07-000630BID First Communications, Inc. vs. Department Of Corrections Status: Closed Recommended Order on Thursday, April 5, 2007.

Summary: Petitioner failed to prove that the proposed contract award was contrary to the Invitation to Bid or contrary to competition. Deviations in the low bidder`s bid were not material and could be waived. Recommend that the protest be dismissed.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

FIRST COMMUNICATIONS, INC., )

)

Petitioner, )

)

vs. ) Case No. 07 - 0630BID

)

DEPARTMENT OF CORRECTIONS, )

)

Respondent. )

)

RECOMMENDED ORDER

A duly - noticed final hearing was held in this case by

Administrative Law Judge T. Kent Wetherell, II, on February 22,

2007, in Tallahassee , Florida.

APPEARANCES

For Petitioner: J. Marshall Conrad, Esquire

Ausley & McMullen

Post Office Box 391

Tallahassee , Florida 32302

For Respondent: Anthony B. Miller, Esquire

Susan P. Stephens, Esquire

Department of Corrections

2601 Blair Stone Road

Tallahassee, Florida 32399 - 2500

STATEMENT OF THE ISSUE

The issue is whether the proposed award of Invitati on to

Bid No. 06 - DC - 7727 to Communications Engineering Service Company

is contrary to the Department of Correction ’s governing

statutes, rules, policies, or the specifications in the

Invitation to Bid for the reasons alleged by Petitioner.

PRELIMINARY STAT EMENT

On January 4, 2007, the Department of Corrections

(Department) posted notice of its intent to award Invitation to

Bid (ITB) No. 06 - DC - 7727 to Communications Engineering Service

Company (CES). Petitioner , First Communications, Inc. (First

Communicati ons), timely fi led a notice of protest and, then, a

formal written protest challenging the proposed award to CES.

On February 6, 2007, the Department referred the protest to the

Division of Administrative Hearings (D OAH) for a hearing.

At the hearing, Fir st Communications presented the

testimony of Christina Espinosa , and the Department presented

the testimony of Gail Hillhouse. First Communications’ Exhibits

(Pet. Ex.) A through I were received into evidence , as were the

Department’s Exhibits 1 and 2 .

Th e Transcript of the hearing was filed on March 6 , 2007 .

The parties were given 10 da ys from that date to file proposed

recommended orders (PROs) , but the deadline was subsequently

extended to March 23, 2007, upon the Department’s unopposed

motion . The PR Os were timely filed and have been given due

consideration.

FINDINGS OF FACT

1. T he Department issued ITB No. 06 - DC - 7727 on October 27,

2006. The purpose of the ITB was to solicit bids for

maintenance and repair of radio eq uipment owned by the

Departmen t in each of its four regions.

2. The original deadline for submitting bids in response

to the ITB was November 30, 2006 , but the deadline was extended

to December 15, 2006, through an addendum to the ITB.

3. First Communications, CES, and Motorola, In c.,

submitted bids for Region I . Another company, Econo

Communications, Inc. d/b/a Mobile Communications , also responded

to the ITB, but it did not bid on Region I.

4. It was stipulated that First Communications’ bid was

responsive to the ITB.

5. The De partment determined that the bid submitted by

Motorola was not responsive to the ITB . That determination was

not challenged.

6. The Department determined that the bid submitted by CES

was res ponsive, despite the issues discussed below .

7. CES was determ ined by the Department to be the lowest

responsible bidder. The bid submitted by CES was $2, 571 per

month. 1

8. First Communications was the next lowest bidder. Its

bid was $3,408.85 per month, 2 which is 32.6 percent higher than

CES’s bid.

9. Section 4.3.1 of the ITB states that “it is essential

that bidders follow the format and instructions contained in the

Bid Submission Requirements (Section 5 with particular emphasis

on the Mandatory Responsiveness Requirements).”

10. Section 5.1 of the ITB lis ts the “mandatory

responsiveness requirements” for bids, and states that:

The following terms, conditions or

requirements must be met by the bidder to be

considered responsive to the ITB. These

responsiveness requirements are mandatory .

Failure to meet t hese responsiveness

requirements will cause rejection of a bid .

Any bid rejected for failure to meet

responsiveness requirements will not be

further reviewed. (Emphasis in original).

11. Nearly identical language is contained in Sections 1.7

and 4.3.6. 1 of the ITB , and in the ITB Review Manual used by

Department staff in reviewing the bids submitted in response to

the ITB. Indeed, the ITB Review Manual refers to the mandatory

responsiveness requirements as “fatal criteria.”

12. T he mandatory responsiv eness requirement in the ITB

that is most pertinent to this case is in Section 5.1.2, 3 which

states :

It is mandatory that the bidder supply one

(1) original signed Bid and three (3) copies

of the signed bid. . . . . (Emphasis in

original).

13. The bid package submitted by CES did not include the

original signed bid . I t only included the three copies of the

signed bid.

14. This omission was noted by Christina Espinosa, the

procurement manager for the ITB who opened the bids on the

afternoon of December 15, 2006. However, a fter Ms. Espinosa

consulted with her supervisor and the Department’s leg al staff,

it was determined that the omission was not material and that

CES should be given an opportunity to “cure” its failure to

submit the original signed bid . As a result, M s. Espinosa

contacted CES and gave it 24 business hours to “cure” the

deficiency .

15. CES delivered the original signed bid to the

Depar tment on the morning of December 18, 2006, which is three

days after the bid submittal deadline in the ITB, but within the

24 - business hour deadline given by Ms. Espinosa. 4

16. CES did not have a representative at the bid opening,

and there is no evidence that CE S knew it was the lowest bidder,

either when Ms. Espinosa gave CES an opportunity to “cure” it s

failure to submit an original bid on December 15, 2006, or when

it submitted the original bid on December 18, 2006.

17. It is undisputed that the original signed bid

submitted by CES on December 18, 2006, is identical in all

respects to the three copie s of the bid that were timely

submitted by CES on December 15, 2006.

18. Ms. Espinosa reviewed the bid submitted by CES despite

its failure to inc lude the original signed bid. According to

ITB provisions referenced above , that omission should have

resul ted in the bid being rejected and not further reviewed.

19. The CES bid included at least o ne other deviation from

the specifications in the ITB . The bid stated in the “service

delivery synopsis” that the turnaround time for the repair of

fixed equipmen t would be 15 working days. A 15 - day time period

was referenced in the original ITB, but it was changed to eight

days in an addendum.

20. Ms. Espinosa contacted CES about this discrepancy, and

on January 3, 2007, CES advised Ms. Espinosa by e - mail that it

“acknowledges the change in repair times from 15 days to 8

days.”

21. CES was not the only bidder that Ms. Espinosa

contacted after the bids were opened to obtain clarification or

information omitted from the bid. For example, she contacted

First Comm unications to obtain copies of its articles of

incorporation and business licenses that were not included in

its bid ; to get clarification regarding First Communications’

use of subcontractors ; and to confirm that First Communications

acknowledged the eigh t - day turnaround time for repair of fixed

equipment since its bid did not contain a service delivery

synopsis.

22. Section 4.3.1 of the ITB authorizes the Department to

“seek clarifications or request any information deemed necessary

for proper review of submissions from any bidder deemed eligible

for Contract award.” However, Section 4.3.1 also states that

“no modifications by the bidder of submitted bids will be

allowed.”

23. The ITB authorize s the Department to waive minor

irregularities and non - mater ial deviations in bids, a nd on this

issue, the ITB states :

4.3.6 Rejection of Bids

The Department shall reject any and all bids

not meeting mandatory responsiveness

requirements. In addition, the Department

shall also reject any or all bids containing

m aterial deviations. The following

definitions are to be utilized in making

these determinations.

4.3.6.1 Mandatory Responsiveness

Requirements: Terms, conditions or

requirements that must be met by the bidder

to be responsive to this solicitation.

T hese responsiveness requirements are

mandatory . Failure to meet these

responsiveness requirements will cause

rejection of a bid. Any bid rejected for

failure to meet mandatory responsiveness

requirements will not be further reviewed.

4.3.6.2 Material Deviations: The

Department has established certain

requirements with respect to bids to be

submitted by the bidder. The use of shall,

must or will (except to indicate simple

futurity) in this ITB indicates a

requirement or condition which may not be

wai ved by the Department except where any

deviation there from is not material. A

deviation is material if, in the

Department’s sole discretion, the deficient

response is not in substantial accord with

this ITB’s requirements, provides an

advantage to one bi dder over other bidders,

or has a potentially significant effect on

the quantity or quality of terms or services

bid, or the prices submitted to the

Department. Material deviations cannot be

waived and shall be the basis for rejection

of a bid .

4.3.6.3 Minor Irregularities: A

variation from the solicitation terms and

conditions which does not affect the price

proposed or give the bidder an advantage or

benefit not enjoyed by the other bidders or

does not adversely impact the interests of

the Departmen t. A minor irregularity will

not result in a rejection of a bid. (All

emphasis in original).

24. The Department relies on these sect ions of the ITB as

its authority to waive minor irregularities and non - material

deviations in bids with respect to any provision of the ITB,

including t he mandat ory responsive ness requirements.

25. On January 4, 2007, the Department posted notice of

its intent to award the contract for Region I to CES.

26. In the same posting, the Department rejected all bids

for the other three regions. The rejection of all bids for the

other regions is not at issue in this case.

27. First Communications timely filed a notice of protest

and , then, a formal written protest challenging the intended

award of the contract to CES.

28. The Department provided notice of this proceeding to

CES , as required by the Order of Pre - hearing Instructions.

29. CES did not file a petition to intervene or otherwise

seek to participate in this proceeding.

CONCLUSIONS OF LAW

30. DOAH has jurisdic tion over the parties to and subject

matter of this proceeding pursuant to Section 120.57(3) , Florida

Statutes (200 6 ). 5

31. First Communications has standing to contest the

proposed award of the contract to CES. See Preston Carroll Co.

v. Florida Keys Aq ueduct Authority , 400 So. 2d 524, 525 (Fla. 3d

DCA 1981) (second lowest bidder has standing to challenge the

proposed award of a contract) .

32. First Communications has the burden of proof in this

proceeding. See § 120.57(3)(f), Fla. Stat.

33. The sco pe of th is proceeding and the nature of First

Communications ’ burden of proof are as follows:

In a competitive - procurement protest, other

than a rejection of all bids . . . , the

administrative law judge shall conduct a de

novo proceeding to determine wheth er the

agency's proposed action is contrary to the

agency's governing statutes, the agency's

rules or policies, or the solicitation

specifications. The standard of proof for

such proceedings shall be whether the

proposed agency action was clearly

erroneou s, contrary to competition,

arbitrary, or capricious.

§ 120.57(3)(f), Fla. Stat. See also State Contracting &

Engineering Corp. v. Dept. of Transportatio n , 709 So. 2d 607,

609 (Fla. 1st DCA 1998) (purpose of a bid protest proceeding is

to “evaluate the a ction taken by the agency" in relation to the

standards in Section 120.57(3)(f), Florida Statutes).

34. It is not enough under Section 120.57(3)(f), Florida

Statutes, for the protestor to show that the proposed award of

the contract is contrary to the IT B ; the protestor must also

show that the proposed award is clearly erroneous, contrary to

competition, or an abuse of discretion. See , e.g. , Syslogic

Technology Services , Inc. v. South Fl orida Water Ma nagement

Dist . , 2002 Fla. Div. Adm. Hear. LEXIS 235 (D OAH Jan. 18, 2002)

(critically analyzing the standards in Section 120.57(3) (f) ,

Florida Statutes).

35. Competitive bidding allows governmental entities to

acquire necessary goods and services at the lowest possible

cost , and it also protects against coll usion, favoritism, and

fraud in the award of public contracts . See generally Wester v.

Belote , 138 So. 721 (Fla. 1931); § 287.001, Fla. Stat.

36. As a general rule, bids must strictly adhere to the

requirements of the ITB. However, it is well - establishe d that

agencies have broad discretion to waive minor, non - material

irregularities in bids if doing so w ill save the public money.

See , e.g. , Liberty County v. Baxter’s Asphalt and Concrete,

Inc. , 421 So. 2d 505 (Fla. 1982); Robinson Electrical Co. v.

Dade County , 417 So. 2d 1032, 1034 (Fla. 3d DCA 1982) ("[T]he

purpose of competitive bidding is to secure the lowest

responsible offer and . . . the County may waive minor

irregularities in effectuating that purpose.").

37. There is “a strong public policy i n favor of awarding

contracts to the low bidder, and an equally strong public policy

against disqualifying the low bidder for technical deficiencies

which do not confer an economic advantage on one bidder over

another.” Intercontinental Properties, Inc. v . Department of

Health and Rehabilitative Services , 606 So. 2d 380, 38 7 (Fla. 3d

DCA 1992).

38. The determination as to whether an irregularity in a

bid is material or not turns on “whether the variation affects

the amount of the bid by giving the bidder an advantage or

benefit not enjoyed by the other bidders.” Harry Pepper &

Associates, Inc. v. City of Cape Coral , 352 So. 2d 1190, 1193

(Fla. 2d DCA 197 7 ). See also Tropabest Foods, Inc. v. Dept. of

General Services , 493 So. 2d 50, 52 (Fla. 1st DCA 1986 )

( "[A]lthough a bid containing a material variance is

unacceptable, not every deviation from the invitation to bid is

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

substantial advantage over the other bidders and thereby

restricts or stifles com petition.").

39. The ITB expr essly incorporates these standard s in

Sections 4.3.6 .2 and 4.3.6.3. And cf. § 287.012(25), Fla. Stat.

(defining “responsive bid” as a bid that conforms “in all

material respects to the solicitation” (emphasis supplied)) .

4 0. First Communications argues that the Department’s

decision to award the contract to CES is contrary to the

specif ications in Sections 4.6.3.1 and 5.1 of the ITB , which

require the Department to reject and not further review bids

that fail to meet the m andatory responsiveness requirements in

the ITB. However, t he Department’s duty to reject and not

further review bids that fail to meet the mandatory

responsiveness requirements must be read in pari materia with

the Department’s authority in the ITB (and well - established case

law) t o waive minor irregularities in bids that do not give one

bidder an economic advantage over other bidders.

41. The deficiencies in the bid submitted by CES -- e.g ,

the failure to include the original bid with the thre e copies

submitted on February 15, 2006, and the reference to a 15 - day

turnaround time rather than the eight - day turnaround time -- did

not confer an economic advantage on CES , and were not shown to

be material deviations from the requirements of the ITB . T h us,

t he Department was authorized by the ITB and well - established

case law to waive those deficiencies.

42. It is a closer question whether the Department

exceeded its authority under the ITB by allowing bidders to

“cure” omissions in the bids by submitting a dditional

information after the bids had been opened . See § 120.57(3)(f),

Fla. Stat. (“no submissions made after the bid . . . opening

amending or supplementing the bid . . . shall be considered” ).

On balance, however, it is concluded that Department’s a ction in

that regard w as not clearly erroneous or an abuse of discretion

in light of Section 4.3.1 of the ITB, which allows the

Department to obtain clarification and additional information

from the bidder when necessary for proper review of a bid; nor

was the Department’s action in that regard contrary to

competition because all of the bidders were treated equally.

Notably, as was the case with CES, First Communications was

given an opportunity to provide documents and information to the

Department that w ere requested in the ITB but that were omitted

from its bid.

43. In sum, the evidence fails to establish that t he

Department’s proposed award of the contract to CES i s contrary

to the specifications in the ITB viewed as a whole and, even if

it is, the evi dence fails to establish that the award is clearly

erroneous, contrary to competition, or an abuse of discretion .

Therefore, First Communications failed to meet its burden of

proof under Section 120.57(3)(f), Florida Statutes.

RECOMMENDATION

Based upon t he foregoing findings of fact and conclusions

of law, it is

RECOMMENDED that the Department issue a final order

dismissing First Communications ’ protest.

DON E AND ENTERED this 5th day of April , 200 7 , 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 with the Clerk of the

Division of Administrative Hearings

this 5th day of April, 2007.

ENDNOTES

1 / Motorola’s bid of $ 2,513.82 per month was approximately $70

lower than CES’s bid, but the Department found M otorola’s bid to

be non - responsive.

2 / First Communications’ bid included the itemized costs used to

calculate the “grand total,” but the bid did not include an

amount on the “grand total” line. During the bid review

process, the Department staff used t he itemized costs to verify

the “grand totals” presented by each of the bidders. As a

result, the omission of a “grand total” in First Communications’

bid was not material. Accord Systea Scientific, LLC v. Dept. of

Health , 2005 Fla. Div. Adm. Hear. LEXIS 1094 (DOAH June 29,

2005).

3 / One of the forms completed during the Department staff’s

review of the bids indicated that the CES bid did not meet the

mandatory responsiveness requirements in Sections 5.1.1 and

5.1.2; another form indicated that the CES bid did not meet the

mandatory responsiveness requirement in Sections 5.1.2 and

5.1.3 . Compare Pet. Ex. E with Pet. Ex. G. S ection 5.1.1

required the bid package to be received by the deadline

established in the ITB; Section 5.1.3 required the bid to

inc lude the original ITB Acknowledgement form or a copy of the

form with an original signature. The inconsistency in the forms

was not adequately explained at the hearing. However, it is

clear from the totality of the evidence that the Department

staff’s de termination that the bid failed to meet Section 5.1.1

and/or Section 5.1.3 was based solely upon the fact that the

original bid was not included with the three copies submitted by

CES on December 15, 2006, as required by Section 5.1.2.

4 / December 15 , 20 06, was a Friday. December 18, 2006, was the

following Monday.

5 / All statutory references in this Recommended Order to the

2006 version of the Florida Statutes.

COPIES FURNISHED :

James R. McDonough, Secretary

Department of Corrections

2601 Blair Ston e Road

Tallahassee, Florida 32399 - 2500

Kathleen Von Hoene, General Counsel

Department of Corrections

2601 Blair Stone Road

Tallahassee, Florida 32399 - 6563

J. Marshall Conrad, Esquire

Ausley & McMullen

Post Office Box 391

Tallahassee, Florida 32302

An thony B. Miller, Esquire

Department of Corrections

2601 Blair Stone Road, Room B452

Tallahassee, Florida 32399

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

1 0 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.