on several

occasions at the conference, and a question was asked about the

quantity shown for another item listed in the specifications.

31. At some point after the pr e - bid conference,

Petitioner's senior estimator, Jeffrey Wittmann, calculated

"take - offs" for all of the walls in the Project, including the

noise wall. This is a standard practice done in the course of

putting together a bid.

32. The purpose of a take - o ff is to verify the accuracy of

the estimated quantities in the bid documents and to calculate

the work and materials that will be required to perform the

contract. A take - off converts the graphical information shown

in the plans for an item to a numerica l amount for that item,

and is done by using the plans and specifications for the

Project and the Department's standard computation manual.

33. The take - off calculated by Mr. Wittmann for the noise

wall was 3,809 m 2 , which is more than two - and - a - half time s the

estimated quantity of 1,453 m 2 shown in the bid documents.

34. The Department's contact person for the Project was

Teresa Driskell.

35. Ms. Driskell began receiving questions about the

accuracy of the estimated quantity for the noise wall in late

Ma rch or early April. The first question regarding that issue

came from Intervenor.

36. Intervenor questioned the estimated quantity shown for

the noise wall in the Summary and the bid blank because its

take - off showed the estimated quantity to be significa ntly more

than 1,453 m 2 .

37. Ms. Driskell referred Intervenor's question to Robert

Szatynski, the Department's outside consultant and engineer of

record for the Project, and asked him to formulate a response.

38. Mr. Szatynski directed a member of his s taff to review

the computations and spreadsheets from which the estimated

quantity for the noise wall was originally computed. Based upon

the results of his staff's review, Mr. Szatynski responded to

Ms. Driskell that the 1,453 m 2 figure was correct.

39. Ms. Driskell forwarded that response to Intervenor,

but not to other prospective bidders. Ms. Driskell followed a

similar pattern with respect to other inquiries; she provided

the response only to the prospective bidder who made the

inquiry.

40. Ms. Dri skell continued to get questions from other

prospective bidders, including Petitioner through Mr. Wittmann,

regarding the accuracy of the estimated quantity for the noise

wall.

41. On Friday, April 18, 2003, Ms. Driskell asked Richard

Frank, the Departmen t's in - house construction manager for the

Project, to take a look at the questions being raised by the

prospective bidders regarding the estimated quantity for the

noise wall.

42. Mr. Frank calculated his own take - off for the noise

wall, which only took h im about an hour. Mr. Frank's take - off

calculated an estimated quantity for the noise wall of 3,853 m 2 ,

which is very similar to Mr. Wittmann's calculation.

43. Based upon his take - off, Mr. Frank sent an e - mail to

Ms. Driskell which stated that he "agree[ d] with the concerns

that have been raised that the quantity [for the noise wall] is

in error" and that Ms. Driskell could "let the contractors know

that they are correct."

44. Mr. Frank's e - mail was sent to Ms. Driskell at

approximately 4:30 p.m. on April 18, 2003. A copy of the e - mail

was sent to Mr. Szatynski at the same time.

45. On the morning of Monday, April 21, 2003,

Mr. Szatynski sent an e - mail to Ms. Driskell concurring in

Mr. Frank's assessment. That e - mail stated that:

[W]e agree with [Mr. Fr ank] that the

original quantity shown in the plans is

inaccurate. The final quantity for [the

noise wall] should be 3893.9 m2. We will

send the updated quantity calculation sheet

for your use.

46. Later that same day, Mr. Szatynski sent Ms. Driskell a

revised area computation sheet for the noise wall. The sheet

specified a new quantity for the wall of 3,894 m 2 .

47. The spreadsheet used by Mr. Szatynski's staff to

calculate the original estimated quantity for the noise wall had

a mathematical error in i t. The heights and lengths for the

noise wall in the spreadsheet that were derived from a take - off

of the plans were correct, but the formula underlying the

spreadsheet failed to multiply those dimensions by the number of

panels needed for the noise wall. The error in the spreadsheet

was not known to or found by Mr. Szatynski or his staff when

they reviewed the noise wall quantity estimate in response to

Ms. Driskell's first request described above.

48. In recalculating the area of the noise wall,

Mr. S zatynski did not change any of the wall's dimensions in the

plans or any of the figures in his original take - off. He simply

corrected the formula underlying in the spreadsheet to include

the number of panels needed in the calculation.

49. Even though the Department knew that the estimated

quantity for the noise wall in the bid documents was

"inaccurate" and "in error," and even though it had been given

the corrected "final quantity" from Mr. Szatynski on April 21,

2003, the Department did not issue an add endum to change the

estimated quantity.

50. Addenda are issued by the Department's Tallahassee

office upon the request of the District office. The

"turn - around time" for an addenda varies based on nature and

extent of the change.

51. No changes to the plans were necessary to correct the

erroneous estimated quantity for the noise wall, and

Mr. Szatynski had already provided a corrected area computation

sheet. The only other thing that would have been necessary to

correct the noise wall quantity was a re vised electronic bid

blank and revised Summary page.

52. According to Juanita Moore, the Department's contract

administrator in Tallahassee for the Project, it would have only

taken "a few hours" to do an addendum to change the estimated

quantity for the n oise wall under such circumstances.

53. The decision not to issue an addendum to correct the

estimated quantity for the noise wall was made by Ms. Driskell

alone. She based her decision on a number of factors, including

the fact that the noise wall was a stand - alone item that was not

structurally related to the remainder of the Project and that it

might be deleted from the Project; the fact that the noise wall

was not a "major item of work;" 2 her estimate that the projected

cost overrun would be less than $1,000,000, which is less than

one percent of the total contract price; and her concern that

the plans would need to be revised or that it would take too

long to get an addendum approved.

54. In hindsight, Ms. Driskell clearly made the wrong

decision by not changing the estimated quantity for the noise

wall because her concerns about the time it would take for an

addendum and need for revisions to the plans were unfounded, she

underestimated cost overrun that the error would cause by

approximately $500,00 0, and it turned out that the ultimate

award of the contract hinges on that pay item. Nevertheless,

Ms. Driskell's decision not to seek an addendum to correct the

estimated quantity for the noise wall was not arbitrary or

illogical at the time that it was made.

55. The Department issued five formal addenda to the

Project specifications. The addenda were issued on March 17,

2003 (Addendum No. 1); April 7, 2003 (Addendum No. 2); April 17,

2003 (Addendum No. 3); April 22, 2003 (Addendum No. 4); and

April 29 , 2003 (Addendum No. 5).

56. The addenda were sent by overnight delivery to the

prospective bidders, and they contained instructions on how to

download the updated electronic bid blank form from the

Internet.

57. Addenda Nos. 4 and 5 were issued after Ap ril 21, 2003,

which is the date that the Department received confirmation from

Mr. Szatynski that the noise wall quantity estimate in the bid

documents was "inaccurate" and that the correct "final quantity"

was 3,894 m 2 . However, Addendum No. 4 was in the review process

prior to that date.

58. Addendum No. 4 changed the estimated quantities for

several pay items, including an eight - foot traffic railing

barrier wall (Item No. 2521 - 7 - 1), which Mr. Wittmann had

discussed with Ms. Driskell in connection with their discussions

regarding the noise wall. The change added approximately 1,100

meters to that pay item.

59. Using the unit prices bid for that item by Petitioner

and Intervenor, the financial impact of the change in the

quantity for the barrier wall ite m was between $500,000 and

$790,000. That amount is less than the financial impact of the

"error" in the estimated quantity for the noise wall.

60. On the afternoon of Friday, April 25, 2003,

Mr. Wittmann e - mailed Ms. Driskell and asked "[w]hy [there was ]

no change to the [noise wall] in addendum 4 as previously

discussed." Ms. Driskell did not respond to Mr. Wittmann's

e - mail, although as discussed below, she answered his question

in a telephone conversation on Monday, April 28, 2003.

61. Addendum N o. 5 was issued the day before the bid

submittal deadline. It changed the estimated quantity for Item

No. 2102 - 911 - 2 to correct an obvious scrivener's error.

62. At some point during the pre - bid phase, a bidder other

than Petitioner or Intervenor made a public records request for

all of the Department's responses to the questions asked by

prospective bidders. Ms. Driskell's supervisor directed her to

provide the information responsive to the public records request

to all of the prospective bidders.

63 . That information was not provided to the prospective

bidders in the form of an addendum; it was just "made available

to them" at the District Seven office on April 29, 2003.

Included in that information were Mr. Frank's e - mail stating

that the estimated quantity for the noise wall was "in error"

and Mr. Szatynski's e - mail concurring in that assessment and

providing a "final quantity" of 3,894 m 2 .

64. Ms. Driskell called each of the prospective bidders on

April 28, 2003, to inform them that the package o f information

could be picked up on April 29, 2003. During her conversation

with Mr. Wittmann, Ms. Driskell was again asked why the

estimated quantity for the noise wall had not been changed. She

told Mr. Wittmann that it was "too close to the letting" a nd

that "it would not be changed."

65. Ms. Driskell's response to Mr. Wittmann is somewhat

disingenuous because she had the necessary information since

April 21, 2003, to make a change in the noise wall quantity

through an addendum, and it would have taken only "a few hours"

to do so. Indeed, on April 21, 2003, Ms. Driskell's supervisor,

Brian McKishnie, told Ms. Driskell that she "need[ed] to tell

them [the bidders] to 'bid it [the noise wall] as you see it' or

get the corrected quantity to all bidders."

66. Although there is conflicting evidence regarding what

Ms. Driskell told Mr. Wittmann on and around April 21, 2003,

regarding the discrepancy in the estimated quantity for the

noise wall and the Department's intent to issue an addenda to

change the qua ntity, it is ultimately immaterial what

Mr. Wittmann was told at that time because on April 28, 2003,

Ms. Driskell clearly and unequivocally told Mr. Wittmann that no

change was going to be made to the noise wall.

67. Thus, on April 28, 2003, Petitioner w as on notice that

the estimated quantity for the noise wall was going to remain

1,453 m 2 , and Petitioner prepared its bid based upon that figure.

68. Petitioner did not file a specification protest within

72 hours after Ms. Driskell informed Mr. Wittmann that the

estimated quantity for the noise wall was not going to be

changed.

69. Petitioner did not pick up the package of information

which included the e - mails from Mr. Frank and Mr. Szatynski

related to the corrected noise wall quantity until May 12, 2 003,

which is nearly two weeks after it had submitted its bid. Thus,

Petitioner could not have relied on the information in those

e - mails in preparing its bid.

70. On April 30, 2003, Petitioner, Intervenor, and several

other bidders timely submitted the ir bids for the Project.

71. Neither Petitioner, nor any other prospective bidder,

filed a solicitation protest within 72 hours after the Notice

was issued.

72. Neither Petitioner, nor any other prospective bidder,

filed a solicitation protest within 72 hours after they received

the plans and specifications for the Project.

73. Neither Petitioner, nor any other prospective bidder,

filed a specification protest based upon the matters included in

(or omitted from) any of the addenda within 72 hours after th eir

issuance.

E. Department's Review of the Bids

74. The bids submitted by Petitioner and Intervenor were

both determined to be responsive.

75. Intervenor's bid of $149,898,506.15 was the lowest

bid.

76. Petitioner's bid of $149,959,420.22 was the next

lowest bid. It was approximately $61,000 (or 0.041 percent)

more than Intervenor's bid.

77. The Department has a policy -- Section 3.3 of Policy No.

600 - 010 - 001 - d (effective February 14, 2001) -- which requires that

before an award can be made based upon th e apparent low bid, the

bid must be reviewed to ensure that it is not "materially

unbalanced." FHWA policy is in accord.

78. The primary purpose of this review is to determine

whether there is a quantity error in the bid documents that the

apparent low b idder is exploiting to the State's detriment or to

the detriment of the competitive bidding process.

79. There are two types of unbalanced bids, a

mathematically unbalanced bid and a materially unbalanced bid.

As described by the FHWA policy, which is in accord with the

Department's policy and the testimony of the Department

witnesses at the hearing,

[a] mathematically unbalanced bid is

structured on the basis of a nominal price

submitted for some work and inflated prices

for other work. There is no p rohibition

against a contractor submitting a

mathematically unbalanced bid.

A material unbalanced bid, however, exists

if there is a reasonable doubt that the

award to the bidder submitting the

mathematically unbalanced bid will result in

the lowest ult imate cost to the Government

or have a detrimental effect on the

competitive bid process. A materially

unbalanced bid is unacceptable.

80. The Department's unbalanced bid review is a two - step

process. The first step is to determine whether the bid is

m athematically unbalanced. The second step is to determine

whether a mathematically unbalanced bid is materially

unbalanced.

81. The Department utilizes a computer program in the

first step of the process to determine whether a bid is

mathematically unbala nced. The computer compares the unit cost

bid for each item to a pre - determined estimated price for that

item. The computer "flags" any items for which the bid price is

materially different from the estimated price. If any items are

flagged, the bid is considered to be mathematically unbalanced.

82. Then, in the second step of the process, a Department

estimator compares the quantity for the flagged unit item(s) in

the bid documents with the "correct" quantity for the item(s)

based upon a take - off from the plans. Based upon that

comparison, the estimator determines whether the mathematical

unbalance will result in a material cost overrun, a change in

the low bidder, or otherwise be contrary to competition. If so,

the bid is deemed to be materially unb alanced; otherwise, the

bid is accepted.

83. This process is more formally described in Department

Policy No. 600 - 010 - 001 - d as follows:

3.3 Post - letting Procedures

* * *

(d) [A]s soon as the Bid verses Estimate

(SAS) Report has been generated, a list of

mathematically unbalanced bid items is sent

to the District Design Project Manager

(Central Office only). They review the

computation book and check the quantities of

items for possible overruns and/or

underruns. If the quantity is found to be

i n error, the Project Manager calculates the

correct quantity and faxes the list back to

the estimator. The estimator then

calculates the effects of the

overrun/underruns by multiplying each

contractor's unit bid by the overrun amount.

The overrun amount is added back to each

contractor's total bid. If there is an

underrun, the amount is subtracted from each

contractor's total bid. If this adjustment

causes the low bidder's total to become

larger than another contractor's total, a

switch in low bidders h ave [sic] occurred,

which is a materially unbalanced bid. The

project must not be awarded to the original

low bidder. The lowest adjusted bid will

then be considered the low bidder and award

will be made accordingly.

(e) As soon as the bids have been loaded

into the system by the Contracts

Administration Offices, the low bid verses

estimate (SAS) report can then be generated

(Central Office only). This is followed by

the Unbalanced Bid Item report. The

Unbalanced Bid Item program utilizes a bell

cur ve distribution that develops a

statistical average unit price (Average 2).

The program then establishes a range of

acceptable prices to which the contractor's

prices are compared. If this comparison is

above or below a defined window (range), it

is flag ged by the program. This flag

basically means to check the quantity on the

mathematical unbalanced bid items for

possible quantity overruns and/or underruns.

The flag could also indicate the pay item

was not needed when a contractor bids a

small unit pri ce on an item. . . .

(Emphasis in original.)

84. The computer program flagged four items which were

mathematically unbalanced in Intervenor's bid. After review,

none of those items resulted in Intervenor's bid being declared

materially unbalanced.

85. The computer program did not flag the noise wall item

as being mathematically unbalanced. That means that the $600

per m 2 bid by Intervenor for the noise wall was not materially

different from the estimated cost for that item.

86. Because the noise wall item was not flagged, the

Department was not required (or allowed) under the policy quoted

above to proceed to the next step to determine whether there was

any material unbalance on that item.

87. Had the noise wall item been flagged as being

mathematic ally unbalanced, the Department would have used the

"final quantity" from Mr. Szatynski's April 21, 2003, e - mail in

evaluating whether Intervenor's bid was materially unbalanced.

That evaluation would have resulted in Intervenor's bid no

longer being the lowest bid, and under Section 3.3(d) of

Department Policy No. 600 - 010 - 001 - d (and the FHWA policy), the

contract for the Project would not have been awarded to

Intervenor. Instead, the contract would have been awarded to

Petitioner if its bid "passed" the unbalanced review.

88. If the Department used the 3,894 m 2 estimated quantity

for the noise wall instead of the 1,453 m 2 , Petitioner's bid

amount would be $151,301,970.22 and Intervenor's bid amount

would be $151,363,106.15. 3 As a result, Petitioner woul d become

the lowest bidder by approximately $61,000.

89. Petitioner informed the Department of these figures on

May 20, 2003. Thus, at the time that the Department issued the

notice of intent to award the contract to Intervenor, it was not

only aware of the "correct" estimated quantity for the noise

wall, but it was also aware that Intervenor would not be the

lowest bidder if the "correct" quantity were used.

90. The Project has a built - in cost overrun of

approximately $1.5 million ( i.e. , the differenc e between

Intervenor's bid based upon the 1,453 m 2 estimate and its

"corrected" bid based upon the 3,894 m 2 estimate) because under

Section 2 - 3 of the Standard Specifications, payment for the

noise wall will be based upon the size of the wall that is

actua lly built and because the 3,894 m 2 more accurately reflects

the size of the wall than does the original 1,453 m 2 estimate.

F. Proposed Award to Intervenor

and Petitioner's Protest

91. On May 22, 2003, the Department posted notice of its

intent to award the contract for the Project to Intervenor.

92. Petitioner's Protest was timely filed in relation to

that notice.

CONCLUSIONS OF LAW

A. Jurisdiction

93. The Division has jurisdiction over the parties to and

subject matter of this proceeding pursuant t o Sections 120.569,

120.57(1), and 120.57(3).

B. Is This Actually a Specification Protest?

94. The Department and Intervenor argue that the Protest

must be dismissed in its entirety because it is actually an

untimely protest to the specifications in t he bid documents.

95. The statutory language relevant to this argument is in

Section 120.57(3)(b), which provides in pertinent part:

With respect to a protest of the terms,

conditions, and specifications contained in

a solicitation, including any provision s

governing the methods for ranking bids,

proposals, or replies, awarding contracts,

reserving rights of further negotiation, or

modifying or amending any contract, the

notice of protest shall be filed in writing

within 72 hours after the posting of the

so licitation. The formal written protest

shall be filed within 10 days after the date

the notice of protest is filed. Failure to

file a notice of protest or failure to file

a formal written protest shall constitute a

waiver of proceedings under this chapte r.

96. It is undisputed that neither Petitioner, nor any

other prospective bidder, filed a specification protest at any

point during the pre - bid phase. Therefore, if Petitioner's

Protest is actually a specification protest, it is untimely and

must be dis missed. See Section 120.57(3)(b); Capeletti

Brothers, Inc. v. Department of Transportation , 499 So. 2d 855,

857 (Fla. 1st DCA 1986) ("A failure to file a timely protest [of

the plans and specifications for the project] constitutes a

waiver of chapter 120 proceedings.").

97. The crux of the Department's and Intervenor's argument

on this issue is that the estimated quantity for the noise wall

of 1,453 m 2 in the bid documents never changed and, because

Petitioner did not challenge that quantity through a

spec ification protest, it is barred from doing so now. This

argument is correct as far as it goes.

98. The evidence establishes that the estimated quantity

for the noise wall in the bid documents, although clearly

incorrect, was not changed prior to the Depar tment's receipt of

bids. Moreover, the evidence establishes that Petitioner was

expressly told by the Department prior to the bid submittal

deadline that the quantity was not going to be changed. Despite

such notice, Petitioner did not file a specificati on protest.

99. Petitioner argues that it was not required to file a

specification protest because "the only purpose to be served by

a bid specification challenge, bringing a specification error to

the agency's attention and affording it an opportunity to

correct that error, was accomplished throughout the necessity of

a formal administrative challenge." Petitioner's PRO at 16.

Contrary to Petitioner's argument, the purpose of a bid

solicitation protest is not just to afford the agency an

opportunity to c orrect the error, it is to get the error

corrected. See Capeletti Brothers , 499 So. 2d at 857 ("[T]he

purpose of a bid solicitation protest provision is . . . to

correct or clarify plans and specifications prior to accepting

bids."). Petitioner was clear ly on notice after Ms. Driskell

spoke with Mr. Wittmann on April 28, 2003, that no change was

going to be made to the estimated quantity for the noise wall

despite the Department's prior acknowledgement that there was an

error. At that point (if not befor e), Petitioner could have

brought a bid solicitation protest to force the Department to

correct the error, but it failed to do so. 4

100. Petitioner's argument that the Department should

nevertheless change the noise wall quantity estimate post - bid

and awa rd the contract based upon the "correct" noise wall

quantity of 3,894 m 2 is jurisdictionally foreclosed. See

Capeletti Brothers , 499 So. 2d at 857; Vila & Son Landscaping

Corporation v. Department of Transportation , Case

No. 93 - 4556BID, 1993 WL 94 4007, at *5 (DOAH October 22, 1993);

State Paving Corporation v. Department of Transportation , Case

No. 87 - 3848, 1987 WL 488156, at *4 (DOAH October 1, 1987).

101. This determination does not warrant dismissal of the

Protest in its entirety because the Pr otest alternatively argues

that the proposed contract award to Intervenor is contrary to

the Department's governing statutes, policies, and the proposal

specifications. Even though those arguments also implicate the

erroneous noise wall quantity estimate, those arguments are not

jurisdictionally foreclosed and are addressed below.

C. Does Petitioner's Protest to the

Department's Proposed Award Have Merit?

102. The nature and scope of a protest to the proposed

contract award is prescribed by Section 12 0.57(3)(f), which

provides in pertinent part:

In a competitive - procurement protest, other

than a rejection of all bids, the

administrative law judge shall conduct a de

novo proceeding to determine whether the

agency's proposed action is contrary to the

age ncy's governing statutes, the agency's

rules or policies, or the bid or proposal

specifications. The standard of proof for

such proceedings shall be whether the

proposed agency action was clearly

erroneous, contrary to competition,

arbitrary, or capriciou s.

103. This statutory language was parsed and critically

analyzed by Administrative Law Judge John G. Van Laningham in

his Recommended Order in Syslogic Technology Services,

Inc. v. South Florida Water Management District , Case

No. 01 - 4385BID, 2002 WL 76312 (DOAH January 18, 2002). The

pertinent portions of that analysis, with which the undersigned

agrees, provide:

45. As the statute says, the ultimate

issue is "whether the agency's proposed

action is contrary to the agency's governing

statutes, the agency's rules or policies, or

the bid or proposal specifications." This

could be construed as a standard of review,

which might be distilled into: whether the

agency erred in applying a governing

principle. Such a review would be akin to

an appella te court's evaluation of a lower

tribunal's legal conclusions. Ordinarily,

of course, legal conclusions are decided

independently (or de novo) by the reviewing

court, with little deference paid to the

trial judge. [citations omitted]

46. The next sen tence, however, which

describes the "standard of proof," renders

the foregoing interpretation untenable, for

reasons that will become clear. But first:

it is an impediment to applying the statute

that of the several standards ushered in by

words "standar d of proof," none is a known

"standard of proof."

47. As commonly used in legal discourse,

the term "standard of proof" signifies the

nature, quality, and quantity of evidence

with which the proponent of an allegation

(or the one who bears the burden o f proof)

must come forward in order to establish that

allegation. The widely - recognized standards

of proof are: preponderance (or greater

weight) of the evidence, clear and

convincing evidence, and proof beyond a

reasonable doubt. [citations omitted]. It

is highly unlikely that the legislature

intended to change the standard of proof in

bid protests, from "preponderance of the

evidence," see Section 120.57(1)(j), Florida

Statutes, to a new and unfamiliar standard.

48. Instead, a reasonable interpret ation

of "standard of proof" as used in Section

120.57(3)(f) is that the term means standard

of review . This is because, while the

"standard of proof" sentence fails to

mention a single common standard of proof,

it does articulate two accepted standards o f

review: the "clearly erroneous" and abuse

of discretion (= "arbitrary, or capricious")

standards. (The "contrary to competition"

standard —— whether it be a standard of proof

or standard of review —— is unique to bid

protests.) Construing "standard of pro of"

to mean "standard of review" makes the

sentence make sense. 8

[Endnote 8. The legislature's use

of the term "standard of review"

in the very next sentence of the

statute, which deals with protests

contesting a rejection of bids,

has not been overlooke d. While

ordinarily it would be presumed

that the legislature, having

chosen to use different terms in

the same statute, must have

intended that each separate term

convey a distinct meaning, the

ordinary presumption simply does

not work here. The legisla ture

could not reasonably have intended

that a protester establish its

case by "clearly erroneous"

evidence, or by proof that is

"contrary to competition."]

49. It also sheds light on the "de novo

proceeding" sentence. If the "standard of

proof" sente nce describes the standard of

review (as reasonably it must), then

logically the "de novo proceeding" sentence

must not prescribe the standard of review,

because the legislature presumably would not

have done so twice, differently. Moreover,

the "standard of proof" sentence plainly

manifests an intent that the agency's

proposed action be accorded a measure of

deference that is inconsistent with a de

novo review for error, which would seem to

be the standard of review if the "de novo

proceeding" sentence we re construed to

articulate one. By framing the ultimate

issue as being "whether the agency's

proposed action is contrary to the agency's

governing statutes, the agency's rules or

policies, or the bid or proposal

specifications," it is probable that the

le gislature, rather than describing a

standard of review, intended to establish a

standard of conduct for the agency. The

standard is: In soliciting and accepting

bids or proposals, the agency must obey its

governing statutes, rules, and the project

specif ications. If the agency breaches this

standard of conduct, its proposed action is

subject to (recommended) reversal by the

administrative law judge in a protest

proceeding.

50. Applying the above interpretations,

it is concluded that the party protest ing

the intended award must identify and prove,

by the greater weight of evidence, a

specific instance or instances where the

agency's conduct in taking its proposed

action was either:

(a) contrary to the agency's governing

statutes;

(b) contrary to the agency's rules or

policies; or

(c) contrary to the bid or proposal

specifications.

It is not sufficient, however, for the

protester to prove merely that the agency

violated the general standard of conduct.

By virtue of the applicable standard s of

review, the protester must in addition

establish that the agency's misstep was:

(a) clearly erroneous;

(b) contrary to competition; or

(c) an abuse of discretion.

Id. , 2002 WL 76312 at **8 - 10 (Emphasis in original). See also

State Contract ing & Engineering Corporation v. Department of

Transportation , 709 So. 2d 607, 609 (Fla. 1st DCA 1998) (noting

that the object of a bid protest proceeding is to " evaluate the

action taken by the agency" in accordance with the standards set

forth in Secti on 120.57(3)(f)) .

104. Petitioner first argues that the Department's

proposed award of the contract to Intervenor is contrary to

Section 337.11(2). That statute requires the Department to

"ensure that all project descriptions, including design plans,

ar e complete, accurate, and up to date prior to the

advertisement for bids on such projects." (Emphasis supplied.)

105. Although Section 337.11(2) might have provided a

basis for a solicitation protest directed at the erroneous

estimated quantity for the noise wall once it became apparent

that the Department did not intend to correct that error through

an addendum, the statute does not impose a continuing obligation

on the Department to unilaterally correct errors in the bid

documents after the Project ha s been advertised. Accordingly,

Section 337.11(2) does not provide a basis upon which to

challenge the Department's intended award of a contract made

pursuant to the bid documents, even if an item in those

documents is shown to be inaccurate, as it was he re.

106. This construction of Section 337.11(2) is consistent

with Capeletti Brothers and its progeny which hold that

challenges to the specifications must be timely raised during

the pre - bid phase or they are waived. This construction of the

statute a lso preserves the integrity of the competitive bidding

process by prohibiting after - the - fact challenges to the

specifications in the bid documents.

107. Petitioner next argues that the Department's proposed

award of the contract to Intervenor is contrary to the

Department's policy of rejecting materially unbalanced bids.

Petitioner failed to meet its burden of proof on this issue

because the evidence establishes that the Department followed

its policy governing the review of bids for unbalancing in this

case. 5 In this regard, because Intervenor's bid was not

determined to be mathematically unbalanced with respect to the

noise wall item, the policy did not require (or even allow) the

Department to determine whether Intervenor's bid was materially

unbalanc ed on that item. Cf. Vila & Son , supra (discussing the

Department's unbalanced bid review process and post - bid changes

made in circumstance involving mathematically unbalanced bid

items). Indeed, had the Department deviated from the procedures

set forth in the unbalanced bid policy and declared Intervenor's

bid materially unbalanced by using the "correct" quantity for

the noise wall item, even though that item was not "flagged" by

the computer, its action would have been subject to challenge by

Intervenor as being contrary to the Department's written policy.

108. Finally, Petitioner argues that the Department's

intended award of the contract to Intervenor is contrary to the

bid specifications. Petitioner failed to meet its burden of

proof on this issue. The evidence establishes that the

estimated quantity for the noise wall was never changed from

1,453 m 2 and that, consistent with Sections 2 - 3 and 3 - 1 of the

Standard Specifications, the Department's proposed award to

Intervenor was based upon that figur e. The evidence further

establishes that Petitioner's representative was expressly told

prior to the bid submittal deadline that the noise wall quantity

estimate was not going to be changed and Petitioner subsequently

submitted its bid based upon the nois e wall quantity estimate of

1,453 m 2 . And cf. Capeletti Brothers v. Department of General

Services , 432 So. 2d 1359 (Fla. 1st DCA 1983)(affirming contract

award to lowest bidder even though bid specifications contained

a known and acknowledged error regar ding the ownership of the

access road to the construction site).

109. Because Petitioner failed to prove that the

Department's intended award of the contract to Intervenor is

contrary to statute, Department policy, or the bid

specifications, it is unnece ssary to determine whether any such

"misstep" was clearly erroneous, contrary to competition, or an

abuse of discretion. See Syslogic Technology Services , 2002 WL

76312 at *10 (second paragraph in Paragraph 50).

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 denies the formal written protest filed by

Petitioner and awards the contract for the Project to

Intervenor.

DONE AND ENTERED this 25 th day of August, 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 - 306 0

(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 25th day of August, 2003.

ENDNOTES

1/ Unless the context indicates otherwise, all references in

this Recommended Order to "bid documents" includes the Notice,

the plans and specifications for the Project, the proposal

form/bid blank, and the five addenda issued by the Department.

2/ Section 1 - 3 of the Standard Specifications defines "major

item of work" as an item of work whose value is more than five

percent of the contract price. Here, the five percent threshold

is approximately $7.5 million.

3/ These amounts are computed as follows:

Petitioner Intervenor

Original Bid $149,959,420.22 $1 49,898,506.15

Less: Noise Wall

@ 1,453 m 2 ( 799,150.00) ( 871,800.00)

Plus: Noise Wall

@ 3,894 m 2 2,141,700.00 2,336,400.00

"Corrected" Bid $151,301,970.22 $151,363,106.15

For Petitioner, the noise wall figures were computed by

mu ltiplying 1,453 m 2 and 3,894 m 2 by the $550 per m 2 bid by

Petitioner, and for Intervenor, the noise wall figures were

computed by multiplying 1,453 m 2 and 3,894 m 2 by the $600 per m 2

bid by Intervenor.

4/ The undersigned is mindful that Section 120.57(3) (b)

requires a solicitation protest to be filed within 72 hours

after "posting of the solicitation" which, in this case,

occurred on February 28, 2003, when the Notice was issued.

However, under the circumstances of this case, the 72 - hour

period to file a specification protest (or at least a protest

directed to the error in the noise wall quantity) could not have

commenced on that date because the bidders did not yet have the

plans for the Project which provided the graphical information

from which the err or could be determined through a take - off

calculation. Moreover, under the circumstances of this case,

the Department would have been hard - pressed not to consider a

specification protest had one been filed by Petitioner within

72 hours after Ms. Driskell finally informed Mr. Wittmann on

April 28, 2003, that despite their earlier conversations, the

Department did not intend to change the estimated quantity for

the noise wall. Ultimately, however, this is simply an academic

exercise since Petitioner did not file a specification protest

at any point in the process.

5/ There is some merit to Petitioner's argument that the

Department's policy makes no sense under the circumstances of

this case since the primary purpose of an unbalanced bid review

is to determ ine whether there is a quantity error in the bid

documents that the bidder is exploiting to the State's detriment

or to the detriment of the competitive bidding process. Here,

the Department was aware at the time the bids were received of

the error in the estimated quantity for the noise wall, as well

as the cost overrun that the error would cause, and it was

informed prior to noticing its proposed award of the contract to

Intervenor that use of the "correct" estimated quantity would

result in a change in low bidders. Nevertheless, the scope of

review in this proceeding is limited to determining whether the

Department followed its policy, as written , in awarding the

contract, which it did.

COPIES FURNISHED :

Robert C. Downie, II, Esquire

Department of Tr ansportation

Haydon Burns Building, Mail Station 58

605 Suwannee Street

Tallahassee, Florida 32399 - 0458

Christopher T. McRae, Esquire

McRae & Metcalf, P.A.

1677 Mahan Center Boulevard

Tallahassee, Florida 32312

William E. Williams, Esquire

J. Andrew Be rtron, Jr., Esquire

Huey, Guilday, Tucker, Schwartz

and Williams, P.A.

1983 Centre Point Boulevard, Suite 200

Post Office 12500

Tallahassee, Florida 32317 - 2500

James C. Myers, Clerk of Agency Proceedings

Department of Transportation

Haydon Burns Buildi ng, Mail Station 58

605 Suwannee Street

Tallahassee, 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 SUBM IT 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.