09-001567BID Core Construction Company vs. University Of North Florida Status: Closed Recommended Order on Thursday, April 30, 2009.

Summary: Petitioner did not demonstrate that it had successfully completed three projects over $1 million as required by the ITB.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CORE CONSTRUCTION COMPANY, )

)

Petitioner, )

)

vs. ) Case No. 09-1567BID

)

UNIVERSITY OF NORTH FLORIDA, )

)

Respondent. )

)

RECOMMENDED ORDER

On April 20, 2009, a duly-noticed hearing was held by means

of video-teleconferencing in Tallahassee and Jacksonville,

Florida, before Administrative Law Judge Lisa Shearer Nelson, of

the Division of Administrative Hearings.

APPEARANCES

For Petitioner: Paul Christopher Wrenn, Esquire

University of North Florida

J.J. Daniel Hall, Suite 2100

1 University of North Florida Drive

Jacksonville, Florida 32224-7699

For Respondent: Jay Chung, President

Core Construction Company

4940 Emerson Street, Suite 205

Jacksonville, Florida 32207

STATEMENT OF THE ISSUE

The issue to be determined is whether Respondent's proposed award for ITB 09-22 for Building 14B renovation is contrary to

law, against the University's governing statutes, rules or

policies or the specifications of the invitation to bid.

PRELIMINARY STATEMENT

On February 27, 2009, the University of North Florida (UNF

or the University) received a formal protest from Core

Construction Company challenging the University's award of ITB-

09-22 (GC's for Building 14B Renovation). On March 25, 2009, the

protest was referred to the Division of Administrative Hearings

pursuant to the University's contract with the Division with a

request that an administrative law judge be assigned. The case

was assigned to the undersigned and, after a telephone conference

with the parties held March 30, 2009, it was agreed that the

hearing would be held by means of video-conferencing on April 20,

2009, and the hearing proceeded as scheduled.

The hearing was conducted pursuant to the authority granted

in Florida Board of Governors Rule 18.002, and the procedures

outlined in University of North Florida Regulation 13.0020R.

Consistent with that regulation, the parties exchanged exhibits

in advance of the hearing, and submitted a prehearing statement

including admitted facts which have been incorporated into the

findings of fact below. Neither party objected to the

documentary evidence submitted by the other. At hearing,

Petitioner presented the testimony of Jay Chung, Dirk Harrison,

and Gary Arcuri, and Petitioner's Exhibits 1-13 were admitted

into evidence. Respondent submitted the testimony of Dianna

White and Kathryn Ritter, and Respondent's Exhibits 1-12 were

admitted.

The parties both expressed the desire for the proceedings to

be expedited as much as possible. To that end, it was agreed

that proposed recommended orders would be submitted no later than

April 27, 2009. Both parties timely submitted their proposed

orders, which have been carefully considered in the preparation

of this Recommended Order.

FINDINGS OF FACT

1. The University of North Florida published its Notice of

Bid/Request for Proposal in reference to ITB #09-22 entitled

"GC's for Building 14B Renovation" on December 19, 2008, with a

submission deadline of January 27, 2009. The opening date was

eventually extended to January 30, 2009.

2. There were four addendums to the ITB #09-22 Project.

3. The Notice of Bid/Request for Proposal document

contained the following provisions:

This project consists of the following scope

of work: The work includes all labor,

supervision, equipment, and materials

required to execute the Contract Documents in

two phases for the tenant build-out of the

existing UNF Building 14-B (approximate

square footage 9742). The work includes, but

is not limited to, demolition of all interior

walls, finishes, mechanical, electrical,

plumbing and communication components as well

as a new exterior curtain wall system.

Exterior construction will include new

glazing in aluminum curtain wall. Interior

construction will include new gypsum

wallboard partitions with metal stud walls,

millwork, suspended acoustical and gypsum

wallboard ceilings, wood and metal doors in

hollow metal frames, coiling overhead

grilles, toilet partitions and vanities.

Interior finishes include carpeting,

resilient tile, ceramic tile, painting, and

window treatments. Mechanical work includes

installation of new Owner provided HVAC units

with ductwork and all necessary connections

to the UNF Central Plant chilled water

system. Plumbing includes new piping and

fixtures for the tenant build-out and

renovation of the group male and female

restrooms. Electrical work includes new

wiring, devices and lighting for the new

tenant build-out.

Successful bidders must have demonstrable

previous experience with the described

systems and technical requirements. All

bidders must be qualified at the time of the

bid opening in accordance with the Bidders

Qualification within the ITB 09-22 Bid

documents. . .

4. Article I, Section 2 includes a heading in bold stating

"Qualification Criteria." This section states:

Participants must qualify to bid on this

project. UNF will utilize the following

criteria to qualify the general contractors

within this ITB. The information must be

completed on the UNF Qualifications Form

provided (page 10-11):

Bonding: Demonstrates a bonding capacity of

at least $2 million dollars and has an A.M.

Best Rating of "A-V" or better.

Licenses: Company is licensed to do business

in the state of Florida and approved by the

US Department of Treasury listing as an

acceptable surety.

Project references: Company has successfully

completed at least 3 commercial construction

projects of more than $1 million dollars each

in the past three (3) years. List 3 such

projects to include project name, client

name, completion date, location, project

value, role in project. Reference: Project

name, owner, owner's representative

name/phone number, completion date and

construction cost.

Years of experience: Company has a minimum

five (5) years of GC experience under the

current company name.

5. The directions for the General Contractor's

Qualification Summary, under Related Experience, reiterated that

the bidder was to list "No more than 4 projects of comparable

type, size and complexity. (1) Project must be for a

college/university)."

6. Addendum I for the Project, issued January 9, 2009,

clarified that the requirement for having completed successfully

a project of similar size and scope at a Florida University in

the last three years is a qualification factor for this project.

7. Addendum II, issued January 12, 2009, removed the

requirement for bidders to have completed one project for a

college or university. The other two addenda did not address

contractor qualifications.

8. Petitioner, Core Construction Company (Core Construction

or Petitioner) bid in response to the ITB. Approximately 19

other bidders also responded. Core Construction was the apparent

low bidder on the project, with a bid of $1,073,000. There was

some concern expressed by the architect reviewing the bids

because the bids were all within ten percent of each other for

the top bidders, with the bidders 2-10 being within six percent

of each other. In an e-mail to Dianna White, the Senior Buyer

for UNF purchasing, Mr. Norman stated:

Overall there was a 20% range in bid prices

which I attribute to a significant difference

in the size, quality and abilities of the

contractors that bid this project. The

apparently low bidder was $60,516 below the

second low bidder and $83,000 below the third

low bidder. This is a significant concern

since there is only $46,484 between the

second and fifth low bidders. I suggest the

apparent low bidder be contacted and asked if

they feel comfortable with their bid, because

it appears to me they are missing something

significant in their pricing. Purchasing

should also carefully review their current

financials and current bonding capacity if

this is allowed.

9. Project reference checks, price verification against the

architect's construction estimate and bonding checks were

performed with respect to the four lowest bidding companies:

Core Construction, Pooley Contracting, Rivers & Rivers and Warden

Construction.

10. Pooley Contracting, the second-lowest bidder, was

disqualified as non-responsive because its bid package did not

include a bonding letter.

11. Core provided the names of three completed projects

that were valued at over one million dollars. Dianna White

called each of the references provided, not only for Core but for

three of the four lowest bidders. The same questions were asked

of each reference for each company: 1) Was the project on time

and within budget; 2) Did the project run smoothly; 3) Were

project issues handled; and 4) Would you use the contractor

again.

12. Calls related to Pooley Contracting were not completed

because it was disqualified as non-responsive. While the

references for Rivers & Rivers and Warden were consistently good,

two of the three references received for Core were not. Ms.

White described them as the most "strongly negative" references

she had ever received. In particular, the references indicated

difficulty in completing jobs within budget and on time, which

the Respondent viewed as the basis for determining whether a

contractor had successfully completed a project. Two of the

references indicated that they would not use the contractor

again, or as one put it, "not if there was any way around it."

13. Based on the recommendations received, the Purchasing

Office for the University recommended that Core Construction be

disqualified for failing to demonstrate successful completion of

three projects over one million dollars that were similar in

scope. Because Pooley Construction was also disqualified, the

Purchasing Department recommended that the Project be awarded to

the third-lowest bidder, Rivers & Rivers.

14. The recommendation to award the project to Rivers &

Rivers was accepted by the Vice President of Administration and

Finance, and on February 18, 2009, a Notice of Award issued

identifying Rivers & Rivers as the company receiving the award.

15. On February 19, 2009, Core Construction notified

Respondent that it intended to protest the award of the Project

to Rivers & Rivers. On February 24, 2009, Core Construction

provided a $10,000.00 surety bond and a written protest of the

award.

16. The basis of the protest was two-fold. First, Core

Construction contended that Rivers & Rivers did not meet the

qualification criteria set out in the ITB, because it was did not

have a minimum of five years of general contractor experience

under the current company name. Second, Core felt that the poor

references received should not be a basis for disqualification.

17. Upon receiving the bid protest, Respondent contacted

Rivers & Rivers to verify its licensure status. Upon inquiry, it

was determined that while the principals of the company had over

30 years of experience, the Rivers & Rivers entity had not been

licensed under that name for the requisite five years.

18. While no action has been taken while this bid protest

is pending, Respondent indicated its intention to withdraw the

award from Rivers & Rivers and award the contract instead to the

next lowest bidder.

19. The procedures used by the University in determining

the appropriate award were not contrary to law, against the

University's governing statutes, rules or policies or the

specifications of the invitation to bid.

20. It was consistent with University policy to check

references for projects of similar scope and size. Therefore, it

was appropriate to ask for and check references for projects of

over one million dollars.

21. There is no indication that any bidder questioned what

the University would consider as successful completion of a

project. The time for questioning this issue would have been

when the specifications were issued, consistent with Article I,

Section 7 of the ITB. Having a project come in on time and

within budget is a reasonable measure of successful completion.

It is not the same as "substantial completion," which generally

refers to a point of time in the construction process, not the

final completion of the project.

CONCLUSIONS OF LAW

22. The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties to this

action in accordance with Florida Board of Governors Regulation

18.002. This hearing has been conducted in accordance with the

requirements of Board of Governor's Regulation 18.002 and the

University's Regulation 13.0020R.

23. Core Construction has standing to bring this bid

protest inasmuch as it was the apparent low bidder for the

project.

24. As the Petitioner in this proceeding, it is Core

Construction's obligation to demonstrate that the award of the

contract to the successful bidder is contrary to law, against the

University's governing statutes, rules or policies or the

specifications of the invitation to bid.

25. Core Construction was successful in proving that Rivers

& Rivers should be disqualified because of its failure to meet

the qualification criteria in terms of years of experience.

The University acknowledged this problem and indicated its intent

to vacate the award to Rivers & Rivers on this basis.

26. The elimination of Rivers & Rivers, however, does not

result in an award to Core Construction. Consistent with

University procedures and the terms of the ITB, the Purchasing

Department asked for references with respect to jobs completed in

the last three years that were over one million dollars in size.

Consistent with University procedures and the terms of the ITB,

Purchasing Staff asked a set of questions designed to determine

whether bidders met the specified criteria regarding completion

of similar projects within the last three years. Completion of

reference checks from the persons identified by Petitioner in its

response to the ITB led to the reasonable conclusion that

Petitioner did not meet this criteria.

27. Petitioner maintains that it had very good references

from other projects completed during the three year period.

However, these projects were smaller in scope and did not meet

the criteria for references specified in the ITB. To consider

these references, when no other bidder was given the opportunity

to supplement its bid, would serve to give to Core Construction

an unfair advantage.

28. The decision to eliminate Core Construction from

consideration is not contrary to law, against the University's

governing statutes, rules or policies or the specifications of

the invitation to bid.

RECOMMENDATION

Upon consideration of the facts found and conclusions of law

reached, it is

RECOMMENDED:

That the President of the University of North Florida,

pursuant to his authority under Board of Governor's Regulation

18.002, enter a final order dismissing Petitioner's written

protest.

DONE AND ENTERED this 30th day of April, 2009, in

Tallahassee, Leon County, Florida.

S

LISA SHEARER NELSON

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone] Fax Filing 921-6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 30th day of April, 2009.

COPIES FURNISHED:

Jay H. Chung

Core Construction Company, Inc.

4940 Emerson Street, Suite 205

Jacksonville, Florida 32207

Paul Christopher Wrenn, Esquire

University of North Florida

J.J. Daniel Hall, Suite 2100

1 University of North Florida Drive

Jacksonville, Florida 32224

John A. Delaney, President

University of North Florida

J.J. Daniel Hall, Suite 2800

1 University of North Florida Drive

Jacksonville, Florida 32224

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

Pursuant to the procedure specified in Board of Governor's Rule

18.002, upon submission of this Recommended Order to the President

of the University of North Florida, the President will issue a

preliminary order for final action and notify the parties of such

order. The preliminary order of the president shall be final,

unless the firm under consideration takes exception to such order;

in which event it may file with the President such exceptions within

twenty-one days of receipt of notice of the preliminary order.