09-004996BID Close Construction, Inc. vs. South Florida Water Management District Status: Closed Recommended Order on Tuesday, January 5, 2010.

Summary: Petitioner showed that failure to itemize optional cost allowance, by using outdated bid forms, was a "non-judgmental" mistake, did not affect price or give it competitive advantage re: other bidders. Its lowest bid was responsive, and should be accepted.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CLOSE CONSTRUCTION, INC., )

)

Petitioner, )

)

vs. ) Case No. 09-4996BID

)

SOUTH FLORIDA WATER MANAGEMENT )

DISTRICT, )

)

Respondent, )

)

and )

)

WORTH CONTRACTING, INC., )

)

Intervenor. )

)

RECOMMENDED ORDER

Pursuant to appropriate notice, this proceeding came on for

formal hearing before P. Michael Ruff, duly-designated

Administrative Law Judge of the Division of Administrative

Hearings, on October 19, 2009. The hearing was conducted by

video conference between Tallahassee, Florida, and West Palm

Beach, Florida. The parties were located in West Palm Beach and

the judge was located in Tallahassee. The appearances were as

follows:

APPEARANCES

For Petitioner: Andrew J. Baumann, Esquire

Lewis, Longman and Walker, P.A.

1700 Palm Beach Lakes Boulevard,

Suite 1000

West Palm Beach, Florida 33401-2006

For Respondent: Josef M. Fiala, Esquire

South Florida Water Management District

3301 Gun Club Road, MSC 1410

West Palm Beach, Florida 33406

For Intervenor: Robert L. Frye, Esquire

Vezina, Lawrence & Piscitelli

The Museum Building

300 Southwest First Avenue, Suite 150

Fort Lauderdale, Florida 33301

STATEMENT OF THE ISSUES

The issues to be resolved in this proceeding concern

whether the Petitioner, Close Construction, Inc. (Petitioner),

(Close) was the lowest responsive and responsible bidder in the

Request For Bid (RFB) Number 6000000262, whether the subject

contract should be awarded to the Petitioner, and,

concomitantly, whether the Respondent agency's decision to award

the contract to the Intervener, Worth Contracting, Inc. (Worth)

was clearly erroneous, contrary to competition, arbitrary or

capricious.

PRELIMINARY STATEMENT

This dispute arose when the South Florida Water Management

District (Respondent or District) issued an RFB designed to

procure refurbishment and automation of district-owned and

operated water control structures G-123 and S-34. After the RFB

was issued on June 5, 2009, the District issued two addenda to

the RFB. On June 30, 2009, Addendum No. Two, which was the

subject of this dispute, was issued. It would require that each

bidder add a $40,000 discretionary owner-directed allowance, for

Florida Power and Light utility work, to the base bid. Addendum

No. Two also included a revised Bid form that included an

itemization of this $40,000 owner-discretionary allowance as an

expressly identified itemization. The new Bid form was attached

to Addendum No. Two and the Addendum was supplied to the

bidders, including the Petitioner and Intervenor, by electronic

posting on the above date.

Six bids were received in response to the RFB, including

bids from Close, from Cone and Graham, Inc., Worth Contracting

Inc., Inter-County Engineering, Inc., Murray Logan Construction,

Inc. and Harry Pepper and Associates. The bids were opened on

July 10, 2009.

Cone and Graham, Inc., was the lowest bidder; however, it

withdrew its bid from consideration. The next lowest bidder was

Close. The District, however, determined Close to be non-

responsive for purportedly failing to comply with the

requirements of Addendum No. Two. Specifically, Close did not

replace the original Bid form with the revised Bid Form

expressly identifying, as a separate itemization, the additional

$40,000 owner-directed allowance for the Florida Power and Light

(FPL) utility work, as required by Addendum Two. Worth was

deemed to be in compliance with Addendum Two, and otherwise

compliant with the RFB. It was deemed responsible and

responsive and awarded the bid by the District. The posting of

the intent to award was on August 14, 2009.

Close filed a timely protest of the intended award and the

matter was then referred to the Division of Administrative

Hearings on September 14, 2009. The undersigned Administrative

Law Judge was assigned to conduct the formal proceeding and upon

conferring with the parties, the matter was set for hearing for

October 19, 2009, by video conference between Tallahassee and

West Palm Beach. In the meantime, on October 1, 2009, the

Notice to Bidders was filed and served by the Respondent

District, which resulted in the intervention of Worth in this

proceeding.

The cause came on for final hearing as noticed. Close, the

Petitioner, presented the testimony of Danny Boromei, the Vice-

President for Civil Construction of the Petitioner Close,

Christopher Rossi, Close's estimator, and Gerard Flynn, the

Construction Manager for the South Florida Water Management

District.

The District presented the testimony of James Reynolds, the

Senior Contract Specialist, and Donna Lavery, the Contracts

Manager. The parties submitted Joint Exhibits 1 through 7 which

were admitted into evidence. Official recognition was taken of

Chapter 120, Florida Statutes, and of relevant portions of the

Florida Administrative Code.

The Petitioner contends that the intended award of the

contract to Worth is erroneous based upon its position that the

irregularity in the Petitioner's bid, involving mistakenly using

the original Bid Form, was a non-material irregularity which

conferred no competitive advantage upon the Petitioner. Close

maintains that the District should have verified any question it

had regarding Close's bid, based upon the requirements of the

District's procurement and contracting policies and policy

manual, and under the express terms of the RFB. The Petitioner

thus contends that the irregularity as to its bid should have

been waived, that the bid should have been verified by the

Respondent District in accordance with its policies on

verification of bids, and that the Petitioner should have

received the award for its bid of $3,751,795.00, which is

$146,615.00 lower than the awardee, Worth.

Upon conclusion of the hearing the parties ordered a

transcription thereof and took the opportunity to submit

Proposed Recommended Orders. The transcript of the proceeding

was filed on November 6, 2009, and Proposed Recommended Orders

were thereafter filed by agreement of the parties on

November 16, 2009. The Proposed Recommended Orders have been

considered in the rendition of this Recommended Order.

FINDINGS OF FACT

1. The South Florida Water Management District is a public

corporation authorized under Chapter 373, Florida Statutes. It

issued a request for bids for the refurbishment and automation

of certain facilities in Broward County, Florida. Close is a

construction company duly authorized to do business in the state

of Florida. It was one of the bidders on the procurement

represented by the subject request for bids and is the

Petitioner in this case.

2. This dispute had its beginnings on June 5, 2009, when

the Respondent issued RFB number 6000000262. The RFB solicited

construction services for the refurbishment and automation of

two facilities in Broward County. The procurement would involve

the installation of new direct-drive electric pumps at the

Respondent's G-123 Pump Station in Broward County, along with

the construction of an equipment shelter and the replacement of

a retaining wall with a poured concrete retaining wall, as well

as refurbishment of "pump flap gates." The RFB also requested

construction services for the replacement of gates at the

Respondent's S-34 water-control structure in Broward County.

Both facilities would thus be automated so that they can be

remotely operated from the Respondent's headquarters in West

Palm Beach.

3. After issuance of the RFB, two addenda were supplied to

vendors and were posted. The first addendum was posted on or

about June 19, 2009, concerning a change in specifications for

flap gates and is not the subject of this dispute. Addendum

No. Two was electronically posted on or about June 30, 2009. It

amended the technical specifications of the RFB by deleting

Section 11212 regarding measurement of payment of electric

motors/belt-driven axial flow pumps. That addendum also added a

new measure and payment to Subpart 1.01 of the technical

specifications to provide for an owner-directed allowance of

$40,000.00 to provide for the potential need for certain

electrical utility work to be done by FPL in order to complete

the project.

4. Addendum No. Two added an additional term to the RFB in

providing that the $40,000.00 allowance price "Shall be added to

the other costs to complete the bid." The second Addendum also

stated, "The allowance price shall be used at the discretion of

the District and, if not used, will be deducted from the final

Contract Price." That addendum also directed bidders to replace

the original Bid Form 00320-2, which had been enclosed with the

RFB, with a new Bid Form, 00320R1-2. The new Bid Form is

identical to the original form except that the schedule of bid

prices contained in paragraph four, on page 003201-2, was

altered to itemize the $40,000.00 discretionary cost allowance.

The original form had contained a single line for the bidder's

lump sum bid price, whereas the revised form provided for a lump

sum bid amount to be itemized and a base bid amount, which

required the bidder to enter on the form the amount of its bid,

then add the discretionary cost amount and write the sum of

those two numbers on a third line.

5. In paragraph four of the new bid form there is re-

printed language concerning the use of the discretionary

allowance which appeared on the face of Addendum No. Two. Other

than the change to paragraph four and the alteration of the page

numbers to include an "R" in the page number, the revised bid

form is identical to the original bid form. The other bid

documents were not altered in any manner by Addendum No. Two.

6. The deadline for bid submissions was Thursday, July 9,

2009, at 2:30 p.m. The Petitioner timely submitted its bid to

the District. In submitting its bid however, the Petitioner

used the original bid form which had been enclosed with the RFB.

The bid form submitted was an exact copy of the bid form

furnished by the District which Close had printed from the

electronic copy of the RFB received from the District. The

Petitioner did not substitute the revised bid form, attached to

Addendum No. Two, for the original form in submitting its bid.

The Petitioner's bid was deemed non-responsive by the District

and was rejected on the basis that Close had failed to submit

the bid on the revised form required by Addendum No. Two.

7. Thereafter, the District, at its August 13, 2009,

meeting, approved award of the bid to Worth. The intent to

award was posted electronically on or about August 14, 2009.

8. The persuasive evidence establishes that Close received

both addenda to the bid documents. It was aware of the Addendum

No. Two, and it accounted for all of the changes to the

technical specifications made in both addenda in the preparation

of its bid.

9. The evidence shows that Close was aware of the

$40,000.00, owner-directed cost allowance and that it

incorporated it in the formulation of its total bid price.

Thus, Close's final bid amount was $3,751,795.00. That number

included the $40,000.00 cost allowance at issue, added to the

bid documents by Addendum No. Two.

10. The internal bid work sheets, prepared by personnel of

Close, identified and itemized the $40,000.00 discretionary cost

allowance as a component of the final bid price. The persuasive

evidence thus establishes that Close's final bid amount did

include the $40,000.00 cost allowance.

11. Moreover, the written notes of witness Christopher

Rossi, the estimator for Close, show the $40,000.00 amount as an

"FPL Allowance." Both Mr. Rossi and Mr. Boromei, the Vice

President for Close, who prepared the bid, explained that the

$40,000.00 was understood by Close to be a cost allowance, that

it would only be charged to the District to the extent that it

was actually used, at the District's discretion. If it were not

used, it was to be deducted from the overall contract price.

Addendum Two specifically provides that the discretionary cost

allowance was to be used only at the discretion of the District

and that the unused portion would be deducted from the contract

amount.

12. When Close submitted its bid it mistakenly submitted

it on the original bid form and failed to exchange the bid forms

as directed in Item Two of Addendum No. 2.

13. In paragraph one of both bid forms, however, the

bidder is required to specifically fill out, acknowledge and

identify all addenda. By doing so the bidder expressly agrees

to build the project in conformance with all contract documents,

including all addenda, for the price quoted in the bid. Close

completed this paragraph, specifically identified both Addendum

One and Addendum Two, and specifically agreed to strictly

conform, in performance of the work to the plans, specifications

and other contract documents, including Addendum Nos. One and

Two. Paragraph one was not changed by the addition of Addendum

No. Two and it is identical in both the original and the revised

forms at issue. Paragraph one of the original and the revised

bid forms constitutes an agreement by the bidder to perform and

construct a project "in strict conformity with the plans,

specifications and other Contract Documents. . . ." The addenda

are part of the contract documents and are expressly referenced

as such in this agreement. Both bid forms, the original and the

revised, include paragraph eight, which clearly states that the

bidder will post a bid bond to secure and guaranty that it will

enter into a contract with the District, if its bid is selected.

Paragraph eight was unchanged by Addendum No. Two and its terms

are identical in both Bid forms at issue, including the form

that Close signed and submitted as its bid.

14. The persuasive evidence shows that in submitting its

bid, whether on either form, Close committed itself to the

identical terms as set forth in the identical contract documents

agreed to by Worth and the other bidders. The evidence

established that Close intended to bind itself to the terms of

the RFB, and all terms of Addendum No. Two, including the

discretionary cost allowance term. Close considered itself

bound to enter into a contract for the price of its bid if

selected by the District. It likewise considered that the price

of its bid, would only include the cost allowance if the

discretionary allowance was implemented by the District.

15. Upon the opening of the bids, the firm of Cone and

Graham, Inc., was identified as the lowest bidder. Cone and

Graham's bid was in the amount of $2,690,000.00. Close was the

second lowest bidder, with a bid of $3,751,795.00. The third

lowest bidder was Worth Contracting, Inc., with a bid of

$3,898,410.00. Cone and Graham was allowed to provide

additional information and to even meet with some District staff

following the opening of its bid. The additional information it

was allowed to provide concerned technical specifications of the

pumps proposed in its bid. Through this verification process

conducted with the Agency, Cone and Graham ultimately convinced

the District to permit them to withdraw its bid without

forfeiting their bid bond. This left the Petitioner, Close, the

lowest bidder, at $146,615.00 less than the bid submitted by

Worth, the initially-awarded bidder.

16. Close's bid, upon review, was rejected as non-

responsive due to its failure to exchange the original Bid form

with the revised Bid form, as indicated above, in spite of the

fact that Close had also agreed to adhere to the entirety of

Addendum No. Two on the face of the Bid form. Thus the

recommended award to Worth for the above-referenced additional

amount of bid price was adopted by the District, engendering

this protest.

17. James Reynolds, the Contracts Specialist for the

District, conceded that it was apparent on the face of Close's

bid that a mistake had been made in the use of the original

form, rather than the revised form. He conceded there was an

inconsistency between Close's clear acknowledgement of and

agreement to the terms of the contract documents, which

expressly included Addendum No. Two and Close's apparent

mistaken use of the original Bid form.

18. Under the express terms of Article 19.03 of the RFB,

"The Bid shall be construed as though the addendum(a) have been

received and acknowledged by the bidder." Mr. Reynolds

admitted, however, that he did not apply the terms of Article

19.03 of the RFB in his review of Close's bid and did not

construe the bid in the manner provided in the RFB to resolve

the apparent inconsistency. He reasoned that Close had used the

wrong bid form and looked no further.

19. The District's Procurement Manual provides a procedure

whereby a bidder may correct inadvertent mistakes in its bid.

Under the terms of Chapter 5-5 of that manual, where the

District knows or has reason to conclude, after unsealing of

bids, that a mistake may have been made by a bidder, the

District "shall request written verification of the bid." In

such a circumstance the bidder "shall be permitted the

opportunity to furnish information in support of the bid

verification as long as it does not affect responsiveness, i.e.,

the bid substantially conforms to the requirements of the RFB as

it relates to pricing, surety, insurance, specifications and any

other matter unequivocally stated in the RFB as determinant of

responsiveness." See Joint Exhibit 7,6 pages 61 and 62, in

evidence.

20. Mr. Reynolds admitted in his testimony that he did not

follow the procedure set forth in the manual for verifying a bid

because, in his view, that would be allowing an impermissible

supplementation of Close's bid. Ms. Lavery, in her testimony,

in essence agreed.

21. The Procurement Manual expressly required the

District, upon recognizing the mistake and an inconsistency

apparent on the face of Close's bid, to verify that bid and to

provide Close with the opportunity to furnish information in

support of bid verification. Thus, by the express terms of the

manual, a bidder must be given an opportunity to clarify

mistakes. The Procurement Manual expressly permits a bidder

under these circumstances to correct any "inadvertent, non-

judgmental mistake" in its bid. Chapter 5 of the Manual

provides that "a non-judgmental mistake" is a mistake not

attributable to an error in judgment, such as mistakes in

personal judgment or wrongful assumptions of contract

obligations. Inadvertent technical errors, such as errors of

form rather than substance, are considered non-judgmental

errors." See Joint Exhibit 7, page 62, in evidence.

22. It is patently apparent that Close's use of the

original bid form, inadvertently, while also unequivocally

acknowledging and agreeing to the entirety of Addendum No. Two,

represented a non-judgmental mistake. Both of the District

witnesses, however, testified that the policy regarding mistakes

was not followed and Close was not given an opportunity under

the District's policy to provide additional information to

support verification of the bid.

23. Although Close failed to substitute the revised Bid

form for the original Bid form, as called for by Addendum No.

Two, its bid was substantively responsive to the technical

specifications and requirements of the RFB, and the irregularity

is technical in nature. The parties stipulated that the use of

the original form, rather than the revised bid form, was the

sole basis for Close being determined to be non-responsive by

the Agency.

24. In accordance with Florida Administrative Code Rule

40E-7.301, in Chapter 5 of the District's Procurement Manual,

the District reserves the right to waive minor irregularities in

a bid. A material irregularity is defined by the District's

policy as one which is not minor in that it: (a) affects the

price, quality, time or manner of performance of the service

such that it would deprive the District of an assurance that the

contract will be entered into, performed and guaranteed

according to the specified requirements; (b) provides an

advantage or benefit to a bidder which is not enjoyed by other

bidders; or (c) undermines the necessary common standards of

competition. See Joint Exhibit 7, page 58, in evidence.

25. The preponderant, persuasive evidence shows that the

irregularity in Close's bid did not affect the price of the bid

or truly deprive the District of assurance that the contract

would be entered into and performed according to all the terms

of the RFB, including addenda. The evidence established that

Close actually included the $40,000.00 discretionary cost

allowance in its final bid price. It merely did not show it as

a separate itemization, because it did not use the revised form

providing that itemization line. The fact that the

discretionary allowance was itemized in the revised bid form, as

part of the bid amount, does not equate to an effect on the

contract price as a result of Close's using the original Bid

form. Close's error, by mistakenly submitting its bid on the

original bid form, did not alter the price of its bid. The

evidence clearly established that the bid price for Close's bid

would be the same regardless of which form it used.

26. Moreover, the preponderant, persuasive evidence

establishes that the use of the original Bid form by Close did

not deprive the District of assurance that the contract would be

performed in accordance with the all bid documents. Close's

bid, secured by its bid bond, clearly acknowledged and agreed to

the express terms of Addendum No. Two in their entirety, which

included the terms under which the discretionary cost allowance

could be applied. Close considered itself bound to the terms of

the RFB and assured the Agency that it was so bound by the

written acknowledgement and agreement it submitted to the Agency

as part of its bid, concerning the elements of Addendum No. Two.

The evidence demonstrated that Close understood that the

$40,000.00 amount was a discretionary cost allowance and that

Close would not be entitled to it unless the District decided to

use it.

27. Despite the opinion of Agency witnesses to the

contrary, the error in Close's bid was a technical one and non-

material because it did not confer a competitive advantage upon

Close. Close's use of the wrong form did not alter the price of

its bid. Its mistake in the use of the original bid form could

only change the relative, competitive positions of Close and

Worth if the amount of the discretionary cost allowance was

greater or equal to the difference between those two bids, i.e.,

the $146,650.00 amount by which Worth's bid exceeded the bid of

Close. 1 / The bid of Worth exceeds Close's bid by an amount far

greater than the amount at issue in the discretionary cost

allowance identified in Addendum No. Two and expressly itemized

in the revised Bid form, i.e. $40,000.00.

28. The District contends that Close gained some

competitive economic advantage over other bidders by having the

means by which it could optionally withdraw its bid, based upon

alleged non-responsiveness, in not substituting the revised Bid

form which would contain the itemization of the $40,000.00 cost

allowance. It is difficult to see how it could gain a

competitive advantage versus other bidders through some

perceived ability to deem itself non-responsive, at its option,

and withdraw its bid, thus denying itself the contract. The

competitive bidding laws are designed to prevent a firm from

gaining a competitive advantage in obtaining a contract versus

the efforts of other bidders, not in depriving itself of the

opportunity to get the work. Moreover, concerning the argument

by the District that this may confer the advantage to Close of

allowing it to withdraw its bid at its option and still obtain a

refund of its bid bond; even if that occurred, it would not

confer a competitive advantage vis-à-vis other bidders. It

would merely involve a potential pecuniary advantage to Close's

interest, versus that of the Agency itself, which obviously is

not a bidder. Moreover, it should again be pointed out that

Cone and Graham was allowed to provide additional information

concerning its bid elements, and even to meet with the District

staff, following the opening of the bids. It was then allowed

to withdraw its bid without forfeiting its bid bond.

29. If the District had inquired, by way of verification

of Close's bid, as to whether the discretionary cost amount was

included in it's bid, that inquiry does not equate to allowing

Close to unlawfully supplement its bid. Indeed, if in response

to such an inquiry, Close announced that the discretionary

allowance was not included in its bid, its bid at that point

would be materially non-responsive to the specifications. If

Close was then allowed to supplement its bid by changing its

price to add the allowance, such would indeed be an unfair

competitive advantage and a violation of law on the part of

Close and the Agency. The evidence does not show that such

happened or was proposed by any party.

30. If a verification inquiry had been made and Close

announced that, indeed, its bid price did include the subject

discretionary cost allowance, without further response to the

specifications being added, then no competitive advantage would

be afforded Close and no legal violation would occur. In fact,

however, as pointed out above, the verification request,

pursuant to the District's policy manual, was never made. This

was despite the fact that the District's witness, Mr. Reynolds,

acknowledged that the use of the original bid form was an

apparent mistake on the face of the bid, when considered in

conjunction with Close's express agreement to construct the

project in strict conformance with all contract documents, and

particularly with regard to Addenda Numbers One and Two.

31. The non-judgmental mistake, involving use of the

original bid form in lieu of the revised bid form, could have

been easily clarified by a verification inquiry. That policy

was not followed, based solely on the fact that the wrong bid

form was used, even though the preponderant, persuasive evidence

shows that in all material and substantive respects the bid was

a conforming, responsive bid and included in its price the

discretionary cost allowance. The preponderance of the evidence

shows that the mistaken use of the original Bid form was a non-

material irregularity under the District's policies and the

terms of the RFB.

32. The District's actions in failing to uniformly apply

its own bid verification policy when, in fact, it had allowed

verification to one of the other bidders, and when, according to

its own witness, it perceived an apparent mistake, was clearly

erroneous. It is true that Close may not supplement its bid by

changing material terms, but it is permitted to verify whether,

in light of the mistaken use of the original Bid form, its bid

price, as submitted, included the $40,000.00 discretionary

allowance or not. Providing such "yes or no" type of additional

information in order to clarify, and only clarify, information

already submitted in the bid, in response to an inquiry by the

District does not constitute "supplementation" of the bid for

purposes of Section 120.57(3)(f), Florida Statutes (2008). NCS

Pearson, Inc. v. Dept of Education , 2005 WL 31776, at page 18

(DOAH, Feb. 8, 2005).

33. Even without verification of the bid, the bid on its

face agrees to compliance with all terms and specifications,

including Addendum No. Two. It is thus determined that there is

no material irregularity. The bid submitted by Close does not

afford it any competitive advantage vis-à-vis the other bidders

and it is responsive.

CONCLUSIONS OF LAW

34. The Division of Administrative Hearings has

jurisdiction of the subject matter of and the parties to this

proceeding. §§ 120.569 and 120.57(1) and (3), Fla. Stat.

(2009).

35. Section 120.57(3)(f), Florida Statutes, provides in

pertinent part as follows:

. . . Unless otherwise provided by statute,

the burden of proof shall rest with the

party protesting the proposed agency action.

In a competitive-procurement protest, other

than a rejection of all bids, proposals, or

replies, the Administrative Law Judge shall

conduct a de novo proceeding to determine

whether the agency 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 proceeding shall be

whether the proposed agency action was

clearly erroneous, contrary to competition,

arbitrary, or capricious. . .

36. The Petitioner must therefore demonstrate that the

agency's proposed action is contrary to governing statutes, the

agency's rules or policies or the bid or proposal

specifications. It must demonstrate that action by preponderant

evidence. Dept. of Transportation v. J.W.C. Company, Inc. , 396

So. 2d 778, 787 (Fla. 1st DCA 1981); State Contracting and

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

609 (Fla. 1998). Stated differently, in a de novo proceeding

such as this, pursuant to the above-referenced statutory

authority, it must be demonstrated by the Petitioner whether the

agency erred in applying a governing principle of law, by virtue

of its interpretation or application of its bid specifications

or interpretation of the bidder's response thereto.

37. Whether an act is contrary to competition is

determined by considering whether it offends the purpose of the

competitive bidding statutes. "The purpose of the competitive

bidding process is to secure fair competition on equal terms to

all bidders by affording an opportunity for an exact comparison

of bids." Harry Pepper and Associates, Inc. v. City of Cape

Coral , 352 So. 2d 1190 (Fla. 2d DCA 1977).

38. Although Close mistakenly used the original Bid form

rather than the revised form, the preponderant, persuasive

evidence establishes that the deviation was a non-material one

and could have been easily remedied by the District by use of

its established bid-verification process. Even without the bid

verification policy being employed by the District, in the

"free-form" stage of this proceeding, the bid document submitted

by Close itself showed that it had unequivocally agreed to

comply with all specifications and requirements of the RFB and

contract documents, including, particularly, Addendum No. Two.

The assurance actually provided to the Agency by Close's bid

response demonstrates that Close would be bound by its contract

price, whether or not the relevant $40,000.00 discretionary cost

allowance was separately itemized. Under well-established

contract principles, the Agency would have been able to protect

itself against being charged such an amount, or portion thereof,

over and above the proposed contract price submitted by Close.

39. The case of Intercontinental Properties v. DHRS , 606

So. 2d 380 (Fla. 3d DCA 1992), stands for the proposition that

the disqualification of a low bidder for non-responsiveness,

where the bid irregularity does not impart an unfair competitive

advantage to that bidder, is not favored by the courts. In that

case, the court reversed an Administrative Law Judge's finding

of unresponsiveness on the part of a low bidder, and the court

discussed at length the well-known case of Liberty County v.

Baxter's Asphalt and Concrete, Inc. , 421 So. 2d 505 (Fla. 1982).

The Intercontinental opinion contains an apt discussion of that

Supreme Court decision regarding bid irregularities and

principles of competitive bidding:

A minor irregularity is a variation from the

bid invitation or proposal terms and

conditions which does not affect the price

of the bid, or give the bidder an advantage

or benefit not enjoyed by other bidders, or

does not adversely impact the interest of

the [agency] . . . [quoting from F.A.C. Rule

10-13.012]. . .

There is a very strong public interest in

favor of saving tax dollars in awarding

public contracts. There is no public

interest, much less a substantial public

interest, in disqualifying low bidders for

technical deficiencies in form, where the

low bidder did not derive any unfair

competitive advantage by reason of the

technical omission . . .

In either event, there is a strong public

policy in favor of awarding contracts to the

low bidder, and an equal strong public

policy against disqualifying the low bidder

for technical deficiencies which do not

confer an economic advantage on one bidder

over another.

Id. at 387 (emphasis added).

40. In the instant situation, Close is the low bidder by a

substantial amount of $146,615.00. The preponderant, persuasive

evidence establishes that Close received and reviewed Addendum

No. Two and incorporated the technical requirements of that

addendum, including the $40,000.00 discretionary cost allowance,

into the development and submission of its bid. Close included

that discretionary cost amount in the bid.

41. Close specifically agreed to the terms of Addenda

Nos. One and Two, but during the final hearing, Mr. Reynolds,

testifying for the District, indicated that he viewed Close's

agreement in paragraph one of its bid to be void, because an

obsolete form was used. He acknowledged, however, that Cone and

Graham, on the other hand, had submitted its bid using a portion

of the revised form, but had actually signed the page from the

original form, as did Close. Despite actually signing a portion

of what Mr. Reynolds had described as an obsolete form, he

nevertheless found that Cone and Graham's bid documents were

responsive in his bid checklist. His position that Close's bid

was unresponsive is thus intellectually inconsistent.

42. Close's bid mistake was a technical error that did not

confer any competitive advantage to Close or undermine the

common standards of competition. The irregularity did not alter

the price of Close's bid and, in any event, the amount of the

cost allowance (whether or not it was included in Close's bid

price, which it was) was far less than the difference between

Close's bid and Worth's bid. Therefore, even if, assuming

arguendo , Close's bid did not include the $40,000.00 allowance

and, theoretically, it had to be added to Close's bid price,

Close's resulting bid price would still be $106,615.00 less than

Worth's bid, a not insignificant amount. Only if the amount of

the discretionary cost allowance was greater, or at least

approximately equal to the $146,615.00 difference between

Close's bid and Worth's bid, could Close's mistaken use of the

original Bid form possibly alter the competitive positions of

the two bidders, or any of the bidders in the procurement for

that matter. See , e.g. , Warren Building Company, Inc. v. Dept.

of Military Affairs , at page 8-9 Case No. 08-2369BID (DOAH,

Aug. 20, 2008). The relative competitive positions of the

bidders are simply too far apart to have been altered by the

cost allowance factor.

43. The irregularity in Close's bid did not give it the

ability to "look back" to the comparative bids of the other

bidders and somehow then alter its bid to its advantage. The

notion that Close's mistake conferred upon it the right to

supplement its bid and "add" $40,000.00 to its price after the

bids are unsealed is entirely unsupported by any persuasive

evidence. According to un-refuted evidence, the bid included

the allowance. The only inquiry that would need to be made of

Close would be whether it could confirm or deny whether the

allowance was included, upon a proper verification request by

the District. No party to this matter, including Close, has

ever suggested that it should be permitted to alter its bid

price through the Agency verification process.

44. In like vein, Close could gain no competitive,

economic advantage by having the ability to withdraw its bid

without penalty, through use of the obsolete form in its bid

submission, as the Respondent District suggests. It is

difficult to fathom how Close could gain any competitive

advantage over another bidder by acting to withdraw its bid and

thus deny itself the work represented by the ultimate contract

in this procurement. The public bidding laws are designed to

prevent a firm from gaining a competitive advantage over other

vendors or bidders in seeking to obtain the subject work, not in

depriving itself of the work. Moreover, this purported fear by

the Agency does not appear significant in the face of the fact

that it allowed another bidder this purported advantage of

withdrawing its bid without penalty.

45. Close's use of the original bid form was clearly a

non-judgmental mistake, as identified and defined in the

Agency's Procurement Manual. The mistake was apparent on the

face of the bid, which not only expressly identified and agreed

to the terms of both addenda, but which must be construed by the

District as if all addenda are received and acknowledged by the

bidder, in submitting its bid.

46. The District did not follow the clear terms of Article

19.03 of the RFB in construing the bid. This is especially the

case in light of the express agreement to comply with Addendum

No. Two contained in Close's submittal. The District did not

follow its own policies contained in Chapter 5 of its

Procurement Manual and exercise the opportunity to verify

Close's bid as to the obvious mistake, and afford an opportunity

to correct that non-judgmental mistake. That mistake and the

simple verification question of whether the bid price included

the discretionary cost allowance, would not have affected the

price of Close's bid nor Close's relative competitive position

vis-à-vis any other bidders, by conferring it any competitive

advantage. A simple yes or no question and answer procedure

would have sufficed.

47. Contrary to the testimony of the District's witnesses,

the Procurement Manual expressly permits a bidder to furnish

additional information to support verification of its bid in the

face of a mistake. As stated above, another bidder was indeed

given this opportunity. Under that policy, the bidder is not

allowed to alter or supplement its bid and there was no effort

or intent to do so. If the simple opportunity to clarify the

mistake and verify the bid had been taken, this proceeding might

have been unnecessary.

48. In summary, after conduct of this de novo proceeding,

the preponderant, persuasive evidence shows that, if the

District's position and action persisted through final order, it

would be clearly erroneous by its failure to apply the

interpretive presumptions in Article 19.03 of the RFB and in

failing to apply the bid verification process as delineated

above. That would also be the case if it made a legal

determination that, although the Petitioner agreed to all terms

of all bid documents, including Addendum No. Two, that as to the

cost allowance matter and the use of the original bid form, the

bid was non-responsive. By allowing Cone and Graham to submit

additional information after the bids were opened, in its

verification process, and ultimately allowing it to withdraw its

bid without sacrificing its bid bond, while denying such an

opportunity to Close, under the above-found circumstances, the

District would be acting arbitrarily. It would also be acting

in a manner "contrary to competition" by allowing such a

technical mistake, which did not affect the price of Close's

bid, to result in denying the work to a bidder which was a

substantial amount cheaper, by $146,615.00, than the price

proposed by the bidder initially chosen by the Agency.

49. Thus Close has established by preponderant, persuasive

evidence that the District's proposed award to Worth would be

clearly erroneous, contrary to competition, and arbitrary, as

those terms are defined herein and in the decisional law cited

by the parties. The bid submitted by Close was thus responsive,

responsible, and was the lowest bid of the remaining bidders.

RECOMMENDATION

Having considered the foregoing Findings of Fact,

conclusions of law, the evidence of record, the candor and

demeanor of the witnesses, and the pleadings and arguments of

the parties, it is, therefore,

RECOMMENDED that a Final Order be entered by the South

Florida Water Management District, awarding the subject contract

for RFB 6000000262 to the Petitioner herein, Close Construction,

Inc.

DONE AND ENTERED this 5th day of January, 2010, in

Tallahassee, Leon County, Florida.

S

P. MICHAEL RUFF

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 5th day of January, 2010.

ENDNOTE

1 / See , e.g. , Warren Building Company, Inc. v. Dept. of Military

Affairs , page 8-9, Case No. 08-2369BID (DOAH, August 20, 2008).

In that case it was determined that a low bidder's cost savings

in preparing its bid, by failing to certify that it had visited

the project site in preparing its bid, would only change the

relative competitive positions of the two lowest bidders if the

amount of any such cost savings equaled or exceeded the

difference between the two bids.

COPIES FURNISHED :

Josef M. Fiala, Esquire

South Florida Water Management District

3301 Gun Club Road, MSC 1410

West Palm Beach, Florida 33406

Andrew J. Baumann, Esquire

Lewis, Longman and Walker, P.A.

1700 Palm Beach Lakes Boulevard, Suite 1000

West Palm Beach, Florida 33401-2006

Joseph W. Lawrence, II, Esquire

Robert L. Frye, Esquire

Vezina, Lawrence & Piscitelli

The Museum Building

300 Southwest 1st Avenue, Suite 150

Fort Lauderdale, Florida 33301

Carol Ann Wehle, Executive Director

South Florida Water Management District

3301 Gun Club Road

West Palm Beach, Florida 33416-4680

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.